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EXHIBIT 4.2
OROAMERICA, INC.
INCENTIVE STOCK OPTION AGREEMENT
(1998 INCENTIVE STOCK OPTION PLAN)
This Incentive Stock Option Agreement (the "Agreement") is made and
entered into as of ______________ (hereinafter referred to as the "Date of
Grant"), by and between OROAMERICA, INC., a Delaware corporation (the
"Company"), and ___________________ ("Optionee"),with reference to the following
facts:
A. The Company has duly adopted a 1998 Incentive Stock Option Plan
(hereinafter referred to as the "Plan") which authorizes the Compensation
Committee of the Board of Directors (hereinafter referred to as the "Committee")
to grant non-statutory stock options or incentive stock options, within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and which is intended to encourage ownership of stock of the Company by
officers and other key management employees and to provide additional incentive
for them to promote the success of the Company.
B. The Committee, which is charged with responsibility for
administering the Plan, has determined that Optionee is entitled to participate
in the Plan, and has taken appropriate action to authorize the granting of a
stock option, which shall be an incentive stock option except as otherwise
provided herein, to Optionee for the number of shares, at the price per share
and on the terms set forth in this Agreement.
C. Optionee desires to participate in the Plan and to receive an
option on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Grant of Option
The Company hereby grants to Optionee the right and option
(hereinafter referred to as the "Option") to purchase from time to time all or
any part of an aggregate of _____________ shares (the "Option Shares") of the
common stock, $.001 par value, of the Company ("Common Stock") on the terms and
conditions set forth in this Agreement. The Option shall be an incentive stock
option, provided, however, that, to the extent that the aggregate fair market
value of Common Stock (including the Option Shares and the Common Stock issuable
upon exercise of all other incentive stock options granted to Optionee under the
Plan and under all other plans of the Company under which incentive stock
options may be issued) with respect to which incentive stock options (determined
without regard to this sentence) first become exercisable by Optionee during any
calendar year exceeds the maximum amount permitted under Section 422 of the Code
(currently $100,000.00), such options shall be treated as non-statutory stock
options. The preceding sentence shall be applied taking options into account in
the order in which they were granted. For purposes of this paragraph, the fair
market value of Common Stock shall be determined as of the time the option with
respect to such Common Stock was granted.
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2. Purchase Price
The purchase price (the "Exercise Price") of each Option
Share shall be $____.
3. Option Period
The Option shall commence on the Date of Grant and shall
expire, and all rights to purchase the Option Shares shall terminate, at the
close of business on the day immediately preceding the tenth anniversary of the
Date of Grant, unless terminated earlier as provided in this Agreement. The
Option shall be exercisable during its term as to 20% of the Option Shares
during the twelve months beginning on the Date of Grant; 20% of the Option
Shares during the twelve months beginning on the first anniversary of the Date
of Grant; 20% of the Option Shares during the twelve months beginning on the
second anniversary of the Date of Grant; 20% of the Option Shares during the
twelve months beginning on the third anniversary of the Date of Grant; and 20%
of the Option Shares during the twelve months beginning on the fourth
anniversary of the Date of Grant; provided, however, if Optionee shall not in
any period purchase all of the Option Shares which Optionee is entitled to
purchase in such period, Optionee may purchase all or any part of such Option
Shares at any time after the end of such period and prior to the expiration of
the Option.
4. Exercise of Option
4.1 The Option shall be exercised by delivering this
Agreement for surrender or endorsement to the Company, at its principal office,
attention of the Secretary, together with a Notice and Agreement of Exercise (in
the form attached hereto or specified from time to time by the Committee)
indicating the number of Option Shares Optionee wishes to purchase and full
payment of the Exercise Price of such shares. The minimum number of shares as to
which the Option Shares may be exercised at any time is ten. In no event shall
the Company be required to issue or transfer fractional shares.
4.2 Payment for Option Shares may be made in cash, by
cashier's or certified check or (if the Committee authorizes payment in stock)
by delivery to the Company of shares of Common Stock, duly assigned to the
Company by a stock power with signatures guaranteed as provided on the back of
the stock certificate. The value of each share delivered in payment of the
Exercise Price of Option Shares shall be the fair market value ("Fair Market
Value") of the Common Stock on the date such shares are delivered. The Fair
Market Value of a share of Common Stock on any date shall be equal to the
closing price of the Common Stock for the last preceding day on which the
Company's shares were traded, and the method for determining the closing price
shall be determined by the Committee.
