EXHIBIT 4.3
NON-QUALIFIED RESTRICTED STOCK OPTION AGREEMENT
Applied Epi, Inc.
--------------------------------------------------------------------------------
OPTIONEE: _______________________
GRANT DATE: January 2, 2001
NUMBER OF OPTION SHARES: __________ Shares
OPTION PRICE PER SHARE: $0.05 per Share
EXPIRATION DATE: January 2, 2011
--------------------------------------------------------------------------------
THIS AGREEMENT is made as of the Grant Date stated above, by
and between Applied Epi, Inc., a Minnesota corporation (the "Company"), and the
Optionee named above (the "Optionee"). The Optionee is a current or prior
employee of the Company and holds performance units in the Company's Employee
Performance Stock Ownership Plan (the "Phantom Stock Plan"). The performance
units permit the Optionee to receive cash at a stated formula value, which is
tied to the Company's earnings over a three-year period. The Company has
terminated the Phantom Stock Plan as of December 31, 2000.
In connection with the termination of the Phantom Plan and in
exchange for the Optionee's performance units, the Company is providing the
Optionee with this option to purchase shares of the Company's restricted common
stock, par value $.01 per share (the "Restricted Stock"), on the terms and
conditions set forth in this Agreement. Upon exercise of the option, the
Restricted Stock will not be freely transferable and will be subject to the
restrictions described in Section 5, below.
NOW, THEREFORE, the Company and the Optionee agree as follows:
1. GRANT OF OPTION. In exchange for the Optionee's performance units in
and all rights under the Phantom Stock Plan, including all rights to receive
cash under the Phantom Stock Plan, the Company hereby grants to the Optionee,
and the Optionee hereby accepts in exchange for the performance units and all
rights under the Phantom Stock Plan, the right and option (the "Option") to
purchase all or part of the aggregate number of shares of Restricted Stock
stated above (the "Option Shares"), on the terms and conditions set forth in
this Agreement. The number of Option Shares is subject to adjustment as provided
in Section 14 of this Agreement.
1
2. NATURE OF OPTION. This Option is NOT intended to be an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
3. PURCHASE PRICE. The purchase price of the Option Shares shall be the
Option Price per share stated above. The Option Price is subject to adjustment
as provided in Section 14 of this Agreement.
4. DURATION OF OPTION. This Option shall be in effect for the period
commencing on the Grant Date stated above and ending on the Expiration Date
stated above. All rights of the Optionee under this Option shall terminate and
be forfeited to the extent this Option has not been exercised at the date this
Option expires.
5. RESTRICTIONS ON OPTION SHARES. Upon exercise of this Option as
described in Section 6 below, Optionee shall receive shares of the Company's
Restricted Stock. The Optionee agrees that the shares of Restricted Stock shall
not be sold, exchanged, transferred, pledged, hypothecated, or otherwise
disposed of, whether voluntarily, involuntarily, or by operation of law, until
the earlier of the following to occur: (1) six months after the consummation of
a firm commitment, underwritten initial public offering of the Company's common
stock; or (2) a Sale (as defined in this Section 5) of the Company. A "Sale" of
the Company shall mean any of the following:
(i) the sale, lease, exchange or other transfer,
directly or indirectly, of substantially all of the assets of the
Company (in one transaction or in a series of related transactions) to
a person or entity that is not controlled by the Company;
(ii) the entering into an agreement for the sale of
common stock of the Company (whether outstanding or newly issued
shares) to a person not a shareholder on the date hereof who thereby
acquires majority voting control of the Company, subject to such
transaction actually being consummated;
(iii) the approval by the shareholders of the Company
of any plan or proposal for a merger or consolidation to which the
Company is a party if the shareholders of the Company immediately prior
to the effective date of such merger or consolidation own, immediately
following the effective date of such merger or consolidation,
securities of the surviving corporation representing 50% or less of the
combined voting power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of
directors, subject to such transaction actually being consummated; or
(iv) the approval by the shareholders of the Company
of any plan or proposal for a merger or consolidation to which the
Company is a party and pursuant to which the Company does not survive,
subject to such transaction actually being consummated.
2
6. MANNER OF EXERCISE OF OPTION.
(a) TIME OF EXERCISE. This Option may be exercised at any time, and
at one or more times before it expires. This Option, when exercised, may be
exercised for some or all of the Option Shares, and any Option Shares that are
not purchased at that time may be purchased at a subsequent date of exercise.
