INCENTIVE STOCK OPTION AGREEMENT ANALYSTS INTERNATIONAL CORP.
EXHIBIT
10.2
2004
EQUITY INCENTIVE PLAN
THIS
AGREEMENT, made effective as of this 1st day of
November,
2007, by and between Analysts International Corp., a Minnesota corporation
(the
“Company”), and Xxxxx Xxxxxxx (“Participant”).
W
I T N E
S S E T H:
WHEREAS,
Participant on the date hereof
is a key employee or officer of the Company or one of its Subsidiaries;
and
WHEREAS,
the Company wishes to grant an
incentive stock option to Participant to purchase shares of the Company’s Common
Stock pursuant to the Company’s 2004 Equity Incentive Plan (the “Plan”);
and
WHEREAS,
the Administrator has
authorized the grant of an incentive stock option to Participant and has
determined that, as of the effective date of this Agreement, the fair market
value of the Company’s Common Stock is $1.65 per share;
NOW,
THEREFORE, in consideration of the
premises and of the mutual covenants herein contained, the parties hereto
agree
as follows:
1. Grant
of Option. The Company hereby grants to Participant on
the date set forth above (the “Date of Grant”), the right and option (the
“Option”) to purchase all or portions of an aggregate of two hundred forty-two
thousand four hundred twenty-four (242,424) shares of Common Stock at a per
share price of $1.65 on the terms and conditions set forth herein, and subject
to adjustment pursuant to Section 12 of the Plan. This Option is
intended to be an incentive stock option within the meaning of Section 422,
or
any successor provision, of the Internal Revenue Code of 1986, as amended
(the
“Code”), and the regulations thereunder, to the extent permitted under Code
Section 422(d).
2. Duration
and Exercisability.
a. General. The
term during which this Option may be exercised shall terminate on the close
of
business on November 1, 1007, except as otherwise provided
in Paragraphs 2(b) through 2(d) below. This Option shall become
exercisable according to the following schedule:
1
|
Vesting
Date
|
Number
of Shares/Percentage
|
|
Date
of Grant
|
25%
|
|
First
Anniversary of Date of Grant
|
50%
|
|
Second
Anniversary of Date of Grant
|
75%
|
|
Third
Anniversary of Date of Grant
|
100%
|
In
the
event of a Change of Control (as defined in Exhibit A to Participant’s
employment agreement) on or after May 1, 2009, the Option shall vest immediately
and be fully exercisable
Once
the
Option becomes exercisable to the extent of one hundred percent (100%) of
the
aggregate number of shares specified in Paragraph 1, Participant may continue
to
exercise this Option under the terms and conditions of this Agreement until
the
termination of the Option as provided herein. If Participant does not
purchase upon an exercise of this Option the full number of shares which
Participant is then entitled to purchase, Participant may purchase upon any
subsequent exercise prior to this Option’s termination such previously
unpurchased shares in addition to those Participant is otherwise entitled
to
purchase.
b. Termination
of Employment (other than Disability or Death). If
Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than disability or death, this Option shall completely
terminate on the earlier of (i) the close of business on the three-month
anniversary date of such termination of employment, and (ii) the
expiration date of this Option stated in Paragraph 2(a) above. In
such period following the termination of Participant’s employment, this Option
shall be exercisable only to the extent the Option was exercisable on the
vesting date immediately preceding such termination of employment, but had
not
previously been exercised. To the extent this Option was not
exercisable upon such termination of employment, or if
Participant does not exercise the Option within the time specified in
this Paragraph 2(b), all rights of Participant under this Option shall be
forfeited.
c. Disability. If
Participant’s employment terminates because of disability (as defined in Code
Section 22(e), or any successor provision), this Option shall terminate on
the
earlier of (i) the close of business on the twelve-month anniversary
date of the such termination of employment, and (ii) the expiration
date of this Option stated in Paragraph 2(a) above. In such period following
the
termination of Participant’s employment, this Option shall be exercisable only
to the extent the Option was exercisable on the vesting date immediately
preceding such termination of employment, but had not previously been
exercised. To the extent this Option was not exercisable upon such
termination of employment, or if Participant does not exercise the Option
within
the time specified in this Paragraph 2(c), all rights of Participant under
this
Option shall be forfeited.
d. Death. In
the event of Participant’s death, this Option shall terminate on the earlier of
(i) the close of business on the twelve-month anniversary date
of the date of Participant’s death, and (ii) the expiration date of
this Option stated in Paragraph 2(a) above. In such period following
Participant’s death, this Option shall be exercisable by the person or persons
to whom Participant’s rights under this Option shall have passed by
Participant’s will or by the laws of descent and distribution only to the extent
the Option was exercisable on the vesting date immediately preceding the
date of
Participant’s death. To the extent this Option was not exercisable upon the date
of Participant’s death, or if such person or persons do not exercise this Option
within the time specified in this Paragraph 2(d), all rights under this Option
shall be forfeited.
