Exhibit 4.3
XXXXXXXXX COMMUNICATIONS, INC.
QUALIFIED STOCK OPTION AGREEMENT
This Stock Option Agreement is made this _____ day of __________, ____
between Xxxxxxxxx Communications, Inc. (the "Company"), and the Employee,
_____________________ (the "Option Holder").
R E C I T A L S
A. The Board of Directors, on January 6, 1999, adopted, to be approved by
the shareholders of the Company, the 1999 Stock Incentive Plan, as amended (the
"Plan"), for the granting to selected executives, directors and key employees of
the Company and its subsidiaries of options to purchase shares of the Common
Stock of the Company.
B. Pursuant to the Plan, the Company has determined that it is to the
advantage and best interest of the Company and its shareholders to grant an
option to the Option Holder covering shares of the Company's Common Stock as an
inducement to remain in the service of the Company and as an incentive for
increased effort during such service, and has approved the execution of this
Stock Option Agreement between the Company and the Option Holder.
C. The option granted hereby is intended to qualify as an "incentive stock
option," in regard to Employees, under Section 422A of the Internal Revenue Code
of 1954, as amended.
NOW THEREFORE, the parties hereto agree as follows:
1. The Company grants to the Option Holder the right and option to purchase
on the terms and conditions hereinafter set forth, all or any part of an
aggregate of ______________ shares of the Common Stock of the Company at the
purchase price of $____ per share, which was determined to be 100% of the Fair
Market Value of the stock, having an "Effective Date" of the ____ day of
_________, ____, and exercisable from time to time in accordance with the
provisions of this Agreement during a period expiring on the tenth anniversary
of the Effective Date of this Agreement (the "Expiration Date").
2. The Option Holder may not purchase any shares by exercise of this Option
between the Effective Date of this Agreement and the first anniversary date
thereof. Thereafter, shares may be purchased by exercise of this Option on or
after the respective anniversary of the Effective Date in the amounts indicated
as follows:
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Cumulative
Anniversary Percentage Percentage
Date Exercisable Exercisable
---- ----------- -----------
1st 33 1/3% 33 1/3%
2nd 33 1/3% 66 2/3%
3rd 33 1/3% 100%
At any time after the third such anniversary date of this Agreement, but no
later than the Expiration Date, the Option Holder may purchase all or any part
of the shares subject to this Option which the Option Holder theretofore has not
exercised. In each case the number of shares which may be purchased shall be
calculated to the nearest full share and shall not be for fewer than 100 shares.
The foregoing limitations shall similarly apply to the transferees of the Option
Holder by will or by the laws of descent or distribution, so that said
transferees shall be entitled (provided they act within twelve (12) months after
the death of the Option Holder but in no event later than the Expiration Date)
to purchase by exercise of this Option all or any portion of the shares subject
to this Option which the Option Holder could have purchased by the exercise of
the option at the time of the Option Holder's death but with respect to which
this Option was not previously exercised, and no more. This Option may be
exercised during the lifetime of the Option Holder only by the Option Holder, or
within twelve (12) months after his death by his transferees by will or the laws
of the descent or distribution, and not otherwise, regardless of any community
property interest therein of the spouse of the Option Holder, or such spouse's
successors in interest. If the spouse of the Option Holder shall have acquired a
community property interest in this Option, the Option Holder, or Option
Holder's permitted successors in interest, may exercise the option on behalf of
the spouse of the Option Holder or such spouse's successors in interest.
3. Each exercise of this Option shall be by means of a written notice of
exercise delivered to the Secretary of the Company, specifying the number of
shares to be purchased and accompanied by payment to the Company of the full
purchase price of the shares to be purchased payable in cash or certified or
cashier's check payable to the order of the company. Alternative payments may be
made only upon specific approval of the Board of Directors as specified in the
Plan.
Subject to approval of the Board of Directors, an employee may pay for any
shares of Common Stock with respect to which an Option has been exercised by
tendering to the Company other shares of Common Stock at the time of the
exercise of such Option, provided, however, that at the time of such exercise,
the Company shall have a Committee consisting of two (2) or more disinterested
directors who shall approve the payment for option shares with other shares. The
certificates representing such other shares of Common Stock must be accompanied
by stock power duly executed with signature guaranteed. The value of Common
Stock must be accompanied by a stock power duly executed with signature
guaranteed . The value of Common Stock so tendered shall be determined by the
committee in its sole discretion. The Committee may, in its sole and absolute
discretion, refuse any tender of shares of Common Stock in which case it shall
deliver the tendered shares of Common Stock back to the employee and notify the
employee of such refusal.
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4. The fair market value of a share of Common Stock shall be determined for
purposes of this Agreement by reference to the most recent sale price of the
Company's Common Stock and such other factors as the Board of Directors of the
Committee may deem appropriate to reflect the then fair market thereof, unless
such shares are publicly traded on a stock exchange or otherwise, in which case
such value shall be determined by reference to the closing price of such share
on the principal stock exchange on which such shares are traded, or, if such
shares are not then traded on a principal stock exchange, the mean between the
bid and asked price of a share as supplied by the National Association of
Securities Dealers through NASDAQ (or its successor in function), in each case
as reported by The Wall Street Journal, for the business day immediately
preceding the date on which the option is exercised.
