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EXHIBIT 10.3
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated _______________, 19_, is made by and between
Toxi-Lab, Inc., a California corporation hereinafter referred to as "Company,"
and ________________________, an employee of the Company or a Subsidiary of the
Company, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $.01 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Stock Option Plan for
Employees of Toxi-Lab, Inc. (the terms of which are hereby incorporated by
reference and made a part of this Agreement); and
WHEREAS, the Stock Option Committee of the Company's Board of Directors
(hereinafter referred to as the "Committee"),, appointed to administer said
Plan, has determined that it would be to the advantage and best interest of the
company and its shareholders to grant the Incentive Stock Option provided for
herein to the Employee as an inducement to remain in the service of the Company,
its Parent Corporations or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option; and
WHEREAS, if the Employee is a Director or an Officer of the company, the
grant of said Option has been recommended by the Special Committee;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
Section 1.1 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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Section 1.2 - Company
"Company" shall mean Toxi-Lab, Inc. In addition, "Company" shall mean
any corporation assuming, or issuing a new incentive stock option in
substitution for, the Option in a transaction to which Section 425(a) of the
Code applies.
Section 1.3 - Option
"Option" shall mean the incentive stock option to purchase common stock
of the Company granted under this Agreement.
Section 1.4 - Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
Section 1.5 - Plan
"Plan" shall mean the Stock Option Plan for Employees of Toxi-Lab, Inc.
Section 1.6 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.7 - Securities Act
"Securities Act" shall mean the Securities Act of 1933,, as amended.
Section 1.8 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.9 - Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Employee and the Company, a Parent
Corporation or a Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death or retirement, but excluding any termination where there is a
simultaneous reemployment by the Company, a Parent Corporation or a Subsidiary.
The Committee, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge
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for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that a leave of
absence shall constitute a Termination of Employment if, and to the extent that,
such leave of absence interrupts employment for purposes of Section 422A(a)(2)
of the Code and the then applicable Regulations and Revenue Rulings under said
Section.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
For good and valuable consideration, on the date hereof the Company
irrevocably grants to the Employee the option to purchase any part or all of an
aggregate of shares of its $.01 par value Common Stock upon the terms and
conditions set forth in this Agreement.
Section 2.2 - Purchase Price
The purchase price of the shares of stock covered by the option shall be
$ per share without commission or other charge.
Section 2.3 - Employment by the Company
Nothing in this Agreement or in the Plan shall confer upon the Employee
any right to continue in the employ of the Company, any Parent Corporation or
any Subsidiary or shall interfere with or restrict in any way the rights of the
Company, its Parent corporations and its Subsidiaries, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Section 2.4 - Adjustments in Option
In the event that the outstanding shares of the stock subject to the
option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which the Option, or
portions thereof then unexercised, shall be exercisable, to the end that after
such event the Employee's proportionate interest shall be maintained as before
the occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the unexercised portion of the
Option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in the option price per share; provided, however, that each such adjustment
shall be made in such manner as not to constitute a "modification" within the
meaning of Section 425(h) (3) of the Code. Any such adjustment made by the
Committee
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shall be final and binding upon the Employee, the Company and all other
interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) Subject to Sections 3.5 and 5.6, the Option shall become
exercisable as described in Exhibit A, which shall provide that options shall
become exercisable at a minimum of 20% per year and shall be fully exercisable
no later then at the end of 5 years from the date the Option is granted.
(b) No portion of the Option which is unexercisable at
Termination of Employment shall thereafter become exercisable.
Section 3.2 - Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3 - Expiration of Option
The Option may not be exercised to any extent by anyone after the first
to occur of the following events:
(a) Except as required by Section 422A(c) (6) of the Code, the
expiration of ten (10) years from the date the option was granted; or
(b) The time of the Employee's Termination of Employment unless
such Termination of Employment results from his death, his retirement, his
disability (within the meaning of Section 22 (e) (3) of the Code) or his being
discharged not for good cause; or
(c) The expiration of three (3) months from the date of the
Employee's Termination of Employment by reason of his retirement or his being
discharged not f or good cause, unless the Employee dies within said three-month
period; or
(d) The expiration of one (1) year from the date of the
Employee's Termination of Employment by reason of his disability (within the
meaning of Section 22 (e) (3) of the Code); or
(e) The expiration of one (1) year from the date of the
Employee's death.
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Section 3.4 - Merger, Consolidation, Acquisition or Dissolution of the Company
In the event of the merger or consolidation of the Company with or into
another corporation, or the acquisition by another corporation or person of all
or substantially all of the Company's assets or eighty percent (80%) or more of
the Company's then outstanding voting stock, or the liquidation or dissolution
of the Company, either:
(a) The option shall be assumed or an equivalent option
substituted by any successor corporation to the Company. The Company undertakes
to make reasonable and adequate provision for such assumption or substitution of
the option upon or in connection with such merger, consolidation, acquisition,
liquidation or dissolution; or
(b) The Committee shall provide that the Option shall become
exercisable, for a minimum of thirty (30) days prior to such event, as to all
the shares covered hereby, notwithstanding that this Option may not yet have
become fully exercisable under Section 3.1(a), but subject to Section 3.5.
