EXHIBIT 4.2
INCENTIVE STOCK OPTION AGREEMENT
BY THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") made and
entered into this ____ day of ____________________, 19___ (the "Grant Date"),
WAVETECH, INC., a New Jersey corporation (the "Company"), and
_______________________, a key employee of the Company (the "Optionee") hereby
state, confirm, represent, warrant and agree as follows:
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RECITALS
1.1 The Company, through its Board of Directors (the "Board"), has
determined that in order to attract and retain key personnel for positions of
substantial responsibility, to provide additional incentive to employees of the
Company and to promote the success of the Company's business, it must offer a
compensation package that provides key employees of the Company a chance to
participate financially in the success of the Company by developing an equity
interest in it.
1.2 The Company has adopted, effective as of January 31, 1997, the
1997 Stock Incentive Plan (the "Plan") pursuant to resolution of the Board of
Directors.
1.3 By this Agreement, the Company and the Optionee desire to
establish the terms upon which the Company is willing to grant to the Optionee,
and upon which the Optionee is willing to accept from the Company an option to
purchase shares of the Company's common stock $.001 par value("Common Stock").
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AGREEMENTS
2.1 Grant Of Incentive Stock Option. Subject to the terms and
conditions hereinafter set forth, the Company grants to the Optionee the right
and option (the "Option") to purchase from the Company all or any part of an
aggregate number of ____________ shares of Common Stock, authorized but unissued
or, at the option of the Company, treasury stock if available (the "Optioned
Shares"). The Option granted hereunder shall be an incentive stock option, as
defined in Section 422 of the Internal Revenue Code.
2.2 Exercise Of Option. Subject to the terms and conditions of this
Agreement, the Option may be exercised only by completing and signing a written
notice in substantially the following form:
I hereby exercise the Option granted to me pursuant to the Incentive
Stock Option Agreement dated the ____ day of _______________, 19____
(the "Agreement"), and elect to purchase ____ shares of the $.001 par
value Common Stock of Wavetech, Inc. I hereby tender $____________,
pursuant to the Agreement, in exercise of ______ Optioned Shares.
2.3 Provisions Of Incentive Stock Option Plan. The provisions of the
Plan are expressly incorporated herein and made an integral part hereof as
though set forth herein. Capitalized terms not otherwise defined herein shall
have the same meaning as ascribed to them in the Plan.
2.4 Purchase Price. The price to be paid for the Optioned Shares (the
"Purchase Price") shall be $__________ per share which was not less than the
Fair Market Value (as defined under Section 2(o) of the Plan) of the Optioned
Shares as determined by the Board or a Committee of the Board (the "Committee")
on the Grant Date, or, in the case of an option granted to an employee who, on
the Grant Date, owns ten percent (10%) or more of the Common Stock, as such
amount is calculated under Section 422A(b)(6) of the Internal Revenue Code, as
amended ("Code"), not less than one hundred and ten percent (110%) of the Fair
Market Value of the Optioned Stock.
2.5 Payment Of Purchase Price. Payment of the Purchase Price may be
made as follows:
(a) In United States dollars in cash or by check, bank draft or
money order payable to the Company; or
(b) At the discretion of the Board, through the delivery of
shares of Common Stock with an aggregate fair market value at the date
of such delivery, equal to the Purchase Price; or
(c) By a combination of both (a) and (b) above; or
(d) Pursuant to financial assistance which may be provided by the
Company upon Board approval as set forth in Section 8(c) of the Plan.
The Board or a Committee appointed by the Board shall determine acceptable
methods for tendering Common Stock as payment upon exercise of an Option and may
impose such limitations and conditions on the use of Common Stock to exercise an
Option as it deems appropriate. At the election of the Optionee pursuant to
Section 17 of the Plan, and subject to the acceptance of such election by the
Board or a Committee appointed by the Board, to satisfy the Company's
withholding obligations, it may retain such number of shares of Common Stock
subject to the exercised Option which have an aggregate Fair Market Value (as
defined in the Plan) on the date of exercise equal to the Company's aggregate
federal, state, local and foreign tax withholding and FICA and FUTA obligations
with respect to the exercise of the Option by the Optionee.
2.6 Reduction in Optioned Shares. The number of Optioned Shares to
which an Optionee is entitled shall be reduced by the number of Optioned Shares
purchased by Optionee.