5. The Option granted hereby and all rights hereunder, to the extent such
rights shall not have been exercised, shall terminate and become null and void
if the Option Holder ceases for any reason whatsoever to be an employee of the
Company or of a subsidiary corporation (as defined in Section 425(f) of the
Internal Revenue Code of 1954, as amended) excepting only that (i) in the event
that such cessation of his employment shall be due to Option Holder's voluntary
resignation with the consent of the Board of Directors of the Company or such
subsidiary, expressed in the form of a resolution, or to the retirement of the
Option Holder under the provisions of any Pension or Retirement Plan of the
Company or of such subsidiary then in effect, the Option Holder may at any time
within a period of three (3) months after the date he so ceases to be an
employee of any such corporation, and not thereafter, exercise the option
granted hereby to the extent such option was exercisable by him on the date of
such cessation of such employment, and (ii) in the event of the death or
permanent disability (as defined in Section 105(d) (4) of the Code) of the
Option Holder while in the employ of the company or of such subsidiary, the
option granted hereby may be exercised within twelve (12) months after the date
of such death or permanent disability to the extent that the Option Holder was
entitled to exercise such option on the date of such death or permanent
disability. During the period after death, the Option may, to the extent that it
remained unexercised be exercised by the person or persons to whom the Option
Holder's rights under the option granted hereby shall pass by any reason of the
death of the Option Holder, whether by will or by the applicable laws of descent
and distribution; provided, however, that in no event may the option granted
hereby be exercised to any extent by anyone after the expiration date specified
in paragraph 1 above. The employment of the Option Holder shall be deemed to
continue during any leave of absence which has been authorized by the Company,
provided that no exercise of this option may take place during any such
authorized leave of absence excepting only during the first three (3) months
thereof.
6. No shares issuable upon the exercise of this Option shall be issued and
delivered unless and until there shall have been full compliance with all
applicable registration requirements of the Securities Act of 1933, as amended,
all applicable listing requirements of any national securities exchange on which
shares of the same class are then listed and any other requirements of law or of
any regulatory bodies having jurisdiction over such issuance and delivery.
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Without limiting the foregoing, the undersigned hereby agrees that unless
and until the shares of stock covered by the Plan have been registered with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
he will purchase all shares of stock to be issued upon exercise of this option
for investment and not for resale or for distribution and that upon each
exercise of any portion of this option the person entitled to exercise the same
shall, upon the request of the Company, furnish evidence satisfactory to the
Company (including a written and signed representation) to that effect in form
and substance satisfactory to the Company, including an indemnification of the
Company in the event of any violation of the Securities Act of 1933, as amended,
by such person. Furthermore, the Company may, if it deems appropriate, affix a
legend to certificates representing shares of stock purchased upon exercise of
options indicating that such shares have not been registered with the Securities
and Exchange Commission and may so notify its Transfer Agent, and may take such
other action as it deems necessary or advisable to comply with any other
regulatory or governmental requirements.
7. If Option Holder or Option Holder's permitted successors in interest
disposes of shares of Common Stock acquired pursuant to the exercise of this
Option, the Company shall have the right to require Option Holder or Option
Holder's permitted successor in interest to pay the Company the amount of any
taxes, which the Company may be required to withhold with respect to such
shares.
8. This Option and the rights and privileges granted hereby shall not be
transferred, assigned, pledged or hypothecated in any way, whether by operation
of the law or otherwise, except by will or the laws of descent and distribution.
Upon any attempt so to transfer, assign, pledge, hypothecate or otherwise
dispose of this option or any right or privileges granted hereby contrary to the
provisions hereof, this Option and all rights and privileges contained herein
shall immediately become null and void and of no further force or effect.
9. If the outstanding shares of the Common Stock of the Company are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment (to be conclusively determined by the
Board of Directors of the Company) shall be made in the number and kind of
securities receivable upon the exercise of this Option, without change in the
total price applicable to the unexercised portion of this Option but with a
corresponding adjustment in the price for each unit of any security covered by
this Option.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon the sale of substantially all the property or more than 80% of the then
outstanding stock of the Company to another corporation, this Option shall
terminate, unless express written provision be made in connection with such
transaction for (i) the immediate exercisability of this Option, (ii) the
assumption of this Option or the substitution therefor of a new option covering
the stock of a successor employer corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to number and kind of shares and
prices, such adjustments to be conclusively determined by the Board of Directors
of the Company; or (iii) the continuance of the Plan by such successor
corporation in which event this Option shall remain in full effect under the
terms so provided.
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Adjustments under this paragraph 9 shall be made by the Board of Directors,
whose determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive. No fractional shares of stock
shall be issued under the Plan on any such adjustment.
10. Nothing herein contained shall affect the right of the Option Holder to
participate in and receive benefits under and in accordance with the then
current provisions of any pension, insurance profit sharing or other employee
welfare plan or program of the Company or of any subsidiary of the Company.
11. Neither the Option Holder nor any other person legally entitled to
exercise this option shall be entitled to any of the rights or privileges of a
shareholder of the Company in respect of any shares issuable upon any exercise
of this option unless and until a certificate or certificates representing such
shares shall have been actually issued and delivered to him.
12. The Option hereby granted is subject to, and the Company and the Option
holder agrees to be bound by, all of the terms and conditions of the Company's
1990 Stock Incentive Plan, as the same shall be amended from time to time in
accordance with the terms thereof, but no such amendment shall adversely affect
the Option Holder's rights under this option without the prior written consent
of Option Holder.
13. This option has been executed and delivered the day and year first
above-written at Costa Mesa, California, and the interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California.
XXXXXXXXX COMMUNICATIONS, INC.
By: ______________________________
Xxxx Xxxxxxxxx
President
______________________________
______________________________
Option Holder
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