5. Employment of Optionee
5.1 Except as otherwise provided in paragraph 6 of this
Agreement, Optionee may not exercise the Option unless, at the time of exercise,
Optionee is an employee of the Company or a parent or a subsidiary thereof and
has been in the employ of the Company or a parent or subsidiary thereof
continuously since the Date of Grant. For purposes of this paragraph, the period
of
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continuous employment with the Company shall be deemed to include (without
extending the term of the Option) any period during which Optionee is on leave
of absence with the consent of the Company, provided that such leave of absence
shall not exceed three months and Optionee returns to the employ of the Company
at the expiration of such leave of absence. If Optionee fails to return to the
employ of the Company at the expiration of such leave of absence, Optionee's
employment with the Company shall be deemed terminated as of the date such leave
of absence commenced. The continuous employment of Optionee with the Company
shall also be deemed to include any period during which Optionee is a member of
the Armed Forces of the United States, provided that Optionee returns to the
employ of the Company within 90 days (or such longer period as may be prescribed
by law) from the date Optionee first becomes entitled to discharge. If Optionee
does not return to the employ of the Company within 90 days from the date
Optionee first becomes entitled to discharge (or such longer period as may be
prescribed by law), Optionee's employment with the Company shall be deemed to
have terminated as of the date Optionee's military service ended.
5.2 Nothing contained herein shall be construed to impose
upon the Company or upon any parent or subsidiary thereof any obligation to
employ Optionee for any period or to supersede or in any way alter, increase or
diminish the respective rights and obligations of the Company or any parent or
subsidiary thereof and Optionee under any employment contract now or hereafter
existing between them.
6. Termination of Employment
6.1 Unless otherwise determined by the Committee, if the
employment of Optionee with the Company shall terminate because of death, (a)
the Option, to the extent then presently exercisable, shall remain in full force
and effect and may be exercised pursuant to the provisions hereof, including
expiration at the end of the fixed term hereof, and (b) the Option, to the
extent not then presently exercisable, shall terminate as of the date of such
termination of employment and shall not be exercisable thereafter.
6.2 Unless otherwise determined by the Committee, if the
employment of Optionee with the Company shall terminate because of "Disability"
(as defined in the Plan), (a) the Option, to the extent then presently
exercisable, shall remain exercisable and may be exercised pursuant to the
provisions hereof at any time until the earlier of the end of the fixed term
hereof or the expiration of twelve months following termination of Optionee's
employment, and (b) the Option, to the extent not then presently exercisable,
shall terminate as of the date of such termination of employment and shall not
be exercisable thereafter.
6.3 Unless otherwise determined by the Committee, if the
employment of Optionee with the Company shall terminate for any reason other
than the reasons set forth in paragraphs 6.1 and 6.2 hereof, (a) the Option, to
the extent then presently exercisable or to the extent the Option becomes
exercisable pursuant to paragraph 9.3 hereof, shall remain exercisable only for
a period of three months after the date of such termination of employment and
may be exercised during such period pursuant to the provisions hereof, including
expiration at the end of the fixed term hereof, and (b) the Option, to the
extent not then presently exercisable, shall terminate as of the date of such
termination of employment and shall not be exercisable thereafter.
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7. Securities Laws Requirements
7.1 The Option shall not be exercisable unless and until
any applicable registration or qualification requirements of federal and state
securities laws, and all other requirements of law or any regulatory bodies
having jurisdiction over such exercise or issuance and delivery, have been fully
complied with. The Company will use reasonable efforts to maintain the
effectiveness of a Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act"), for the issuance of the Option and the Option
Shares but there may be times when no such Registration Statement will be
currently effective. Exercise of the Option may be temporarily suspended without
liability to the Company during times when no such Registration Statement is
currently effective, or during times when, in the reasonable opinion of the
Committee, such suspension is necessary to preclude violation of any
requirements of applicable law or regulatory bodies having jurisdiction over the
Company. If the Option would expire for any reason except the end of its term
during such a suspension, then if exercise of the Option is duly tendered before
its expiration, the Option shall be exercisable and exercised (unless the
attempted exercise is withdrawn) as of the first day after the end of such
suspension. The Company shall have no obligation to file any Registration
Statement covering resales of the Option Shares.
