EXHIBIT 4.2
XXXXXXXXX.XXX, INC.
2000 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
(Nonqualified Stock Option)
Employee/Optionee: [Name]
Number of Shares: [Total Shares] Shares
Option Exercise Price: $ _________ per Share
Date of Xxxxx: [Grant Date]
Vesting Schedule: Percentage
of Shares Date (from Grant Date)
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*rounded to the next whole number of Shares
THIS OPTION AGREEMENT (the "Agreement") is entered into effective as
of the _______ day of May, 2000 by and between XXXXX.XXX, INC., a Minnesota
corporation (to be renamed Xxxxxxxxx.xxx) (the "Company"), and the individual
designated above (the "Optionee").
RECITALS
A. The xxxxxxxxx.xxx, Inc. 2000 Stock Option Plan (the "Plan") was
adopted by the Company, effective May 5, 2000; and
B. The Optionee performs valuable services for the Company, a Subsidiary
or a Parent; and
C. As of the date hereof, the Board of Directors of the Company granted
the Option as provided herein;
NOW, THEREFORE, the parties agree to the terms and conditions herein,
including the recitals.
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1. Grant of Option.
1.1 Option. An option to purchase shares of the Company's Common
Stock, $.001 par value per share, (the "Shares") is hereby granted to the
Optionee (the "Option").
1.2 Number of Shares. The number of Shares that the Optionee can
purchase upon exercise of the Option and the dates upon which the Option can
first be exercised are set forth above.
1.3 Option Exercise Price. The price the Optionee must pay to exercise
the Option (the "Option Exercise Price") is set forth above.
1.4 Date of Grant. The date the Option is granted (the "Date of
Grant") is set forth above.
1.5 Type of Option. The Option is intended to be a Nonqualified Stock
Option. It is not intended to qualify as an Incentive Stock Option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended from
time to time, or any successor provision thereto.
1.6 Construction. This Agreement shall be construed in accordance
and consistent with, and subject to, the provisions of the Plan (the provisions
of which are incorporated herein by reference) and, except as otherwise
expressly set forth herein, the capitalized terms used in this Agreement shall
have the same definitions as set forth in the Plan.
1.7 Condition. The Option is conditioned on the Optionee's execution
of this Agreement. If this Agreement is not executed by the Optionee it may be
canceled by the Board.
2. Duration.
The Option shall be exercisable to the extent and in the manner
provided herein for a period of ten (10) years from the Grant Date (the
"Exercise Term"); provided, however, that the Option may be earlier terminated
as provided in Section 1.7 and Section 5 hereof.
3. Vesting.
The Option shall vest, and may be exercised, with respect to the Shares,
on or after the dates set forth above, subject to earlier termination of
the Option as provided in Section 1.7 and Section 5 hereof or in the Plan. The
right to purchase the Shares as they become vested shall be cumulative and shall
continue during the Exercise Term unless sooner terminated as provided herein.
4. Manner of Exercise and Payment.
4.1 To exercise the Option, the Optionee must deliver a completed
copy of the Option Exercise Form, attached hereto as Exhibit A, to the address
indicated on such Form or such other address designated by the Company from time
to time. The Option may be exercised in whole or
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in part with respect to the vested Shares; provided, however, the Committee may
establish a minimum number of Shares (e.g., 100) for which an Option may be
exercised at a particular time. Within thirty (30) days of delivery of the
Option Exercise Form, the Company shall deliver certificates evidencing the
Shares to the Optionee, duly endorsed for transfer to the Optionee, free and
clear of all liens, security interests, pledges or other claims or charges.
Contemporaneously with the delivery of the Option Exercise Form, Optionee shall
tender the Option Exercise Price to the Company, by cash, check, wire transfer
or such other method of payment (e.g., delivery or attestation of Shares already
owned) as may be acceptable to the Committee pursuant to the Plan.
4.2 The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to any Shares subject to the Option
until (i) the Option shall have been exercised pursuant to the terms of this
Agreement and the Optionee shall have paid the full purchase price for the
number of Shares in respect of which the Option was exercised, (ii) the Company
shall have issued and delivered the Shares to the Optionee, and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company, whereupon the Optionee shall have full voting and other
ownership rights with respect to such Shares.
5. Termination of Employment.
5.1 Termination for Cause. If the Optionee's employment is terminated
by the Company for Cause, all outstanding unvested Options granted to
the Optionee shall expire, and Optionee's right to exercise any then outstanding
Options (whether or not vested) shall terminate immediately upon the date that
the Committee determines is the Optionee's date of termination of employment.
5.2 Termination of Employment for Other Reasons. If the Optionee's
employment is terminated by the Company without Cause or the Optionee
voluntarily terminates his employment (including a termination due to
Retirement, death or disability), all outstanding unvested Options shall expire,
and any Options vested as of his date of termination shall remain exercisable at
any time prior to their expiration date or for two (2) years after his date of
termination of employment, whichever period is shorter.
5.3 Employment by Subsidiary. For purposes of this Section and
Section 8, employment with the Company includes employment with any Parent or
Subsidiary of the Company and service as a Director of the Company or any Parent
or Subsidiary shall be considered employment with the Company. A change of
employment between the Company and any Parent or Subsidiary (or between
Subsidiaries or between a Subsidiary and a Parent) is not a termination of
employment under this Agreement.
6. Nontransferability.
The Option shall not be transferable other than by will or by the laws
of descent and distribution. During the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee.