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2.7 Vesting Of Option. Optionee's right to acquire the Optioned Shares
pursuant to the exercise of an Option as provided herein shall vest
_________________________________. As provided in the Plan, the Board of
Directors or the Committee, as the case may be, may waive the foregoing vesting
provisions in whole or in part at any time based on such factors as the Board or
the Committee determines in its sole discretion.
2.8 Termination Of Option. Except as otherwise provided herein, the
Option, to the extent not heretofore exercised, shall terminate upon the first
to occur of the following:
(a) The date on which the Optionee's employment by the Company is
terminated, except if such termination is voluntary or due to
retirement, death or disability within the meaning of Section 22(e)(3)
of the Code;
(b) Thirty (30) days after voluntary termination or termination
due to retirement;
(c) Three (3) months after termination due to disability within
the meaning of Section 22(e)(3) of the Code;
(d) One (1) year after the Optionee's death (or such other period
of time as determined by the Board); or
(e) As otherwise provided in the Plan.
2.9 Adjustments. In the event of any stock split, reverse stock split,
stock divided, combination or reclassification of shares of Common Stock or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, the number and kind of
Optioned Shares (including any Option outstanding after termination of
employment or death) and the Purchase Price per share shall be proportionately
and appropriately adjusted without any change in the aggregate Purchase Price to
be paid therefor upon exercise of the Option. The determination by the Board as
to the terms of any of the foregoing adjustments shall be conclusive and
binding.
2.10 Liquidation, Sale of Assets or Merger. In the event of a proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation, unless the Board determines that the
Optionee shall have the right to exercise the Option as to all of the Common
Stock subject to the Option, including shares as to which the Option would not
otherwise be exercisable. If the Board makes an Option fully exercisable, the
Board shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice (but not later than the
expiration of the Option term under Paragraph 2.7, above), and the Option will
terminate upon the expiration of such period.
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2.11 Notices. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its Chief Financial
Officer at 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000, or at
its then current corporate headquarters. Notice to be given to the Optionee
shall be addressed to him or at his then current residential address as
appearing on the payroll records.
Notice shall be deemed duly given when enclosed in a properly sealed
envelope and deposited by certified mail, return receipt requested, in a post
office or branch post office regularly maintained by the United States
Government.
2.12 Notification Of Disposition Of Shares. The Optionee hereby
acknowledges that a disposition of shares of Common Stock acquired upon the
exercise of the Option within two (2) years from the Grant Date or within one
(1) year after the transfer of such shares of Common Stock to him would result
in detrimental income tax consequences to the Optionee. The Optionee hereby
agrees to promptly notify the Company of any disposition of shares of Common
Stock within either of the above time limitations.
2.13 Modification Of Agreement. The Board or the Committee may at any
time and from time to time direct that the Agreement be modified in such
respects deemed advisable in order that the Option shall constitute an incentive
stock option pursuant to Section 422A of the Code.
2.14 Transferability of Option. The Option shall not be transferable
by the Optionee otherwise than by the will or the laws of descent and
distribution, or to the extent permitted by Code ss.422 and may be exercised
during the life of the Optionee only by the Optionee.
2.15 Optionee Not A Shareholder. The Optionee shall not be deemed for
any purposes to be a shareholder of the Company with respect to any of the
Optioned Shares except to the extent that the Option herein granted shall have
been exercised with respect thereto and a stock certificate issued therefor.
2.16 Not a Contract of Employment. Nothing contained in the Plan or in
any Option Agreement executed pursuant to the Plan shall be deemed to confer
upon any individual to whom an Option may be granted hereunder any right to
remain in the employ or service of the Company or a parent or subsidiary
corporation of the Company.
2.17 Disputes Or Disagreements. As a condition of the granting of the
Option herein granted, the Optionee agrees, for him/herself, and his/her
personal representative, that any disputes or disagreements which may arise
under or as a result of or pursuant to this Agreement shall be determined by the
Board or the Committee in its sole discretion, and that any interpretation by
the Board or the Committee of the terms of this Agreement shall be final,
binding and conclusive.
2.18 Shareholder Approval. If the Plan is not approved by the
stockholders of the Company within one year of its date of adoption, the
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Optionee acknowledges that the Option granted hereunder shall, without further
action on behalf of the Company, become a nonstatutory option under the Plan.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer, and the Optionee has hereunto affixed
his signature.
WAVETECH, INC.
By
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Xxxxxx X. Xxxxx, President
"COMPANY"
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"OPTIONEE"
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