7.2 Upon each exercise of the Option, Optionee shall
represent, warrant and agree, by the Notice and Agreement of Exercise delivered
to the Company, that (a) no Option Shares will be sold or otherwise distributed
in violation of the Securities Act or any other applicable federal or state
securities laws, (b) if Optionee is subject to the reporting requirements under
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), Optionee will furnish to the Company a copy of each Form 4 filed by
Optionee and will timely file all reports required under federal securities
laws, and (c) Optionee will report all sales of Option Shares to the Company in
writing on the form prescribed from time to time by the Company. All Option
Share certificates may be imprinted with legend conditions reflecting federal
and state securities law restrictions and conditions and the Company may comply
therewith and issue "stop transfer" instructions to its transfer agents and
registrars without liability.
8. Non-transferability of Option
If Optionee is subject to the reporting requirements of
Section 16(a) of the Exchange Act at the time of the proposed transfer, the
Option shall be transferable only if such transferability or transfer would not
cause the Option to fail to qualify for the exemption provided for in Section
16b-3 of the Exchange Act, as determined by the Committee in its sole
discretion. The Option may be exercised, during the lifetime of Optionee, only
by Optionee and Optionee's permitted transferees. Notwithstanding the foregoing,
the Option shall not be assignable by operation of law and shall not be subject
to execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition contrary to the provisions of this
Agreement, and the levy of any execution, attachment or similar process
thereupon, shall be null and void and without effect.
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9. Changes in Capitalization
9.1 The number and class of shares subject to the Option,
the Exercise Price (but not the total price), and the minimum number of shares
as to which the Option may be exercised at any one time, shall be
proportionately adjusted in the event of any increase or decrease in the number
of the issued shares of Common Stock of the Company which results from a
split-up or consolidation of shares, payment of a stock dividend or stock
dividends, a recapitalization (other than the conversion of convertible
securities according to their terms), a combination of shares or other like
capital adjustment, so that upon exercise of the Option, Optionee shall receive
the number and class of shares Optionee would have received had Optionee been
the holder of the number of shares of Common Stock for which the Option is being
exercised upon the date of such change or increase or decrease in the number of
issued shares of the Company.
9.2 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 in which the Company survives as a subsidiary of
another corporation, a sale of all or substantially all of the property of the
Company to another corporation or any dividend or distribution to shareholders
of more than ten percent of the Company's assets, adequate adjustment or other
provisions shall be made by the Company or other party to such transaction so
that there shall remain and/or be substituted for the Option Shares provided for
herein, the shares, securities or assets which would have been issuable or
payable in respect of or in exchange for the Option Shares then remaining under
the Option, as if Optionee had been the owner of such shares as of the
applicable date. Any securities so substituted shall be subject to similar
successive adjustments.
9.3 The Option shall become fully exercisable upon the
occurrence of a change in control of the Company as defined herein (a "Change in
Control"). A Change in Control of the Company shall be deemed to have occurred
(a) on the date the Company first has actual knowledge that any person (as such
is used in Sections 13(d) and 14(d)(2) of the Exchange Act) who is not such
beneficial owner on the Date of Grant has become the beneficial owner (as
defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 40% or more of the combined voting power
of the Company's then outstanding securities or (b) on the date the stockholders
of the Company approve (i) a merger of the Company with or into any other
corporation in which the Company is not the surviving corporation or in which
the Company survives as a subsidiary of another corporation, (ii) a
consolidation of the Company with any other corporation or (iii) the sale or
disposition of all or substantially all of the Company's assets or a plan of
complete liquidation.
10. Relationship to Other Employee Benefit Plans
The Option shall not be deemed to be salary or other
compensation to Optionee for purposes of any pension, thrift, profit sharing,
stock purchase or other employee benefit plan now maintained or hereafter
adopted by the Company.
