EXHIBIT 10.15
COMPUTER NETWORK TECHNOLOGY CORPORATION
2002 STOCK AWARD PLAN
INCENTIVE STOCK OPTION AGREEMENT
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Name: [Name]
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No. of Shares Covered: [Shares] Date of Grant: [Date_of_Grant]
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Exercise Price Per Share: [Price] Expiration Date: [Expiration_Date_]
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Exercise Schedule (Cumulative):
No. of Shares
Initial Date of As to Which Option
Exercisability Becomes Exercisable
[Date_1_] [Vest_1]
[Date_2_] [Vest_2_]
[Date_3_] [Vest_3_]
[Date_4] [Vest_4]
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This is an INCENTIVE STOCK OPTION AGREEMENT between Computer
Network Technology Corporation, a Minnesota corporation ("CNT"), and the
employee of CNT or an Affiliate of CNT listed above (the "Employee").
WHEREAS, CNT desires to carry out the purposes of its 2002
Stock Award Plan (the "Plan") by affording Employee an opportunity to purchase
shares of Common Stock of CNT, par value $.01 per share (the "Common Shares"),
in accordance with the terms set forth in this Agreement.
NOW, THEREFORE, CNT and Employee agree as follows:
1. GRANT OF OPTION. Subject to the terms of the Plan and this
Agreement, CNT hereby grants to Employee the right and option (the "Option") to
purchase the number of Common Shares specified at the beginning of this
Agreement. The Option is intended to be an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. PURCHASE PRICE. The purchase price of each of the Common
Shares subject to the Option shall be the Exercise Price Per Share specified at
the beginning of this Agreement, which equals 100% of the Fair Market Value (as
defined in the Plan) per Common Share on the Date of Grant.
3. OPTION EXERCISE PERIOD. (a) Subject to the provisions of
Sections 5(a), 5(b), and 6, the Option shall become exercisable as to the number
of shares and on the dates specified in the exercise schedule at the beginning
of this Agreement. The exercise schedule shall be cumulative, which means that
to the extent the Option has not already been exercised and has not expired,
terminated, or been cancelled, Employee may at any time and from time to time
purchase all or any portion of the Common Shares then purchasable under the
exercise schedule.
(b) The Option and all rights to purchase shares thereunder
shall cease on the earliest of: (i) The Expiration Date specified at the
beginning of this Agreement (which date is not more than 10 years after the date
of this Agreement); (ii) The expiration of the period after Employee's
termination of employment within which the Option is exercisable as specified in
Section 5(a) or 5(b), whichever is applicable; or (iii) The date, if any, fixed
for cancellation under Section 10(b).
(c) Notwithstanding any other provision of this Agreement, no
one may exercise the Option, in whole or in part, after its Expiration Date.
4. MANNER OF EXERCISING OPTION. (a) Subject to the terms and
conditions of this Agreement, the Option may be exercised by delivering or
mailing written notice of exercise to CNT at its principal executive office,
marked for the attention of the Human Resources Department. The notice shall
state the election to exercise the Option, the number of Common Shares for which
it is being exercised, and be signed by the person exercising the Option. If the
person exercising the Option is not Employee, he or she shall enclose with the
notice appropriate proof of his or her right to exercise the Option. The date of
exercise of the Option shall be the date that the written notice of exercise
with appropriate payment under the following subsection (b) is actually received
by the Human Resources Department of CNT.
(b) Notice of exercise of the Option shall be accompanied by
either: (i) payment (by certified or cashier's check payable to the order of
CNT) of the purchase price of the Common Shares being purchased; or (ii) if so
permitted by the Stock Plans Committee of the Board of Directors of CNT (the
"Committee"), certificates for unencumbered Common Shares having an aggregate
Fair Market Value (as defined in the Plan) on the date of exercise equal to the
purchase price of the Common Shares to be purchased; or (iii) if so permitted by
the Committee, a combination of cash and such unencumbered Common Shares or (iv)
if so permitted by the Committee, appropriate documentation evidencing the sale
of the Common Shares acquired upon exercise of the Option and the use of the
proceeds from such sale as payment of the Purchase Price for such Shares. The
purchaser shall endorse all certificates delivered to CNT under the foregoing
subsections (b)(ii) or (iii) in blank and represent and warrant in writing that
he or she is the owner of the shares so delivered free and clear of all liens,
security interests, and other restrictions or encumbrances.
(c) As soon as practicable after receipt of the purchase price
provided for above (and any payment required under Section 12), CNT shall
deliver to the person exercising the Option, in the name of Employee (or his or
her estate or heirs, as the case may be) a certificate or certificates
representing the Common Shares being purchased. CNT shall pay all original issue
or transfer taxes, if any, with respect to the issue of the Common Shares to the
person exercising the Option and all fees and expenses necessarily incurred by
CNT in connection with the exercise of the Option. All Common Shares issued upon
exercise of the Option shall be fully paid and nonassessable. Notwithstanding
anything in this Agreement to the contrary, CNT shall not be required, upon
exercise of the Option or any part thereof, to issue or deliver any Common
Shares unless such issuance has been registered under federal and applicable
state securities laws or an exemption therefrom is available.