Section 3.5 - Special Tax Consequences
The Employee acknowledges that, to the extent that the aggregate, fair
market value of stock with respect to which "incentive stock options" (within
the meaning of Section 422A of the Code, but without regard to Section 422A(d)
of the Code), including the Option, are exercisable for the first time by the
Employee during any calendar year (under the Plan and all other incentive stock
option plans of the Company, any Subsidiary and any Parent Corporation) exceeds
$100,000, such options shall be treated as not qualifying under Section 422A of
the Code but rather shall be taxed as non-qualified options. The Employee
further acknowledges that the rule set forth in the preceding sentence shall be
applied by taking options into account in the order in which they were granted.
For purposes of these rules, the fair market value of stock shall be determined
as of the time the option with respect to such stock is granted.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Employee, only he may exercise the option or
any portion thereof. After the death of the Employee, any exercisable portion of
the option may, prior to the time when the option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Employee's will or under the then applicable laws
of descent and distribution.
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Section 4.2 - Partial Exercise
Any exercisable portion of the option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
ten (10) shares (or minimum installment set forth in Section 3.1, if a smaller
number of shares) and shall be for whole shares only.
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely
by delivery to the Secretary or his office of .all of the following prior to the
time when the option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by the Employee or the other person
then entitled to exercise the Option or portion, stating that the option or
portion is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the shares with
respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, Shares of any
class of the Company's stock owned by the Employee duly endorsed for transfer to
the Company with a fair market value (as determinable under Section 4.2 (b) of
the Plan) on the date of delivery equal to the aggregate purchase price of the
shares with respect to which such option or portion is exercised; or
(iii) A combination of the consideration provided in the
foregoing paragraphs (i) and (ii) and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on
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exercise of this option shall bear an appropriate legend referring to the
provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; (d) Full payment
to the Company (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the
Option; and
(e) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the Employee,
appropriate proof of the right of such person or persons to exercise the Option.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
Section 4.5 - Rights as Shareholder
The holder of the option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
Notwithstanding the foregoing provision, the company shall
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provide to the Employee, on an annual basis, such financial and other
information as it provides to its shareholders for so long as no part of the
Option has been exercised and the Option has not expired by its terms.
ARTICLE V
OTHER PROVISIONS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Employee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the option. In its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan and this
Agreement.
Section 5.2 - Option Not Transferable
Neither the option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Employee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Employee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this
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Section 5.4. Any notice shall be deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
Section 5.6 - Shareholder Approval
The Plan will be submitted for approval by the Company's
shareholders within twelve (12) months after the date the Plan was initially
adopted by the Board. This Option may not be exercised to any extent by anyone
prior to the time when the Plan is approved by the shareholders, and if such
approval has not been obtained by the end of said twelve-month period, this
Option shall thereupon be cancelled and become null and void.
Section 5.7 - Notification of Disposition
The Employee shall give prompt notice to the Company of any disposition
or other transfer of any shares of stock acquired under this Agreement if such
disposition or transfer is made (a) within two (2) years from the date of
granting the Option with respect to such shares or (b) within one (1) year after
the transfer of such shares to him. Such notice shall specify the date of such
disposition or other transfer and the amount realized, in cash, other property,
assumption of indebtedness or other consideration, by the Employee in such
disposition or other transfer.
Section 5.8 - Construction
This Agreement shall be administered, interpreted and enforced under the
laws of the State of California.
Section 5.9 - Company's Right to Repurchase Shares
Upon Termination of Employment, the Company shall have the option to
repurchase all (but not less than all) of the shares of stock which have been
purchased by the Employee pursuant to exercise of the option and which the
Employee then holds. The repurchase price payable by the Company if it exercises
its repurchase option shall be the fair market value of the shares (determined
pursuant to Section 4.2(b) of the Plan) on the date of the Termination of
Employment.
The Company's repurchase option shall be exercisable by giving written
notice (accompanied by payment for the shares) to the Employee within thirty
(30) calendar days after the Termination of Employment.
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Section 5.10 - Restrictions on Transfer of Shares
(a) There can be no valid transfer (as hereinafter defined) of
any shares of stock purchased on exercise of the option, or any interest in such
shares, by any holder of such shares or interests unless such transfer is solely
for cash consideration and is made in compliance with the following provisions:
(i) Before there can be a valid transfer of any shares or
any interest therein, the record holder of the shares to be transferred (the
"Offered Shares") shall give ,.written notice (by registered or certified mail)
to the Company. Such notice shall specify the identity of the proposed
transferee, the cash price offered for the offered Shares by the proposed
transferee and the other terms and conditions of the proposed transfer. The date
such notice is mailed shall be hereinafter referred to as the "notice date" and
the record holder of the Offered Shares shall be hereinafter referred to as the
"Offeror."