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7. Restrictions on the Options; Restrictions on the Shares.
The Option may not be exercised at any time unless, in the opinion of
counsel for the Company, the issuance and sale of the Shares issued upon such
exercise is exempt from registration under the Securities Act of 1933, as
amended, or any other applicable federal or state securities law, rule or
regulation, or the Shares have been duly registered under such laws. The
Company shall not be required to register the Shares issuable upon the exercise
of the Option under any such laws. Unless the Shares have been registered under
all applicable laws, the Optionee shall represent, warrant and agree, as a
condition to the exercise of the Option, that the Shares are being purchased for
investment only and without a view to any sale or distribution of such Shares
and that such Shares shall not be transferred or disposed of in any manner
without registration under such laws, unless it is the opinion of counsel for
the Company that such a disposition is exempt from such registration. The
Optionee acknowledges that an appropriate legend, in such form as the Company
shall determine, giving notice of the foregoing restrictions shall appear
conspicuously on all certificates evidencing the Shares issued upon the exercise
of the Option.
The Optionee also acknowledges and agrees that, in connection with any
public offering of the Company's stock, upon request of the Company or the
underwriters managing any underwritten public offering of the Company's stock
and making such request with the approval of the Company's Board of Directors,
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any of his Shares without the prior written consent of
the Company or such underwriters, as the case may be, from the effective date of
such registration for so long as the Company or the underwriters may specify,
but in any event not to exceed 210 days.
8. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be interpreted or construed
to confer upon the Optionee any right with respect to continuance of
employment by the Company or any Parent or Subsidiary, nor shall this Agreement
or the Plan interfere in any way with the right of the Company or a Parent or
Subsidiary to terminate the Optionee's employment at any time.
9. Adjustments Upon Certain Events.
In the event of a change in capitalization, such as a stock split, the
Committee shall make appropriate adjustments to the number and class of Shares
or other stock or securities subject to the Option and the purchase price for
such Shares or other stock or securities. The Committee's adjustment shall be
made in accordance with the provisions of Section 4.3 of the Plan and shall be
effective and final, binding and conclusive for all purposes of the Plan and
this Agreement.
Subject to Section 6.9 of the Plan, upon a merger, consolidation,
separation, reorganization or other business combination involving the Company,
the Option shall be adjusted as provided in Section 4.3 of the Plan and/or the
Option shall be assumed or replaced with a substitute equivalent option.
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10. Withholding of Taxes.
The Company shall have the right to deduct from any distribution of
cash to the Optionee an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to the Option. If the Optionee is entitled to
receive Shares upon exercise of the Option, the Optionee shall pay the
Withholding Taxes (if any) to the Company in cash prior to the issuance of such
Shares. In satisfaction of the Withholding Taxes, the Optionee may make a
written election (the "Tax Election"), which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the Shares issuable
to him or her upon exercise of the Option, having an aggregate Fair Market Value
equal to the withholding Taxes, provided that, if the Optionee may be subject to
liability under Section 16(b) of the Exchange Act, the election must comply with
the requirements applicable to Share transactions by such Optionees.
11. Modification of Agreement.
This Agreement may be modified, amended, suspended or terminated, and
any terms or conditions may be waived, only by a written instrument executed by
the parties hereto.
12. Severability.
Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
13. Governing Law.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Minnesota without giving
effect to the conflicts of laws principles thereof.
14. Successors in Interest.
This Agreement shall be binding upon, and inure to the benefit of, the
Company and its successors and assigns, and upon any person acquiring, whether
by merger, consolidation, reorganization, purchase of stock or assets, or
otherwise, all or substantially all of the Company's assets and business. This
Agreement shall inure to the benefit of the Optionee's heirs and legal
representatives. All obligations imposed upon the Optionee and all rights
granted to the Company under this Agreement shall be final, binding and
conclusive upon the Optionee's heirs, executors, administrators and successors.
15. Resolution of Disputes.
Any dispute or disagreement which may arise under, or as a result of, or
in any way relate to, the interpretation, construction or application of this
Agreement shall be determined by the Board. Any determination made hereunder
shall be final, binding and conclusive on the Optionee and the Company for all
purposes.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
X-XXXX.XXX, INC.
By:
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Name:
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Title:
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By signing below, Optionee hereby accepts the Option subject to all its
terms and provisions and agrees to be bound by the terms and provisions of the
Plan. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board of Directors of the Company, and of
the Committee responsible for administration of the Plan, upon any questions
arising under the Plan. Optionee authorizes the Company to withhold, in
accordance with applicable law, from any compensation payable to him or her, any
taxes required to be withheld by federal, state or local law as a result of the
grant, existence or exercise of the Option or subsequent sale of the Shares.
OPTIONEE
Signature:
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Name: [Name]
[EXHIBIT FOLLOWS]
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EXHIBIT A
OPTION EXERCISE FORM
I, _____________________________, do hereby exercise the Option with a Date
of Grant of ___________________, ______ granted to me pursuant to the Option
Agreement. The Shares being purchased and the Total Option Exercise Price are
set forth below:
Number of Shares: Shares
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Option Exercise Price Per Share x $ per Share
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Total Option Exercise Price: = $ .
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The Total Option Exercise Price is included with this Form.
Date:
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Signature
Send or deliver this Form with an original signature to
x-xxxx.xxx, Inc. (to be renamed xxxxxxxxx.xxx, Inc.)
000-000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. V6B 4N5
Attn: Chief Financial Officer
EXHIBIT A