The exercise of this Option at each date of exercise shall be subject to all of
the terms and conditions of this Agreement, including but not limited to the
provisions of Sections 6 and 7 of this Agreement.
(b) EXERCISE ONLY BY OPTIONEE OR OTHER PROPER PARTY. During the
lifetime of the Optionee, the Optionee is the only person who may exercise this
Option, except that, if the Optionee shall be incapacitated, the Optionee's
guardian or other legal representative may exercise this Option on behalf of the
Optionee. If the Optionee shall die, this Option may be exercised only by the
personal representatives, executors or administrators of the Optionee's estate
or by the person or persons to whom the Optionee's rights under this Option
shall pass by the Optionee's will or the laws of descent and distribution.
(c) NOTICE OF EXERCISE. To exercise this Option, the Optionee (or
other proper party in the event of the Optionee's incapacity or death) shall
deliver a written notice of exercise (the "Notice of Exercise") to the Company
at its principal executive office. The Notice of Exercise shall be in the form
attached to this Agreement as Exhibit A, shall state the number of Option Shares
with respect to which this Option is being exercised and shall be accompanied by
payment in full of the aggregate Option Price for all Option Shares designated
in the Notice of Exercise. If required by the Company, in its sole discretion,
the Notice of Exercise shall also include other representations and agreements
as to the purchaser's investment intent with respect to the Option Shares. The
Notice of Exercise shall be signed by the Optionee (or other proper party in the
event of the Optionee's incapacity or death) and must be delivered to the
Company prior to the termination or expiration of this Option.
(d) PAYMENT OF OPTION PRICE. The aggregate Option Price for all
Option Shares designated in the Notice of Exercise shall be paid in cash
(including check, bank draft or money order), by tendering shares of the
Company's common stock that are already owned by the Optionee having an
aggregate Fair Market Value (as defined in Section 9) on the date of exercise
which is not less than the aggregate Option Price, or by a combination of such
methods.
(e) WITHHOLDING REQUIREMENTS. Upon exercise of the Option by the
Optionee and prior to the delivery of shares purchased pursuant to such
exercise, the Company shall have the right to require the Optionee to remit to
the Company cash in an amount sufficient to satisfy applicable federal and state
tax withholding requirements. The Company shall inform the Optionee as to
whether it will require the Optionee to remit cash for withholding taxes in
accordance with the preceding sentence within two (2) business days after
receiving from the Optionee notice that such Optionee intends to exercise, or
has exercised, all or a portion of the Option.
3
7. RESTRICTIONS ON EXERCISE OF OPTION.
(a) This Option may not be exercised for a fraction of a share.
(b) This issuance of Option Shares upon the exercise of this Option
shall be subject to all applicable laws, rules, and regulations. If the Company
determines at any date of exercise that the issuance of the Option Shares
requires the listing, registration or qualification of the Option Shares on any
securities exchange or under any federal or state law, or the consent or
approval of any regulatory body, this Option shall not be exercisable and the
Option Shares shall not be issued unless and until such requirements are
fulfilled in a manner satisfactory to the Company.
8. TAXATION UPON EXERCISE OF OPTION. The Optionee understands that the
exercise of this Option will cause the Optionee to recognize income for tax
purposes. The amount of taxable income will be equal to the amount by which the
Fair Market Value (as defined in Section 9 of this Agreement) of the Option
Shares that are purchased on the date of exercise exceeds the aggregate Option
Price for such Option Shares.
9. FAIR MARKET VALUE. "Fair Market Value" means, with respect to the
common stock, the following:
(a) If the common stock is listed or admitted to unlisted trading
privileges on any national securities exchange or is not so listed or admitted
but transactions in the common stock are reported on the Nasdaq National Market
or on the Nasdaq SmallCap Market, the closing sale price of the common stock on
such exchange or reported by the Nasdaq National Market or the Nasdaq SmallCap
Market as of such date (or, if no shares were traded on such day, as of the next
preceding day on which there was such a trade).
(b) If the common stock is not so listed or admitted to unlisted
trading privileges or reported on the Nasdaq National Market or the Nasdaq
SmallCap Market, and bid and asked prices therefor in the over-the-counter
market are reported on the OTC Bulletin Board Service (or any comparable
reporting service), the mean of the closing bid and asked prices as of such
date, as so reported by the OTC Bulletin Board Service (or such comparable
reporting service).
