INCENTIVE STOCK OPTION AGREEMENT
CIPRICO INC.
1999 AMENDED AND RESTATED STOCK OPTION PLAN
THIS AGREEMENT, made effective as of this ____ day of _____________,
______, by and between Ciprico Inc., a Delaware corporation (the "Company"), and
____________________ ("Optionee").
W I T N E S S E T H:
WHEREAS, Optionee on the date hereof is an employee or officer of the
Company or one of its Subsidiaries; and
WHEREAS, the Company wishes to grant an incentive stock option to
Optionee to purchase shares of the Company's Common Stock pursuant to the
Company's 1999 Amended and Restated Stock Option Plan (the "Plan"); and
WHEREAS, the Administrator of the Plan has authorized the grant of an
incentive stock option to Optionee and has determined that, as of the effective
date of this Agreement, the fair market value of the Company's Common Stock is
$_______ 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 Optionee 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 _________________ shares of Common
Stock at a per share price of $________ on the terms and conditions set forth
herein, and subject to adjustment pursuant to Section 12 of the Plan. Except as
otherwise provided in Paragraphs 2(b) and 2(c), 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.
2. Duration and Exercisability.
a. The term during which this Option may be exercised shall
terminate on ____________, ______, except as otherwise provided in Paragraphs
2(b) through 2(e) below. This Option shall become exercisable according to the
following schedule:
Number of Shares Date Exercisable
Once the Option becomes exercisable to the extent of one hundred percent (100%)
of the aggregate number of shares specified in Paragraph 1, Optionee may
continue to exercise this Option under the terms and conditions of this
Agreement until the termination of the Option as provided herein. If Optionee
does not purchase upon an exercise of this Option the full number of shares
which Optionee is then entitled to purchase, Optionee may purchase upon any
subsequent exercise prior to this Option's termination such previously
unpurchased shares in addition to those Optionee is otherwise entitled to
purchase.
b. Termination of Employment (other than Change of Control,
Disability or Death). If Optionee's employment with the Company or any
Subsidiary is terminated for any reason other than because of a "change of
control transaction" as described in Paragraph 2(c) or because of 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 above.
Notwithstanding the foregoing, if, upon such termination of employment, Optionee
continues to serve as a consultant, advisor or nonemployee director of the
Company or Subsidiary, this Option shall terminate on the earlier of (i) the
close of business on the three-month anniversary date of the termination of all
of Optionee's relationships with the Company or Subsidiary, and (ii) the
expiration date of this Option stated in Paragraph 2(a) above, and the Option
shall not, upon Optionee's termination of employment, be treated as an incentive
stock option within the meaning of Code Section 422.
In such period following the termination of Optionee's
employment or, if applicable, such other relationship, this Option shall
be exercisable only to the extent the Option was exercisable on the vesting
date immediately preceding such termination of employment or such other
relationship, but had not previously been exercised. To the extent this Option
was not exercisable upon such termination of employment or such other
relationship, or if Optionee does not exercise the Option within the time
specified in this Paragraph 2(b), all rights of Optionee under this Option
shall be forfeited.
c. Change of Control. Except to the extent and as provided
below with respect to termination of employment of an affiliate in connection
with a transaction accounted for as a pooling of interests, in the event of the
sale of substantially all of the assets of the Company or change in control
transaction, the Company through its board of directors as more fully set forth
in Section 11 of the Plan, may provide in its discretion for the acceleration,
termination, exchange or continuation of this Option.
If (i) Optionee's employment with the Company or any
Subsidiary is terminated because of a "change of control transaction,"
(ii) such transaction is treated as a "pooling of interests" under generally
accepted accounting principles, and (iii) Optionee is an "affiliate" of the
Company or Subsidiary under applicable legal and accounting principles, this
Option shall completely terminate on the later of (A) the close of business
on the three-month anniversary date of such termination of employment or
(B) the close of business on the date that is sixty (60) days after the
date on which affiliates are no longer restricted from selling, transferring
or otherwise disposing of the shares of stock received in the change of
control transaction. Notwithstanding the foregoing, if, upon such termination
of employment, Optionee continues to serve as a consultant, advisor or
nonemployee director of the Company or Subsidiary, this Option shall terminate
on the later of (X) the close of business on the three-month anniversary date
of the termination of all of Optionee's relationships with the Company or
Subsidiary, and (Y) the close of business on the date that is sixty (60)
days after the date on which affiliates are no longer restricted from selling,
transferring or otherwise disposing of the shares of stock received in the
change of control transaction, and this Option shall not, upon Optionee's
termination of employment, be treated as an incentive stock option within the
meaning of Code Section 422.
In such period following the termination of Optionee's
employment or, if applicable, such other relationship, this Option shall
be exercisable only to the extent the Option was exercisable on the vesting
date immediately preceding such termination of employment or such other
relationship, but had not previously been exercised, unless the exercisability
of this Option has been accelerated as provided in Section 11 of the Plan.
To the extent this Option was not exercisable upon such termination of
employment or such other relationship, or if Optionee does not exercise the
Option within the time specified in this Paragraph 2(c), all rights of
Optionee under this Option shall be forfeited. If Optionee exercises this
Option on a date that is after the three-month anniversary of the termination of
Optionee's employment or on a date that is more than ten years (or five years,
if applicable) after the Date of Grant, this Option shall not be treated as an
incentive stock option within the meaning of Code Section 422.
For purposes of this Paragraph 2(c), a "change of control
transaction" means an acquisition of the Company through the sale of
substantially all of the Company's assets and the consequent discontinuance
of its business or through a merger, consolidation, exchange, reorganization,
reclassification, extraordinary dividend, divestiture (including a spin-off)
or liquidation of the Company.
d. Disability. If Optionee ceases to be an employee of the
Company or any Subsidiary due to disability (as such term is defined in Code
Section 22(e)(3), or any successor provision), this Option shall completely
terminate on the earlier of (i) the close of business on the six-month
anniversary date of such termination of employment, and (ii) the expiration date
under this Option stated in Paragraph 2(a) above. In such period following such
termination of employment, this Option shall be exercisable only to the extent
the Option was exercisable on the vesting date immediately preceding the date of
Optionee's termination of employment. If Optionee does not exercise the Option
within the time specified in this Paragraph 2(d), all rights of Optionee under
this Option shall be forfeited.
e. Death. In the event of Optionee'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 Optionee's death, and (ii) the expiration date
of this Option stated in Paragraph 2(a) above. In such period following
Optionee's death, this Option shall be exercisable by the person or persons to
whom Optionee's rights under this Option shall have passed by Optionee'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 Optionee's
death. If such person or persons do not exercise this Option within the time
specified in this Paragraph 2(e), all rights under this Option shall be
forfeited.
3. Manner of Exercise.
a. General. The Option may be exercised only by Optionee (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
Administrator 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 Optionee 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 Optionee 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, Optionee shall be recorded
on the stock transfer books of the Company as the owner of the shares purchased,
and the Company shall deliver to Optionee 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 Optionee 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. Optionee shall have no rights
as a shareholder with respect to shares subject to this Option until such shares
have been issued to Optionee 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.
Optionee 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 Optionee'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.
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 Optionee's rights with
respect to any unexercised portion of the Option (i.e., Optionee 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, Optionee 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 Optionee. If the Company is unable to withhold such
federal and state taxes, for whatever reason, Optionee 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. Optionee may, subject to the
approval and discretion of the Administrator 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 having
a fair market value equal to such obligations.
f. Nontransferability. During the lifetime of Optionee, the
accrued Option shall be exercisable only by Optionee or by the Optionee's
guardian or other legal representative, and shall not be assignable or
transferable by Optionee, in whole or in part, other than by will or by the laws
of descent and distribution.
g. 1999 Amended and Restated Stock Option Plan. The Option
evidenced by this Agreement is granted pursuant to the Plan, a copy of which
Plan has been made available to Optionee 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.
h. Accounting Compliance. Optionee agrees that, in the event a
"change of control transaction" (as defined in Paragraph 2(c) above) is treated
as a "pooling of interests" under generally accepted accounting principles and
Optionee is an "affiliate" of the Company or any Subsidiary (as defined in
applicable legal and accounting principles) at the time of such change of
control transaction, Optionee 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.
i. Scope of Agreement. This Agreement shall bind and inure to
the benefit of the Company and its successors and assigns and Optionee and any
successor or successors of Optionee permitted by Paragraph 4(f) above.
j. 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 and without submitting the dispute to such Association.
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.
CIPRICO INC.
By:________________________________
Its:_____________________________
___________________________________
Optionee
