NAPCO SECURITY TECHNOLOGIES, INC. EMPLOYEE STOCK OPTION AGREEMENT
EXHIBIT 4.11
NAPCO SECURITY TECHNOLOGIES, INC.
EMPLOYEE STOCK OPTION AGREEMENT
OPTION AGREEMENT made as of the ____ day of _______, 20__ between NAPCO SECURITY TECHNOLOGIES, INC., a Delaware corporation with offices at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 (the “Company”), and _________, residing at ______________________________, an employee of the Company or of a direct or indirect subsidiary of the Company (the “Optionee”).
W I T N E S S E T H :
WHEREAS, the Company desires, by affording the Optionee an opportunity to purchase shares of its Common Stock, $.01 par value per share (the “Common Stock”), as hereinafter provided, to carry out the purpose of the Company's 2022 Employee Stock Option Plan (the “Plan”):
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter contained, the parties hereto mutually covenant and agree as follows:
2.Purchase Price. The purchase price of the shares of Common Stock issuable upon the exercise of the Option (the “Option Price”) shall be $ per share, which is not less than one hundred percent (100%) of the fair market value per share of Common Stock on the date hereof. Payment may be made:
(ii)by the transfer to the Company of shares of Common Stock owned by the Optionee having an aggregate fair market value on the date of exercise equal to the Option Price or the portion thereof being paid; or
(iii)at the discretion of the Compensation Committee and subject to any restrictions or conditions as it deems appropriate (including any restrictions as may be set forth in Rule 16b-3 under the Securities and Exchange Act of 1934), by electing to have the Company withhold from the shares issuable on exercise of the Option such number of shares of Common Stock as shall have an aggregate fair market value on the date of exercise equal to the Option Price or the portion thereof being paid; or
(iv)at the discretion of the Compensation Committee by a combination of (i) and (ii) or (i)and (iii) above.
3.Term of Option. The term of the Option shall be for a period of ten (10) years from the date hereof, subject to earlier termination as provided in Paragraph 6. The Option is exercisable during its term only in accordance with the provisions of this Agreement.
The Option may not be exercised unless at the time the Option is exercised the Optionee shall be an employee of the Company or any subsidiary, except as expressly provided herein.
4.Incentive Stock Options Treatment. To the extent that the value of the shares underlying an Option that first becomes exercisable in any calendar year exceeds $100,000 such portion shall not qualify for incentive stock option treatment. The Optionee will not be entitled to incentive stock option tax treatment under Section 421(a) of the Code with respect to the transfer of a share of stock to an individual pursuant to his exercise of an incentive stock option if:
5.Nontransferability. The Option shall not be transferable and the Option may be exercised during the lifetime of the Optionee, only by such Optionee; provided, however, the Option may be transferred by will or the laws of descent and distribution, to the estate of a deceased employee, and the Option may be exercised by the estate's legal representative within three (3) months of the date of death. More particularly, but without limiting the generality of the foregoing, the Option may not be assigned, transferred, pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions hereof and of the Plan, and the levy of any execution, attachment, or similar process upon the Option, shall be null and void and without effect.
6.Termination of Option. If the Optionee shall cease to be employed by the Company or any subsidiary for any reason, including voluntary termination of service, dismissal, disability, retirement, death or otherwise, the Option shall terminate immediately except as expressly provided herein.
7.Registration of Shares. The Company intends to register the shares ("Shares") subject to the Plan with the Securities and Exchange Commission under the Securities Act of 1933. Upon any exercise of the Option, the Optionee shall make any representations and warranties required by applicable laws, including any state securities laws as may be required by counsel to the Company.
8.Stock Splits, Mergers, Etc. In the event of a recapitalization, stock split, stock combination, stock dividend, exchange of shares or a change in the corporate structure or shares of the Company, or similar event, the Board of Directors upon recommendation of the Compensation Committee shall make appropriate adjustments in the kind or number of shares which may be issued upon exercise of the Option and in the exercise price of the Option.
If the Company shall be a party to a merger or consolidation or shall sell substantially all its assets, each outstanding Option shall pertain and apply to the securities and/or property which a holder of the number of shares of Common Stock subject to the Option immediately prior to such merger, consolidation, or sale of assets would be entitled to receive in such merger, consolidation or sale of assets.