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3. Manner
of Exercise.
a. General. The
Option may be exercised only by Participant (or other proper party in the
event
of death or incapacity), subject to the conditions of the Plan and subject
to
such other administrative rules as the Board may deem advisable, by delivering
within the Option Period written notice of exercise to the Company at its
principal office. The notice shall state the number of shares as to which
the
Option is being exercised and shall be accompanied by payment in full of
the
Option price for all shares designated in the notice. The exercise of
the Option shall be deemed effective upon receipt of such notice by the Company
and upon payment that complies with the terms of the Plan and this
Agreement. The Option may be exercised with respect to any number or
all of the shares as to which it can then be exercised and, if partially
exercised, may be so exercised as to the unexercised shares any number of
times
during the Option period as provided herein.
b. Form
of Payment. Subject to approval by the Administrator,
payment of the option price by Participant shall be in the form of cash,
personal check, certified check or previously acquired shares of Common Stock
of
the Company, or any combination thereof. Any stock so tendered as
part of such payment shall be valued at its Fair Market Value as provided
in the
Plan. For purposes of this Agreement, “previously acquired shares of
Common Stock” shall include shares of Common Stock that are already owned by
Participant at the time of exercise.
c. Stock
Transfer Records. As soon as practicable after the
effective exercise of all or any part of the Option, Participant shall be
recorded on the stock transfer books of the Company as the owner of the shares
purchased, and the Company shall deliver to Participant one or more duly
issued
stock certificates evidencing such ownership. All requisite original
issue or transfer documentary stamp taxes shall be paid by the
Company.
4. Miscellaneous.
a. Employment;
Rights as Shareholder. This Agreement shall not confer
on Participant any right with respect to continuance of employment by the
Company or any of its Subsidiaries, nor will it interfere in any way with
the
right of the Company to terminate such employment. Participant shall
have no rights as a shareholder with respect to shares subject to this Option
until such shares have been issued to Participant upon exercise of this
Option. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions
or
other rights for which the record date is prior to the date such shares are
issued, except as provided in Section 12 of the Plan.
b. Securities
Law Compliance. The exercise of all or any parts of this
Option shall only be effective at such time as counsel to the Company shall
have
determined that the issuance and delivery of Common Stock pursuant to such
exercise will not violate any state or federal securities or other
laws. Participant may be required by the Company, as a condition of
the effectiveness of any exercise of this Option, to agree in writing that
all
Common Stock to be acquired pursuant to such exercise shall be held, until
such
time that such Common Stock is registered and freely tradable under applicable
state and federal securities laws, for Participant’s own account without a view
to any further distribution thereof, that the certificates for such shares
shall
bear an appropriate legend to that effect and that such shares will be not
transferred or disposed of except in compliance with applicable state and
federal securities laws.
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c. Mergers,
Recapitalizations, Stock Splits, Etc. Pursuant and
subject to Section 12 of the Plan, certain changes in the number or character
of
the Common Stock of the Company (through sale, merger, consolidation, exchange,
reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result
in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights
with respect to any unexercised portion of the Option (i.e., Participant
shall have such “anti-dilution” rights under the Option with respect to such
events, but shall not have “preemptive” rights).
d. Shares
Reserved. The Company shall at all times during the
option period reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.
e. Withholding
Taxes on Disqualifying Disposition. In the event of
a
disqualifying
disposition of the shares acquired through the exercise of this Option,
Participant hereby agrees to inform the Company of such
disposition. Upon notice of a disqualifying disposition, the Company
may take such action as it deems appropriate to insure that, if necessary
to
comply with all applicable federal or state income tax laws or regulations,
all
applicable federal and state payroll, income or other taxes are withheld
from
any amounts payable by the Company to Participant. If the Company is
unable to withhold such federal and state taxes, for whatever reason,
Participant hereby agrees to pay to the Company an amount equal to the amount
the Company would otherwise be required to withhold under federal or state
law. Participant may, subject to the approval and discretion of the
Board or such administrative rules it may deem advisable, elect to have all
or a
portion of such tax withholding obligations satisfied by delivering shares
of
the Company’s Common Stock or by electing to have the Company withhold shares of
Common Stock otherwise issuable to Participant. Such shares shall
have a Fair Market Value equal to the minimum required tax withholding, based
on
the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from the disqualifying disposition of the shares acquired through
the
exercise of this Option. In no event may the Company withhold shares
having a Fair Market Value in excess of such statutory minimum required tax
withholding.
f. Nontransferability. During
the lifetime of Participant, the accrued Option shall be exercisable only
by
Participant or by the Participant’s guardian or other legal representative, and
shall not be assignable or transferable by Participant, in whole or in part,
other than by will or by the laws of descent and distribution.
g. 2004
Equity Incentive Plan. The Option evidenced by this
Agreement is granted pursuant to the Plan, a copy of which Plan has been
made
available to Participant and is hereby incorporated into this
Agreement. This Agreement is subject to and in all respects limited
and conditioned as provided in the Plan. The Plan governs this Option
and, in the event of any questions as to the construction of this
Agreement or in the event of a conflict between the Plan and this Agreement,
the
Plan shall govern, except as the Plan otherwise provides.
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h. Lockup
Period Limitation. Participant agrees that in the event
the Company advises Participant that it plans an underwritten public offering
of
its Common Stock in compliance with the Securities Act of 1933, as amended,
and
that the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy
or
otherwise dispose of part or all of their stock purchase rights of the
underlying Common Stock, Participant hereby agrees that for a period not
to
exceed 180 days from the prospectus, Participant will not sell or contract
to
sell or grant an option to buy or otherwise dispose of this option or any
of the
underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).
i. Blue
Sky Limitation. Notwithstanding anything in this
Agreement to the contrary, in the event the Company makes any public offering
of
its securities and determines in its sole discretion that it is necessary
to
reduce the number of issued but unexercised stock purchase rights so as to
comply with any state securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to
accelerate the exercisability of this Option and the date on which this Option
must be exercised, provided that the Company gives Participant 15 days’ prior
written notice of such acceleration, and (ii) to cancel any portion of this
Option or any other option granted to Participant pursuant to the Plan which
is
not exercised prior to or contemporaneously with such public
offering. Notice shall be deemed given when delivered personally or
when deposited in the United States mail, first class postage prepaid and
addressed to Participant at the address of Participant on file with the
Company.
j. Accounting
Compliance. Participant agrees that, if a merger,
reorganization, liquidation or other “transaction” as defined in Section 12 of
the Plan occurs and Participant is an “affiliate” of the Company or any
Subsidiary (as defined in applicable legal and accounting principles) at
the
time of such transaction, Participant will comply with all requirements of
Rule
145 of the Securities Act of 1933, as amended, and the requirements of such
other legal or accounting principles, and will execute any documents necessary
to ensure such compliance.
k. Stock
Legend. The Board may require that the certificates for
any shares of Common Stock purchased by Participant (or, in the case of death,
Participant’s successors) shall bear an appropriate legend to reflect the
restrictions of Paragraph 4(b) and Paragraphs 4(h) through 4(j) of this
Agreement.
l. Scope
of Agreement. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and Participant and
any
successor or successors of Participant permitted by Paragraph 2 or Paragraph
4(f) above.
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m. Arbitration. Any
dispute arising out of or relating to this Agreement or the alleged breach
of
it, or the making of this Agreement, including claims of fraud in the
inducement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy. If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be a retired state or federal judge or
an attorney who has practiced securities or business litigation for at least
10
years. If the parties cannot agree on an arbitrator within 20 days,
any party may request that the chief judge of the District Court for Hennepin
County, Minnesota, select an arbitrator. Arbitration will be
conducted pursuant to the provisions of this Agreement, and the commercial
arbitration rules of the American Arbitration Association, unless such rules
are
inconsistent with the provisions of this Agreement. Limited civil
discovery shall be permitted for the production of documents and taking of
depositions. Unresolved discovery disputes may be brought to the
attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a
court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. The arbitrator may award to
the prevailing party, if any, as determined by the arbitrator, all of its
costs
and fees, including the arbitrator’s fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys’ fees. Unless
otherwise agreed by the parties, the place of any arbitration proceedings
shall
be Hennepin County, Minnesota.
IN
WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed on the day and year first above
written.
|
ANALYSTS
INTERNATIONAL CORPORATION
|
|
|
By
|
_______________________________________ |
|
Its
|
_______________________________________ |
| _______________________________________ | |
|
Participant
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