(c) If the common stock is not so listed or admitted to unlisted
trading privileges, or reported on the Nasdaq National Market or the Nasdaq
SmallCap Market, and such bid and asked prices are not so reported, such price
as the Board of Directors of the Company or the appropriate committee thereof
determines in good faith in the exercise of its reasonable discretion. The Board
of Director's or committee's determination as to the current value of the common
stock shall be final, conclusive and binding for all purposes and on all
persons, including, without limitation, the Company, the shareholders of the
Company, the Optionee and their respective successors-in-interest. No member of
the Board of Directors or any committee shall be liable for any determination
regarding current value of the common stock that is made in good faith.
4
10. NONTRANSFERABILITY OF OPTION. This Option shall not be transferable
by the Optionee, other than by will or the laws of descent and distribution, and
this Option may be exercised, during the lifetime of the Optionee, only by the
Optionee. This deposit, if required, shall remain in effect with respect to any
portion of the Option Shares until the occurrence of any of the events described
in Section 5 of this Agreement.
11. RIGHTS AS SHAREHOLDER. The Optionee (or any other party claiming
rights through the Optionee) shall not be, or be deemed to be, a holder of any
Option Shares for any purpose unless and until certificates for such shares are
issued to the Optionee (or other proper party in the event of the Optionee's
incapacity or death).
12. DEPOSIT OF CERTIFICATES. The Optionee agrees that, at any time upon
the request of the Company, the Optionee shall deposit with the Company the
certificate or certificates representing the Option Shares (to the extent the
certificate or certificates are not, at the time of such request, already
deposited with the Company), together with the stock powers or other instruments
of transfer appropriately endorse in blank by the Optionee. This deposit, if
requested, shall remain in effect with respect to any portion of the Option
Shares until the occurrence of any of the events described in Section 5 of this
Agreement.
13. NO PROMISE OF CONTINUED EMPLOYMENT. This Option does not constitute
an express or implied promise that the Company will hire or continue to employ
the Optionee, and if the Optionee is or becomes an employee of the Company, this
Option shall not interfere in any way with the Company's right to terminate the
Optionee's employment at any time.
14. ADJUSTMENTS. In the event of any change in the outstanding shares
of the Company's common stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares, or rights offering to purchase the Company's common stock at a price
substantially below fair market value, or other similar change affecting the
common stock, while any portion of this Option is outstanding and unexercised,
the Board of Directors of the Company or the appropriate committee thereof shall
make such adjustments in the number of Option Shares and in the Option Price as
shall be equitable and appropriate in order to prevent substantial dilution or
enlargement of the rights granted to, or available for, the Optionee. No
adjustments shall be made in connection with the issuance by the Company of any
warrants, rights, or options to acquire additional shares of common stock or of
securities converted into common stock at a price that is not substantially
below the Fair Market Value (as defined in Section 9) of the common stock at the
date such warrants, rights or options are issued.
15. INTERPRETATION. The interpretation and construction of any
provision of this Option shall be made by the Board of Directors of the Company
or an appropriate committee thereof and shall be final, conclusive and binding
on the Optionee and all other persons.
5
16. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto and supersedes in their entirety all prior
contracts, agreements, arrangements, communications, discussions,
representations and warranties, whether oral or written, among the parties with
respect to the subject matter hereof. Without limiting the foregoing, the
parties acknowledge that this Agreement was not entered into pursuant to, and is
not governed by the terms of, any stock option plan or similar plan, including
the Phantom Stock Plan.
17. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Minnesota.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its corporate name by its duly authorized officer, and the Optionee
has executed this Agreement as of the Grant Date state above.
COMPANY: APPLIED EPI, INC.
By:
-------------------------------------
Title:
OPTIONEE:
--------------------------------------------
By:
-------------------------------------
Title:
6
EXHIBIT A
NOTICE OF EXERCISE
(To be completed and signed when the Option is exercised)
TO: Applied Epi, Inc.
DATE: ---------------------------------
RE: Non-Qualified Restricted Stock Option Agreement dated January 2, 2001
A. EXERCISE OF OPTION. I hereby elect to exercise the stock option
identified above with respect to the following number of shares of Restricted
Stock (the "Option Shares"), effective as of the date stated above:
No. of Option Shares to be purchased: shares
-----------
Option Price per Share: $0.05 per share
Total Purchase Price: $
------------------
Payment of the Total Purchase Price for the Option Shares in the
amount stated above is enclosed with this Notice of Exercise.