9.Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Company at its offices at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, Attention: Treasurer. Such notice shall state that the Option is being exercised thereby and the number of shares of Common Stock in respect of which it is being exercised. It shall be signed by the person or persons so exercising the Option and shall be accompanied by payment in full of the Option Price for such shares of Common Stock as provided in Paragraph 2. The Company shall advise the Company’s transfer
agent to issue, in the name of the person or persons exercising the Option, a certificate or certificates representing such shares as soon as practicable after the notice and payment shall be received.
The Optionee shall have no rights of a stockholder with respect to shares of Common Stock to be acquired by the exercise of the Option until a certificate or certificates representing such shares are issued to him. All shares of Common Stock purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.
10.General. The Company shall at all times during the terms of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement, shall pay all original issue taxes, if any, with respect to the issuance of shares of Common Stock pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith, and shall, from time to time, use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.
11.Representations of Optionee. The Optionee hereby represents that he and any related persons or entities, within the meaning of Section 424(d) of the Code, do not own more than ten percent (10%) of the total combined voting power of all classes of capital stock of the Company, and in accepting the Option herein granted to him, agrees to the terms of such Option as of the date hereof.
12.Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by first class mail, postage prepaid, to the address as hereinafter provided. Each notice shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its offices at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 (Attention: Treasurer). Each notice to the Optionee shall be addressed to the Optionee at the Optionee's last known address.
13.Incorporation of Plan. Notwithstanding the terms and conditions herein, this Agreement shall be subject to and governed by all the terms and conditions of the Plan. A copy of the Plan has been delivered to the Optionee and is hereby incorporated by reference. In the event of any discrepancy or inconsistency between the terms and conditions of this Agreement and of the Plan, the terms and conditions of the Plan shall control.
14.Continuance of Employment. The granting of the Option is in consideration of the Optionee's continuing employment by the Company or any subsidiary; provided, however, nothing in this Agreement shall confer upon the Optionee the right to continue in the employ of the Company or any subsidiary or affect the right of the Company or any subsidiary to terminate the Optionee's employment at any time in the sole discretion of the Company’s or any subsidiary, with or without cause.
15.Interpretation. The interpretation and construction of any terms or conditions of the Plan, or of this Agreement or other matters related to the Plan by the Compensation Committee or the Board of Directors shall be final and conclusive.
16.Enforceability. This Agreement shall be binding upon the Optionee, his estate, his personal representatives and beneficiaries.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunto duly authorized, and the Optionee has hereunto set his hand all as of this day and year first above written.
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| Dated: | |
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| By: | |
| | Xxxxxxx Xxxxxxx |
| | Chairman of the Board |
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EXHIBIT A
TO
STOCK OPTION AGREEMENT
The Option is exercisable during its term only in accordance with the following:
From Date of | | Percentage Exercisable | ||
Option Agreement | | Per Time Period | | Cumulative |
| | | | |
1 year |
| 20 |
| 20 |
| | | | |
2 years | | 20 | | 40 |
| | | | |
3 years | | 20 | | 60 |
| | | | |
4 years | | 20 | | 80 |
| | | | |
5 years | | 20 | | 100 |
Notwithstanding anything herein to the contrary, such holder's options will vest and become immediately exercisable in full upon a change in control. For purposes of this Plan, a "change in control" shall mean:
(i)either (x) any merger or consolidation of the Company into or with another corporation, (y) the acquisition by another person, group or entity after the date hereof of beneficial ownership of more than 25% of the Common Stock of the Company (such person, group or entity reporting, or being required to report, the acquisition pursuant to Section 13 of the Securities Exchange Act of 1934), or (z) the commencement of a non-issuer tender offer seeking to acquire more than 25% of the Common Stock of the Company, or
(ii)any sale by the Company of substantially all of the assets and business of the Company for cash, stock, or any combination thereof, unless, immediately after such sale, the holders of Common Stock of the Company immediately prior to such sale own more than 50% or more of the voting capital stock of the acquiring corporation or, if the acquiring person or entity is not a corporation, more than 50% of the voting equity interests of such acquiring person or entity, or
(iii)if a majority of Company’s Board of Directors consists of individuals who were not Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination.