5. EXERCISABILITY OF OPTION AFTER TERMINATION OF EMPLOYMENT.
(a) During the lifetime of Employee, the Option may be exercised only while
Employee is an employee of CNT or an Affiliate and only if Employee has been
continuously so employed since the date of this Agreement, except that:
(i) If Employee has been continuously employed by CNT (or an
Affiliate) for at least 12 full calendar months following the date of
this Agreement, Employee may exercise the Option within 90 days after
termination of Employee's employment, but only to the extent that the
Option was exercisable immediately prior to Employee's termination of
employment;
(ii) If Employee is disabled (within the meaning of Section
22(e)(3) of the Code) while employed by CNT, Employee (or his or her
legal representative) may exercise the Option within one year after the
termination of Employee's employment; and
(iii) If Employee retires, Employee (or his or her legal
representative) may exercise the Option within three years after the
retirement. For purposes of this Agreement, an Employee shall be
treated as having retired if the Employee terminates employment with
CNT and all Affiliates on or after attaining age 55 and after having
completed at least five years of continuous service since Employee's
most recent date of hire with CNT and all Affiliates, as shown on the
payroll system of CNT and its Affiliates. However, Employee will not be
treated as having retired if Employee is (or could have been)
terminated for cause as determined by the Committee, considering as
cause misconduct that would disqualify Employee from collecting
reemployment (unemployment) compensation benefits under the laws of the
state of Minnesota. If Employee exercises the Option more than three
months after the Employee's termination of employment, then the Option
will not be considered an "incentive stock option" within the meaning
of the Code.
(b) In the event of Employee's death while employed by CNT or
an Affiliate, or within 90 days after his or her termination of employment, the
person designated by Employee as his or her beneficiary under this Agreement on
a form prescribed by and filed with the Committee, the legal representative of
Employee's estate, or the person who acquired the right to exercise the Option
by bequest or inheritance may exercise the Option within one year after the
death of Employee.
(c) Neither the transfer of Employee between CNT and any
Affiliate, nor a leave of absence granted to Employee and approved by the
Committee shall be deemed a termination of employment.
(d) In no event may an Option be exercised after its
Expiration Date.
6. ACCELERATION OF OPTION ON DISABILITY OR DEATH. If Section
5(a)(ii) or 5(b) of this Agreement is applicable, the Option, whether or not
previously exercisable, shall become immediately exercisable in full.
7. LIMITATION ON TRANSFER. During the lifetime of Employee,
only Employee or his or her guardian or legal representative may exercise the
Option. Employee may not assign or transfer the Option otherwise than by will,
the laws of descent and distribution, or under Section 18 of the Plan, and the
Option shall not be subject to pledge, attachment, or similar process. Any
attempt to assign, transfer, pledge, or otherwise dispose of the Option contrary
to the provisions of this Agreement, and the levy of any attachment or similar
process upon the Option, shall be null and void.
8. NO SHAREHOLDER RIGHTS BEFORE EXERCISE. Employee shall
have none of the rights of a shareholder of CNT with respect to any share
subject to the Option until the share is actually issued to him or her upon
exercise of the Option.
9. OTHER BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by Employee under this Agreement shall not be deemed a part of
Employee's regular, recurring compensation for purposes of the termination,
indemnity, or severance pay law of any country and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract, or similar arrangement provided by CNT (or an Affiliate
of CNT) unless expressly so provided by such other plan, contract, or
arrangement, or unless the Committee determines that the Option, or a portion
thereof, should be included to accurately recognize that the Option has been
made in lieu of a portion of competitive cash compensation, if such is the case.
10. CHANGES IN CAPITALIZATION; FUNDAMENTAL CHANGE. (a) The
Committee may in its sole discretion make appropriate adjustments in the number
and types of shares subject to the Option and in the Purchase Price Per Share to
give effect to any adjustments made in the number or types of shares of CNT
through a dissolution or liquidation of CNT, a sale of substantially all of the
assets of CNT, a merger or consolidation of CNT with or into any other
corporation (regardless of whether CNT is the surviving corporation), a
statutory share exchange involving capital stock of CNT (each of the foregoing,
a "Fundamental Change"), a recapitalization, a reclassification, a stock
dividend, a stock split, a stock combination, or other relevant change. The
Committee may also take such action with respect to the Option as it deems
appropriate, in its sole discretion, in the event of the divestiture, spin-off,
or transfer of an Affiliate or a line of business of CNT that affects Employee.
(b) In the event of a proposed Fundamental Change: (i)
involving a merger, consolidation, or statutory share exchange, unless
appropriate provision is made for the protection of the Option by the
substitution of options in appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the parent
corporation of CNT or such surviving corporation, to be issuable upon the
exercise of options in lieu of the Option and Common Shares, or (ii) involving
the dissolution or liquidation of CNT, the Committee shall provide written
notice to Employee at least 20 days prior to the occurrence of the Fundamental
Change that the Option, whether or not then exercisable, shall be cancelled at
the time of, or immediately prior to the occurrence of, the Fundamental Change
in exchange for payment to Employee (or the person then entitled to exercise the
Option), within 10 days after the Fundamental Change, of cash equal to the
amount, if any, for each Common Share covered by the cancelled Option, by which
the Fair Market Value, as defined in this Section 10(b), per Common Share
exceeds the exercise price per Common Share of the Option. At the time of the
notice provided for in the preceding sentence, the Option shall immediately
become exercisable in full and Employee (or the person then entitled to exercise
the Option) shall have the right, during the period preceding the time of
cancellation of the Option, to exercise the Option as to all or any part of the
Common Shares covered by the Option. In the event of a declaration under this
Section 10(b), if the Option shall not have been exercised prior to the
Fundamental Change, it shall be cancelled at the time of, or immediately prior
to, the Fundamental Change, as provided in the notice. Notwithstanding the
foregoing, Employee shall not be entitled to the payment provided for in this
Section 10(b) if the Option shall have expired. For purposes of this Section
10(b) only, "Fair Market Value" per Common Share means the cash plus the fair
market value, as determined in good faith by the Committee, of the non-cash
consideration to be received per Common Share by the shareholders of CNT upon
the occurrence of the Fundamental Change, notwithstanding anything to the
contrary in the Plan or this Agreement.
11. DISQUALIFYING TRANSFERS OF SHARES. Employee acknowledges
that if any stock received upon the exercise of any portion of the Option is
sold within two years from the effective date of the grant of the Option or
within one year from the effective date of exercise of the Option, or if certain
other requirements of the Code are not satisfied, such stock will be deemed
under the Code not to have been acquired by Employee pursuant to an "incentive
stock option" and that CNT shall not be liable to the Employee in the event the
Option for any reason is deemed not to be an incentive stock option within the
meaning of the Code.
12. TAX WITHHOLDING. CNT or an Affiliate may be obligated or
permitted to withhold or pay federal, state, and local income taxes, social
security taxes, national insurance contributions, or other taxes upon Employee's
exercise of the Option. If CNT or an Affiliate is required or permitted to
withhold or pay such taxes, Employee will promptly pay in cash upon demand to
CNT or the Affiliate, such amounts as shall be necessary to satisfy or fund CNT
or the Affiliate; provided, however, that in lieu of all or any part of such a
cash payment, the Committee may, but shall not be required to, permit Employee
to elect to cover all or any part of the withholdings or payments, and to cover
any additional withholdings or payments up to the amount needed to cover
Employee's full federal, state, and local tax with respect to income arising
from the exercise of the Option, through a reduction of the number of Common
Shares delivered upon exercise or through a subsequent return to CNT of shares
delivered upon exercise, in each case valued in the same manner as used in
computing the taxes under the applicable laws. Further, such elections may be
subject to the limitations of the Exchange Act. The Company or the Affiliate may
deduct such withholdings or an amount sufficient to cover such payments from
subsequent earnings payable to Employee. To the extent that the Company or the
Affiliate cannot (or does not) make the deductions, Employee or person receiving
the Common Shares shall enter into such other arrangements for the individual to
reimburse the Company or the Affiliate for the amount of the tax liability as
the Company shall require, and the Company may make the individual's agreement
to such arrangements a condition of the exercise of any Option or the receipt of
any Common Shares or Award under the Plan.
13. INTERPRETATION OF THIS AGREEMENT. All decisions and
interpretations made by the Committee with regard to any question arising under
this Agreement or the Plan shall be binding and conclusive upon CNT and
Employee. In the event that there is any inconsistency between the provisions of
this Agreement and the Plan, the provisions of the Plan shall govern.
14. NO RIGHT TO EMPLOYMENT. This Agreement shall not give
Employee a right to continued employment with CNT or any Affiliate, and CNT or
any Affiliate employing Employee may terminate his or her employment and
otherwise deal with Employee without regard to the effect it may have upon him
or her under this Agreement.
15. GENERAL. CNT shall at all times during the term of this
Option reserve and keep available such number of Common Shares as will be
sufficient to satisfy the requirements of this Option Agreement. A copy of the
Plan is available to Employee from CNT upon request. Unless the context
otherwise dictates, capitalized terms that are not defined in this Agreement
have the meaning set forth in the Plan from time to time. This Agreement shall
be binding in all respects on Employee's heirs, representatives, successors and
assigns. This Agreement is entered into under the laws of the State of Minnesota
and shall be construed and interpreted thereunder.
IN WITNESS WHEREOF, Employee and CNT have executed this
Agreement and it is effective as of the Date of Grant of the Option.
Employee
COMPUTER NETWORK TECHNOLOGY CORPORATION
By: ___________________________________________
Its: Director of Compensation and Benefits