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11. Misconduct of Optionee
Notwithstanding any other provision of this Agreement or
the Plan, if Optionee shall commit fraud or dishonesty toward the Company,
wrongfully use or disclose any trade secret, confidential data or other
information proprietary to the Company or intentionally take any other action
materially inimical to the best interests of the Company, as determined by the
Committee in its sole and absolute discretion, Optionee shall forfeit all rights
and benefits under this Agreement.
12. Subsidiary
The term "subsidiary", as used herein, shall mean each
corporation which is a "subsidiary corporation" of the Company, within the
definition contained in Section 424(f) of the Code. Unless the context indicates
otherwise, references herein to the Company shall include all subsidiaries of
the Company and any parent it may have in the future.
13. Privileges of Ownership
Optionee shall not have any of the rights of a stockholder
with respect to the shares covered by the Option except to the extent that share
certificates have actually been issued and registered in Optionee's name on the
books of the Company or its registrar upon the due exercise of the Option. The
Company shall be allowed a reasonable time following notice of exercise in which
to accomplish the issuance and registration.
14. Reference to Plan
This Agreement and the Option are subject to all of the
terms and conditions of the Plan, which are hereby incorporated by reference. In
the event of any conflict between this Agreement and the Plan, the provisions of
the Plan shall prevail.
15. Notices
Any notice to be given under the terms of this Agreement
shall be addressed to the Company in care of its Secretary at 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and any notice to be given to Optionee shall
be addressed to Optionee at his or her address appearing on the employment
records of the Company, or at such other address or addresses as either party
may hereafter designate in writing to the other. Any such notice shall be deemed
duly given when enclosed in a properly sealed envelope, addressed as herein
required and deposited, postage prepaid, in a post office or branch post office
regularly maintained by the United States Government.
16. Withholding Taxes
The Company shall have the right at the time of exercise of
the Option to make adequate provision for any federal, state, local or foreign
taxes which it believes are or may be required by law to be withheld with
respect to such exercise, to ensure the payment (through
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withholding from Optionee's salary or the Option Shares or otherwise as the
Company shall deem in its sole and conclusive discretion to be in its best
interests) of any such taxes.
17. Number and Gender
Terms used herein in any number or gender include other
numbers or genders, as the context may require.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the Date of Grant.
"OPTIONEE" "COMPANY"
OROAMERICA, INC.
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Signature
---------------------------------- By----------------------------------
Print Name Xxx Xxxxxxxx, President
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OROAMERICA, INC.
NOTICE AND AGREEMENT OF EXERCISE
OF INCENTIVE STOCK OPTION
_____________,_____
I hereby exercise my OroAmerica, Inc., Incentive Stock Option dated
__________, ____, as to ________ shares of OroAmerica, Inc. common stock, $.001
par value (the "Option Shares").
Enclosed are the documents and payment specified in paragraph 4 of my
Option Agreement. I understand that no Option Shares shall be issued and
delivered unless and until any applicable registration requirements of the
Securities Act of 1933, as amended, any listing requirements of any securities
exchange on which stock of the same class is then listed, and any other
requirements of law or any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with. I hereby represent,
warrant and agree, to and with OroAmerica, Inc. (the "Company"), that:
The Option Shares I am purchasing are being acquired for my account,
and no other person (except, if I am married, my spouse) will own any interest
therein.
a. I will not sell or dispose of my Option Shares in violation of the
Securities Act of 1933 or any other applicable Federal or state securities laws.
I will obtain the Company's advice prior to any disposition of my Option Shares
except sales in unsolicited brokers transaction in the over-the-counter market.
b. I agree that the Company may, without liability, place legend
conditions upon my Option Shares and issue "stop transfer" restrictions
requiring compliance with applicable securities laws and the terms of my option.
c. If and so long as I am subject to reporting requirements under
Section 16(a) of the Securities Exchange Act of 1934, I will furnish to the
Company a copy of each Form 4 filed by me and will timely file all reports
required under the Federal securities laws.
d. I will report to the Company all sales of Option Shares on the
form prescribed from time to time by the Company.
The number of Option Shares specified above are to be issued in the
following registration (husband and wife will be shown to be joint tenants
unless I state that the Option Shares will be held as community property or as
tenants in common):
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(Print your name) (Signature)
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(Option - Print name of spouse
if you wish joint registration ------------------------------------
Address
