MITY ENTERPRISES, INC.
INCENTIVE STOCK OPTION AGREEMENT
This INCENTIVE STOCK OPTION AGREEMENT (the "Agreement") is made this
[day] day of [month], [year], by and between MITY Enterprises, Inc., a Utah
corporation (the "Company") and [name], an individual resident of [city],
[state] ("Employee").
1. GRANT OF OPTION. The Company hereby grants Employee the option (the
"Option") to purchase all or any part of an aggregate of [quantity] shares
(the "Shares") of Common Stock of the Company at the exercise price of
$[price] per share according to the terms and conditions set forth in this
Agreement and in the MITY Enterprises, Inc. 2006 Stock Incentive Plan (the
"Plan"). The Option will be treated as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). The Option is issued under the Plan and is subject to its terms and
conditions. A copy of the Plan will be furnished upon request of Employee.
The Option shall terminate at the close of business ten years from the
date hereof.
2. VESTING OF OPTION RIGHTS.
(a) Except as otherwise provided in this Agreement, the Option may be
exercised by Employee in accordance with the following schedule:
Number of Shares
On or after each of with respect to which
the following dates the Option is exercisable
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(b) During the lifetime of Employee, the Option shall be exercisable
only by Employee and shall not be assignable or transferable by Employee,
other than by will or the laws of descent and distribution.
(c) Employee understands that to the extent that the aggregate fair
market value (determined at the time the option was granted) of the shares of
Common Stock of the Company with respect to which all options that are
incentive stock options within the meaning of Section 422 of the Code are
exercisable for the first time by Employee during any calendar year exceed
$100,000, in accordance with Section 422(d) of the Code, such options shall be
treated as options that do not qualify as incentive stock options.
3. EXERCISE OF OPTION AFTER DEATH OR TERMINATION OF EMPLOYMENT. The
Option shall terminate and may no longer be exercised if Employee ceases to be
employed by the Company or its affiliates, except that:
(a) If Employee's employment shall be terminated for any reason,
voluntary or involuntary, other than for "Cause" (as defined in Section 3(e))
or Employee's death or disability (within the meaning of Section 22(e)(3) of
the Code), Employee may at any time within a period of 3 months after such
termination exercise the Option to the extent the Option was exercisable by
Employee on the date of the termination of Employee's employment.
(b) If Employee's employment is terminated for Cause, the Option shall
be terminated as of the date of the act giving rise to such termination.
(c) If Employee shall die while the Option is still exercisable
according to its terms or if employment is terminated because Employee has
become disabled (within the meaning of Section 22(e)(3) of the Code) while in
the employ of the Company and Employee shall not have fully exercised the
Option, such Option may be exercised at any time within 12 months after
Employee's death or date of termination of employment for disability by
Employee, personal representatives or administrators or guardians of Employee,
as applicable or by any person or persons to whom the Option is transferred by
will or the applicable laws of descent and distribution, to the extent of the
full number of Shares Employee was entitled to purchase under the Option on
(i) the earlier of the date of death or termination of employment or (ii) the
date of termination for such disability, as applicable.
(d) Notwithstanding the above, in no case may the Option be exercised to
any extent by anyone after the termination date of the Option.
(e) "Cause" shall mean (i) the willful and continued failure by Employee
substantially to perform his or her duties and obligations (other than any
such failure resulting from his or her incapacity due to physical or mental
illness), (ii) Employee's conviction or plea bargain of any felony or gross
misdemeanor involving moral turpitude, fraud or misappropriation of funds or
(iii) the willful engaging by Employee in misconduct which causes substantial
injury to the Company or its affiliates, its other employees or the employees
of its affiliates or its clients or the clients of its affiliates, whether
monetarily or otherwise. For purposes of this paragraph, no action or failure
to act on Employee's part shall be considered "willful" unless done or omitted
to be done, by Employee in bad faith and without reasonable belief that his or
her action or omission was in the best interests of the Company.
4. METHOD OF EXERCISE OF OPTION. Subject to the foregoing, the Option
may be exercised in whole or in part from time to time by serving written
notice of exercise on the Company at its principal office within the Option
period. The notice shall state the number of Shares as to which the Option is
being exercised and shall be accompanied by payment of the exercise price.