(ii) For a period of thirty (30) calendar days after the
notice date, the Company shall have the option to purchase all (but not less
than all) of the Offered Shares at the purchase price and on the terms set forth
in subsection (a)(iii) of this Section 5.10. This option shall be exercisable by
the company by mailing (by registered or certified mail) written notice of
exercise to the Offeror prior to the end of said thirty (30) days.
(iii) The price at which the Company may purchase the
Offered Shares pursuant to the exercise of such option shall be the cash price
offered for the Offered Shares by the proposed transferee (as set forth in the
notice required under subsection (a)(i) of this Section 5.10). The Company's
notice of exercise of such option shall be accompanied by full payment for the
offered Shares and, upon such payment by the Company, the Company shall acquire
full right, title and interest to all of the Offered Shares.
(iv) If, and only if, the option given pursuant to
subsection (a)(ii) of this Section 5.10 is not exercised, the transfer proposed
in the notice given pursuant to subsection (a)(i) of this Section 5.10 may take
place; provided, however, that such transfer must, in all respects, be exactly
as proposed in said notice except that such transfer may not take place either
before the tenth (10th) calendar day after the expiration of said thirty-day
option exercise period or after the ninetieth (90th) calendar day after the
expiration of said thirty-day option exercise period, and if such transfer has
not taken place prior to said ninetieth (90th) day, such transfer may not take
place without once again complying with subsection (a) of this Section 5.10.
(b) As used in this Section 5.10, the term "transfer" means any
sale, encumbrance, pledge, gift or other form of disposition or transfer of
shares of the Company's stock or any legal or equitable interest therein;
provided, however, that the term "transfer" does not include a transfer of such
shares or interests by will or by the applicable laws of descent and
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distribution or a gift of such shares if the donee agrees to be bound by the
provisions of this Section 5.10.
(c) None of the shares of the Company's stock purchased on
exercise of the option shall be transferred on the Company's books nor shall the
Company recognize any such transfer of any such shares or any interest therein
unless and until all applicable provisions of this Section 5.10 have been
complied with in all respects. The certificates of stock evidencing shares of
stock purchased on exercise of the Option shall bear an appropriate legend
referring to the transfer restrictions imposed by this Section 5.10 and to the
repurchase option provided for in Section 5.10.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
TOXI-LAB, INC.
By_________________________________
By_________________________________
___________________________________
Employee
___________________________________
___________________________________
Address
Employee's Taxpayer
Identification Number:
___________________________________
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Exhibit A
INCENTIVE STOCK OPTION AGREEMENT
OF _____________________________
1. The first installment shall consist of percent (_%) of the shares
covered by the Option and shall become exercisable on the first anniversary of
the date the Option is granted.
2. The second installment shall consist of _____________ percent (_%) of
the shares covered by the option and shall become exercisable on the second
anniversary of the date the option is granted.
3. The third installment shall consist of _______________ percent (_%)
of the shares covered by the option and shall become exercisable on the third
anniversary of the date the option is granted.
4. The fourth installment shall consist of ______________ percent (_%)
of the shares covered by the Option and shall become exercisable on the fourth
anniversary of the date the Option is granted.
5. The fifth installment shall consist of _______________ percent (_%)
of the shares covered by the Option and shall become exercisable on the fifth
anniversary of the date the Option is granted.
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SECOND AMENDMENT
TO
THE STOCK OPTION PLAN
FOR EMPLOYEES OF TOXI-LAB, INC.
Pursuant to Section 7.2 of The Stock Option Plan for Employees of
Toxi-Lab, Inc. (the "Plan"), the Plan may be amended at any time by the Board or
the Committee.
The Board of Directors, at their September 20, 1995, meeting approved
amending the name of the Plan to read as follows:
"The Stock Option Plan For Employees of Ansys, Inc."
Pursuant to Section 7.2 of The Stock Option Plan for Employees of Ansys,
Inc. (the "Plan"), the Plan may be amended to increase any limit imposed in
Section 2.1 of the Plan on the maximum number of shares of Common Stock which
may be issued on exercise of options by the Board of Directors or by the
Committee of Ansys, Inc. (formerly Toxi-Lab, Inc.) (the "Company"), with
approval of the Company's shareholders.
The Committee of the Company, at its September 20, 1995 meeting, and a
majority of the Shareholders of the Company, by written consent dated September
20, 1995, approved amending Section 2.1 of Article II of the plan to read in its
entirety as follows:
"Section 2.1 - Shares Subject to Plan
The Shares of stock subject to Options shall be shares of the Company's
$.01 par value Common Stock. Subject to Section 3.3(d),the aggregate number of
such Shares which may be issued upon exercise of Options shall not exceed
650,000."
I hereby certify that the Amendment changing the name of the plan to The
Stock Option Plan for Employees of Ansys, Inc. was adopted by the Board of
Directors on September 20, 1995.
I hereby certify that Section 2.1 of the Plan was also duly approved by
the Committee and shareholders of the Company on September 20, 1995.
Executed at Irvine, California on the _____ day of _________________,
1995.
___________________________________
Xxxxxxx Xxxxxxxxxx, Secretary