Please prepare the stock certificate in the following name(s):
B. PURCHASER'S REPRESENTATIONS. I hereby represent, warrant and agree
as follows:
1. ACCESS TO INFORMATION. In connection with the exercise of the
Option and the purchase of the Option Shares, I have had access to information
about the business and financial condition of the Company and have had the
opportunity to ask questions of, and receive answers from, the management of the
Company as to the business and financial condition of the Company.
2. PURCHASE FOR OWN ACCOUNT. I am acquiring the Option Shares for
investment and solely for my own account and without the intention of reselling
or redistributing the Option Shares. I agree that I will not sell or otherwise
dispose of the Option Shares in a manner inconsistent with such representations.
3. SHARES NOT REGISTERED. I understand that the Option Shares are
not being registered under the Securities Act of 1933 or any state securities
laws; that I cannot sell the Option Shares unless they are subsequently
registered or unless an exemption from such registration is available with
7
respect to any such sale; and accordingly, that I must bear the economic risk
of the investment for an indefinite period of time.
4. RESTRICTIONS ON OPTION SHARES. I agree not to sell, exchange,
transfer, pledge, hypothecate, or otherwise dispose of, whether voluntarily,
involuntarily, or by operation of law, any of the Option Shares until the
earlier of the following to occur: (1) six months after the consummation of a
firm commitment, underwritten initial public offering of the Company's common
stock; or (2) a Sale of the Company. A "Sale" of the Company shall mean any of
the following:
(i) the sale, lease, exchange or other transfer,
directly or indirectly, of substantially all of the assets of the
Company (in one transaction or in a series of related transactions) to
a person or entity that is not controlled by the Company;
(ii) the entering into an agreement for the sale of
common stock of the Company (whether outstanding or newly issued
shares) to a person not a shareholder on the date hereof who thereby
acquires majority voting control of the Company, subject to such
transaction actually being consummated;
(iii) the approval by the shareholders of the Company
of any plan or proposal for a merger or consolidation to which the
Company is a party if the shareholders of the Company immediately prior
to the effective date of such merger or consolidation own, immediately
following the effective date of such merger or consolidation,
securities of the surviving corporation representing 50% or less of the
combined voting power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of
directors, subject to such transaction actually being consummated; or
(iv) the approval by the shareholders of the Company
of any plan or proposal for a merger or consolidation to which the
Company is a party and pursuant to which the Company does not survive,
subject to such transaction actually being consummated.
5. RESTRICTIVE LEGENDS. I agree that the Company will place the
following restrictive legend on the certificates representing the Option Shares
to reflect the restrictions described above and may place stop-transfer
restrictions on the Option Shares represented by such certificates. Such legend
shall be substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or applicable
state securities laws and may not be sold, transferred or
otherwise disposed of except pursuant to registration,
exemption from registration or operation of law. Furthermore,
the transfer of the shares represented by this certificate is
subject to the terms and conditions of a Non-Qualified
Restricted Stock Option Agreement dated January 2, 2001
8
between Applied Epi, Inc. and the registered owner. Any attempt
to transfer such shares in violation of the Non-Qualified Restricted
Stock Option Agreement is void. A copy of such Non-Qualified Stock
Option Agreement is on file in the offices of Applied Epi, Inc."
6. DEPOSIT OF CERTIFICATES. I agree that, at any time upon the
request of the Company, I shall deposit with the Company the certificate or
certificates representing the Option Shares (to the extent the certificate or
certificates are not, at the time of such request, already deposited with the
Company), together with stock powers or other instruments of transfer
appropriately endorsed in blank by me. This deposit, if requested, shall remain
in effect with respect to any portion of the Option Shares until the occurrence
of any of the events described in Section 4 above.
7. TAXATION UPON EXERCISE OF OPTION. I understand that the exercise
of this Option will cause me to recognize income for tax purposes. The amount of
taxable income will be equal to the amount by which the Fair Market Value of the
Option Shares that I am purchasing exceeds the Total Purchase Price for the
Option Shares.
--------------------------------------
[NAME OF OPTIONEE]
--------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------
Xxxx, Xxxxx and ZIP
--------------------------------------
Social Security Number
9