Payment of the exercise price shall be made (i) in cash (including bank check,
personal check or money order payable to the Company), (ii) with the approval
of the Company (which may be given in its sole discretion), by delivering to
the Company shares of the Company's Common Stock already owned by Employee
having a Fair Market Value (as defined in the Plan) equal to the full exercise
price of the Shares being acquired.
5. MISCELLANEOUS.
(a) PLAN PROVISIONS CONTROL. In the event that any provision of the
Agreement conflicts with or is inconsistent in any respect with the terms of
the Plan, the terms of the Plan shall control.
(b) NO RIGHTS OF STOCKHOLDERS. Neither Employee, Employee's legal
representative nor a permissible assignee of this Option shall have any of the
rights and privileges of a stockholder of the Company with respect to the
Shares, unless and until such Shares have been issued in the name of Employee,
Employee's legal representative or permissible assignee, as applicable.
(c) NO RIGHT TO EMPLOYMENT. The grant of the Option shall not be
construed as giving Employee the right to be retained in the employ of, or as
giving a director of the Company or an Affiliate (as defined in the Plan) the
right to continue as a director of the Company or an Affiliate with, the
Company or an Affiliate, nor will it affect in any way the right of the
Company or an Affiliate to terminate such employment or position at any time,
with or without cause. In addition, the Company or an Affiliate may at any
time dismiss Employee from employment, or terminate the term of a director of
the Company or an Affiliate, free from any liability or any claim under the
Plan or the Agreement. Nothing in the Agreement shall confer on any person
any legal or equitable right against the Company or any Affiliate, directly or
indirectly, or give rise to any cause of action at law or in equity against
the Company or an Affiliate. The Option granted hereunder shall not form any
part of the wages or salary of Employee for purposes of severance pay or
termination indemnities, irrespective of the reason for termination of
employment. Under no circumstances shall any person ceasing to be an employee
of the Company or any Affiliate be entitled to any compensation for any loss
of any right or benefit under the Agreement or Plan which such employee might
otherwise have enjoyed but for termination of employment, whether such
compensation is claimed by way of damages for wrongful or unfair dismissal,
breach of contract or otherwise. By participating in the Plan, Employee shall
be deemed to have accepted all the conditions of the Plan and the Agreement
and the terms and conditions of any rules and regulations adopted by the
Committee and shall be fully bound thereby.
(d) GOVERNING LAW. The validity, construction and effect of the Plan
and the Agreement, and any rules and regulations relating to the Plan and the
Agreement, shall be determined in accordance with the internal laws, and not
the law of conflicts, of the State of Utah.
(e) SEVERABILITY. If any provision of the Agreement is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Agreement under any law deemed applicable by the Committee (as
defined in the Plan), such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the
purpose or intent of the Plan or the Agreement, such provision shall be
stricken as to such jurisdiction or the Agreement, and the remainder of the
Agreement shall remain in full force and effect.
(f) NO TRUST OR FUND CREATED. Neither the Plan nor the Agreement shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and Employee or
any other person.
(g) HEADINGS. Headings are given to the Sections and subsections of the
Agreement solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Agreement or any provision thereof.
(h) CONDITIONS PRECEDENT TO ISSUANCE OF SHARES. Shares shall not be
issued pursuant to the exercise of the Option unless such exercise and the
issuance and delivery of the applicable Shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, the requirements of any
applicable Stock Exchange or the Nasdaq National Market and the Utah Revised
Business Corporation Act. As a condition to the exercise of the purchase
price relating to the Option, the Company may require that the person
exercising or paying the purchase price represent and warrant that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation and warranty is required by law.
(i) WITHHOLDING. If Employee shall dispose of any of the shares of
Common Stock acquired upon exercise of the Option within two (2) years from
the date the Option was granted or within one (1) year after the date of
exercise of the Option, then, in order to provide the Company with the
opportunity to claim the benefit of any income tax deduction, Employee shall
promptly notify the Company of the dates of acquisition and disposition of
such shares, the number of shares so disposed of, and the consideration, if
any, received for such shares. In order to comply with all applicable federal
or state income tax laws or regulations, the Company may take such action as
it deems appropriate to assure (i) notice to the Company of any disposition of
the shares of the Company within the time periods described above, and (ii)
that, if necessary, all applicable federal or state payroll, withholding,
income or other taxes are withheld or collected from Employee.
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
on the date set forth in the first paragraph.
MITY ENTERPRISES, INC.
By:
Name:
Title:
[EMPLOYEE]
Name:
