EXHIBIT 4.6
THIS OPTION AND THE SHARES UNDERLYING THIS OPTION HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1993 (ACT), AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT. THIS OPTION IS NONTRANSFERABLE AND
THE SHARES UNDERLYING THIS OPTION MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH MUST
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO ALTER THE AT-
WILL EMPLOYMENT RELATIONSHIP BETWEEN OPTIONEE AND THE COMPANY.
EITHER PARTY MAY TERMINATE THE EMPLOYMENT RELATIONSHIP AT ANY
TIME, FOR ANY REASON, OR FOR NO REASON AT ALL.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES
OF THE CORPORATION STOCK SHALL BE ISSUED PURSUANT TO AN OPTION
UNDER THE 1997 INCENTIVE STOCK OPTION PLAN UNLESS THE
CORPORATION'S 1997 PLAN SHALL HAVE FIRST BEEN APPROVED BY
SHAREHOLDERS OF THE CORPORATION, BY MAJORITY VOTE, AT A DULY HELD
SHAREHOLDERS MEETING.
OPTIONEE SHOULD CONSULT HIS OR HER OWN TAX ADVISOR FOR A
DETERMINATION OF THE PROPER TAX TREATMENT OF THIS OPTION UNDER
FEDERAL AND STATE INCOME TAX LAWS.
XXXXXXX MEDICAL PRODUCTS
INCENTIVE STOCK OPTION AGREEMENT
(under 1997, 1996, 1995, 1994, 1993, 1992, and 1991
Incentive Stock Option Plans)
THIS AGREEMENT (the "Agreement") is made effective _________
______________________________________ , by and between XXXXXXX
MEDICAL PRODUCTS, a corporation organized under the laws of the
State of Utah (the "Company"), and ______________________________
_______________________, an employee of the Company ("Optionee").
WHEREAS, Optionee is an employee of the Company, and the
Company desires to grant Optionee an option to purchase shares of
the Company's common stock (the "Stock"), in accordance with one
or more of six incentive stock option plans of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
promises hereafter set forth, it is agreed by and between the
parties as follows:
1. Grant of Option.
(a) The Company hereby grants to Optionee the right
and option (the "Option") to purchase upon and subject to the
terms and conditions of the Applicable Plan or Plans (as defined
below), all or part of the following shares of Stock at a
purchase price of $______________________ per share (the "Option
Price"), in the manner and subject to the terms and conditions
set forth herein:
Continued
Employment
Required
(following the
effective date
Option to of this
Purchase Applicable Plan Agreement) for
______ under 19__ Plan _______
shares year(s)
______ under 19__ Plan _______
shares year(s)
______ under 19__ Plan _______
shares year(s)
(b) The effective date of this grant by the applicable
Stock Option Committee of the Board of Directors is the same as
the effective date of this Agreement first shown above.
(c) For all purposes of this Agreement, the term
"Applicable Plan" shall mean the incentive stock option plan or
plans under which Optionee is being granted an option to purchase
Stock, as identified in paragraph (a) above.
(d) The Option Price is not less than one hundred
percent (100%) of the fair market value of such stock as of the
effective date of action of the Stock Option Committee granting
this Option.
2. Continued Employment Requirement. This Option may be
exercised, in whole or in part, at any time only after Optionee
has served as an employee of the Company following the effective
date of this Agreement for at least the period shown in paragraph
1(a) above. However, the occurrence of either of the following
events will cause the Option to become immediately and fully
exercisable, notwithstanding the above requirement:
(a) The death of Optionee; or
(b) The occurrence of a Business Combination (as
defined below) which is not approved by a two-thirds vote of the
Continuing Directors (as defined below).
For purposes of this Section, the following definitions
apply:
(c) "Acquiring Person" shall mean any individual,
corporation (other than this corporation or any of its
subsidiaries), partnership, other person or entity which,
together with its affiliates and associates (as defined in the
Exchange Act or rules and regulations promulgated thereunder),
and together with any other individual, corporation (other than
the Company or any of its subsidiaries), partnership, person or
entity with which it or they have any agreement, arrangement, or
understanding with respect to acquiring, holding, voting, or
disposing of the Company's Stock, beneficially owns (within the
meaning of the Exchange Act or rules and regulations promulgated
thereunder) in the aggregate 10% or more of the outstanding
Voting Stock of the Company. "Acquiring Person" shall also
include any assignee of, or person or entity which has succeeded
to any shares of the Company's stock which were at any time prior
to the date of assignment or succession beneficially owned by, a
10% Voting Stock owner, or an affiliate or associate of a 10%
Voting Stock owner, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions
not involving a public offering within the meaning of the
Securities Act of 1933, as amended. A person or entity, its
affiliates and associates, assignees and successors, and all such
other persons or entities with whom they have any such agreement,
arrangement, or understanding shall be deemed a single Acquiring
Person for purposes of this paragraph. Also for purposes of this
paragraph, the Continuing Directors shall by majority vote have
the power to determine, on the basis of information known to the
Board, if and when there is an Acquiring Person. Any such
determination shall be conclusive and binding for all purposes of
this paragraph, provided such determination is reasonable and
made in accordance with applicable law.
(d) "Business Combination" shall mean:
(i) any merger, consolidation, or share exchange
of the Company or a subsidiary of the Company with or into an
Acquiring Person;
(ii) any purchase for cash and/or securities by an
Acquiring Person of 20% or more of the Company's outstanding
shares of Voting Stock (including the purchase(s) which cause(s)
the purchaser to become an Acquiring Person hereunder);
(iii) any sale, lease, exchange, transfer or other
disposition (including without limitation, a mortgage or other
security device) in a single transaction or related series of
transactions, of all or any Substantial Part (as hereinafter
defined) of the assets either of the Company (including without
limitation, any voting securities of a subsidiary) or of a
subsidiary of the Company to or with an Acquiring Person;
(iv) any merger or consolidation of an Acquiring
Person with or into the Company or a subsidiary of the Company;
(v) any sale, lease, exchange, transfer or other
disposition (including without limitation, a mortgage or other
security device) in a single transaction or related series of
transactions, of all or any Substantial Part of the assets of an
Acquiring Person to the Company or a subsidiary of the Company;
(vi) the issuance or transfer of any securities of
the Company or a subsidiary of the Company to an Acquiring
Person;
(vii) the adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed, directly or
indirectly, by or on behalf of, or pursuant to any agreement,
arrangement or understanding (whether or not in writing) with an
Acquiring Person;
(viii) any merger or consolidation of the Company
with a subsidiary of the Company proposed by or on behalf of an
Acquiring Person;
(ix) any reclassification of securities (including
without limitation, any stock split, stock dividend, or other
distribution of stock in respect of stock, or any reverse stock
split), or recapitalization of the Company or any merger or
consolidation of the Company with any subsidiary of the Company,
or any other transaction (whether or not with or into, or
otherwise involving the Acquiring Person), proposed by, on behalf
of, or pursuant to any agreement, arrangement or understanding
(whether or not in writing) with the Acquiring Person or any
affiliate or associate of the Acquiring Person which has the
effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of stock of the Company or any
subsidiary of the Company which is directly or indirectly owned
by the Acquiring Person, except as a result of immaterial
fractional share adjustments;
(x) any agreement, contract, or other arrangement
providing for any of the transactions described in this
definition of Business Combination; and
(xi) any other transaction with an Acquiring
Person which requires the approval of the Company's stockholders
under the Utah Revised Business Corporation Act.
A person who is an Acquiring Person as of:
(xii) the time any definitive agreement relating to
a Business Combination is entered into;
(xiii) the record date for the determination of
stockholders entitled to notice of and to vote on a Business
Combination; or
(xiv) immediately prior to the consummation of a
Business Combination,
shall be an Acquiring Person for purposes of this definition.
(e) "Continuing Director" shall mean any director of
the Company who was a director prior to the time the Acquiring
Person became such, and any other director whose election or
appointment as a director was recommended or approved by a
majority vote of the Continuing Directors. A majority or two-
thirds vote of the Continuing Directors shall mean, respectively,
a vote of the majority of the Continuing Directors, a vote of or
two-thirds of the Continuing Directors, then in office, provided
that at least two Continuing Directors are then in office and
participate in such vote.
(f) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(g) "Substantial Part" shall mean an amount of assets
having an aggregate fair market value of at least $500,000.
(h) "Voting Stock" shall mean Common Stock and all
other securities of the Company entitled to vote generally for
the election of directors.
3. Termination of Option. Notwithstanding contrary
provisions of this Agreement, the Option and any part thereof, to
the extent not theretofore exercised, will terminate upon the
first to occur of the following dates:
(a) The expiration of three (3) months after the date
on which Optionee's employment by the Company is terminated
(except if such termination is by reason of permanent and total
disability);
(b) The expiration of twelve (12) months after the
date on which Optionee's employment by the Company is terminated,
if such termination is by reason of Optionee's permanent and
total disability; or
(c) The expiration of seven (7) years from the date
hereof.
For purposes of this Agreement, the term "permanent and
total disability" shall mean that Optionee is unable to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last
for a continuous period of not less than twelve months. Optionee
acknowledges and agrees that the Company will have no obligation
to give Optionee any notice or reminder of the expiration of any
of the periods described in the foregoing subparagraphs or
similar periods described in any previous Incentive Stock Option
Agreements executed by the Company and Optionee.
4. Method of Exercise.
(a) This Option will be exercised by written notice
("Notice") by Optionee sent to the Company's Secretary (original
Notice or via facsimile) at the Company's principal place of
business stating the number of shares with respect to which this
Option is being exercised. Such Notice must be accompanied by:
(i) Cash or a check in payment of the Option
Price for the number of shares specified; or
(ii) If Optionee desires to use Company Stock
owned by Optionee as payment of all or part of the Option Price,
Stock certificates (duly endorsed for transfer) representing said
shares of Stock to be used as payment (the "Exchange Shares"); or
(iii) Cash (or a check) and the Exchange Shares; or
(iv) In the event of a "cashless", broker-assisted
Option exercise, a copy of a letter (executed by Optionee) to
Optionee's broker instructing the broker to deliver the exercise
price to the Company.
For all purposes of this Agreement and the calculation of
applicable federal taxes, the date the Company Secretary receives
the Notice and the applicable required items set forth in
subparagraphs (i) through (iv) above shall be deemed to be and
treated by the parties (and is referred to herein) as the
"Exercise Date".
NOTWITHSTANDING the foregoing:
(v) Any attempted "cashless", broker-assisted
Option exercised by Optionee will be void and of no effect unless
the broker who so assists in such Option exercise is on a list of
"Approved Option Exercise Brokers" to be maintained by the
Company Secretary; and
(vi) If Optionee makes a "cashless", broker-
assisted Option exercise, then the Company must receive payment
in full of the Option Price in cash and/or transferred funds no
later than the earlier of fifteen (15) business days following
the Exercise Date or the first to occur of the possible
termination dates under Section 3 above. To the extent of shares
with respect to which such funds are not so received before said
deadline the attempted Option exercise will be void and of no
effect hereunder.
(b) Upon Optionee's strict compliance with the
provisions hereof, including without limitation the Company's
receipt of cash or transferred funds and/or sufficient Exchange
Shares as payment in full of the Option Price, then the Company
will notify its transfer agent to make immediate delivery of the
shares of Stock covered by such Option exercise. However, if any
law or regulation requires the Company to take any action with
respect to the shares specified in such Notice before the
issuance thereof, the delivery date of such shares may be
extended for the period necessary to take such action.
(c) If Exchange Shares are used as payment of all or
part of the Option Price, the Company will in good faith
determine the fair market value of the Exchange Shares used as
payment as of the date the Notice is received by the Company's
Secretary. Only whole Exchange Shares will be used as any part
of payment of the Option Price for purposes of this Section. The
Company will cancel the Stock certificates of such Exchange
Shares submitted and reissue balance certificates for any
remaining shares not needed to complete the purchase.
(d) In any exercise of any part of this Option, unless
Optionee directs otherwise in Optionee's Notice to the Company,
the Option Price of any shares purchased will be paid in the
following order:
(i) First, from cash or other funds transferred
from Optionee to the Company; and
(ii) Second, from the Exchange Shares, the
certificate(s) for which shares are submitted along with the
Notice.
5. Minimum Shares Purchased.
(a) No fewer than one hundred (100) shares may be
purchased at one time unless the number purchased is the total
number which may be purchased at said time under the Option.
(b) No option or installment thereof shall be
exercisable except in respect of whole shares, and fractional
share interests shall be disregarded.
6. Reclassification. If this Option is outstanding when
the total number of issued shares of the Stock is increased or
decreased by any:
(a) change in par value;
(b) split up, or reverse split;
(c) reclassification; or
(d) distribution of a dividend payable in stock;
then the number of shares subject to this Option and the Option
Price per share shall be proportionately adjusted.
7. Rights Prior to Exercise of Option. This Option is
non-transferable by Optionee, other than by will or the laws of
descent and distribution in the event of Optionee's death.
During Optionee's lifetime, this Option is exercisable only by
Optionee or Optionee's guardian or legal representative.
Optionee has no rights as a shareholder with respect to the
Option shares until payment of the Option Price and delivery to
Optionee of such shares as herein provided.
8. Restriction on Disposition of Stock. All shares
acquired by Optionee pursuant to this Agreement are subject to
any restrictions on sale, encumbrance, or other disposition now
or hereafter contained in the Company's Bylaws or Articles of
Incorporation.
9. Income Taxes.
(a) Optionee has the sole responsibility to pay
federal and state income taxes with respect to his or her
exercise of the Option and sale of the Stock received by such
exercise. Optionee understands and acknowledges that if Optionee
disposes of the shares of Stock acquired by Optionee pursuant to
this Agreement within two (2) years from the date of this Option
or within one (1) year after the transfer of such shares to
Optionee, then this Option may not qualify as an Incentive Stock
Option and all of the income realized by Optionee may constitute
ordinary income. (Such a disqualifying sale is referred to
herein as a "Disqualifying Disposition".) Upon such a
Disqualifying Disposition, Optionee agrees to promptly notify the
Company in writing of the number of shares sold, the selling
price per share, and the date of the sale.
(b) Optionee also understands and acknowledges that
his or her exercise of this Option may generate federal
alternative minimum taxable income and a resulting federal tax
owed thereon.
(c) If the Option is not qualified, at the time it
becomes exercisable hereunder for the first time, as an Incentive
Stock Option because of the application of Internal Revenue Code
Section 422(d), then for purposes of calculating Optionee's
taxable income as of the Exercise Date, the fair market value of
the Stock will be based upon the closing price of Xxxxxxx'x Stock
on the Exercise Date, as published by the New York Stock Exchange
or the Wall Street Journal.
10. Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
11. Stock Reserve.
(a) The Company shall, at all times during the term of
this Agreement, reserve and keep available sufficient Stock to
satisfy the requirements of this Agreement.
(b) The Company will pay all fees and expenses
necessarily incurred by the Company in connection with the
exercise of the Option.
(c) Notwithstanding paragraph (b) above, Optionee will
pay all brokerage fees incurred by Optionee in the use of any of
the Exchange Shares as payment for the exercise of this Option.
12. Reservation of Right to Terminate Employment. NOTHING
CONTAINED IN THIS AGREEMENT RESTRICTS THE RIGHT OF THE COMPANY TO
TERMINATE THE EMPLOYMENT OF OPTIONEE AT ANY TIME WITH OR WITHOUT
CAUSE, OR TO REDUCE OPTIONEE'S COMPENSATION AT ANY TIME. The
parties acknowledge and agree that a termination of Optionee's
employment by the Company without cause will not be deemed in any
way to constitute a violation of any duty of good faith and fair
dealing owed by the Company to Optionee.
13. Parties Bound by Plan. Each determination,
interpretation, or other action taken by the Board of Directors
or the applicable Stock Option Committee pursuant to the
provisions of the Plan is final, binding, and conclusive for all
purposes of the Company and Optionee and their respective
successors in interest.
14. Conditional Exercise. If at any time the Board of
Directors of the Company determines that listing, additional
registration, or qualification of the shares of Stock upon any
securities exchange, or under any state or federal law is
necessary or desirable, this Option may not be exercised unless
and until such listing, registration, or qualification of the
shares has been effected upon conditions acceptable to the Board
of Directors of the Company.
15. Interpretation of Plan. Options granted pursuant to
the Plan are intended to be "Incentive Stock Options" within the
meaning of Section 422 of the Internal Revenue Code (the "Code"),
and the Applicable Plan and this Agreement shall be construed to
implement that interest. If all or any part of this Option shall
not be deemed an "Incentive Stock Option" within the meaning of
Section 422 of the Code, the Option shall nevertheless be valid
and carried into effect.
16. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Utah.
17. Place of Suit. Any action at law, suit in equity or
judicial proceeding for the enforcement of this contract or any
provision thereof shall be instituted only in state or federal
courts located in Salt Lake County, Utah. Optionee hereby
submits himself or herself to the jurisdiction of such courts
located in Salt Lake County.
18. Severability. If and to the extent that any court of
competent jurisdiction holds any provision or any part thereof of
this Agreement to be invalid or unenforceable, such holding shall
in no way affect the validity of the remainder of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
XXXXXXX MEDICAL PRODUCTS
By: Xxxx X. Xxxxxxx,
President
Optionee:
(Signature)
(Print name and address)
