EXHIBIT 4.3
XXXXXX COMMUNICATIONS, INC.
INCENTIVE STOCK OPTION AGREEMENT
(1995 Stock Option Plan amended as of June 20, 1995)
XXXXXX COMMUNICATIONS, INC., a Minnesota corporation (the "Company"),
pursuant to the 1995 Stock Option Plan previously adopted by the Board of
Directors of the Company (the "Plan"), and in consideration of services to be
rendered to the Company or its subsidiary
by__________________________ as _______________________________ (the
(Name) (Title or Job Description)
"Optionee"), hereby grants to the Optionee an incentive stock option (the
"Option") in accordance with Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), to purchase ______________ shares of the Company's
Common Stock (the "Shares") at a price of $______ per share (the "Purchase
Price"), equal to [Check One] ___100% or _____110% of the fair market value of
the Common Stock on the date of grant. This grant is made on the following terms
and conditions.
INCENTIVE STOCK OPTION
1. The Optionee may exercise the Option on a cumulative basis at any time
six (6) months after the date hereof and on or before ____________, _____ [Check
One] (seven) (7) years alter such date of grant) or _______ (five (5) years
after the date of grant if the 110% Purchase Price provision is checked above)
[provided, however, that the Option shall not be exercisable, unless and until
the amendments to the Plan adopted by the Board of Directors as of June 20,
1995, have been approved by the shareholders of the Company as provided in the
Plan as so amended], subject to prior termination or modification as herein
provided, in whole or in part with respect to
each of five (5) year to year cumulative annual installments, beginning on the
first day of each of the first five years during the aforesaid term hereof, as
follows:
(a) ten percent (10%) of such Shares during the first year of the
Option term;
(b) plus an additional fifteen percent (15%) of such Shares during
the second year of the Option term;
(c) plus an additional twenty-five percent (25%) of such Shares
during the third year of the Option term;
(d) plus an additional twenty-five percent (25%) of such shares
during the fourth year of the Option term; and
(e) plus an additional twenty-five percent (25%) of such Shares
during the fifth and, if any, remaining years of the Option term.
2. The Option shall not be transferable by the Optionee, except by will
or the laws of descent and distribution. During the Optionee's life, the Option
shall be exercisable only by the Optionee and only while and if the Optionee is
continuously employed by the Company or a subsidiary of the Company as described
in the Plan, except as provided in Section 4 of this Agreement. If the Option
shall not have terminated prior to the death of the Optionee, it may be
exercised at any time within twelve (12) months after death by the personal
representative of the Optionee's estate and/or by the Optionee's heirs, as the
case may be, subject to prior expiration on the date specified in Section 4 of
this Agreement.
3. The Option may be exercised in whole or in part, from time to time, by
delivery to the Secretary of the Company of a written notice specifying the
number of Shares desired to be purchased and accompanied by full payment of the
Purchase Price, at the election of the Optionee, in cash and/or by delivery of
certificate(s) duly endorsed for transfer, in shares of the Company's
Common Stock already owned by the Optionee. Any shares endorsed and delivered to
the Company in payment of the Purchase Price shall be valued at the fair market
value of the shares on the date of exercise, as determined by the Compensation
Committee of the Company's Board of Directors (the "Committee") in accordance
with the Plan or by the President or Secretary of the Company acting as the
Committee's designated representative. Any fractional share not required for
payment of the Purchase Price shall be paid for by the Company in cash on the
basis of the same value utilized for such exercise. If at the time of exercise
the Committee, in its sole discretion, shall permit utilization of a so-called
"cashless exercise" procedure to exercise the Option, the Optionee may apply to
the Company's President or Secretary to utilize the same, and if approved
thereby, the Optionee shall follow the "cashless exercise" procedures specified
in the Plan and in accordance with such rules therefor as the Committee may from
time to time establish.
4. All unexercised rights under the Option shall expire at the end of the
term specified in Section 1 above or on an earlier date, in the event of prior
termination of employment by the Company or its subsidiary of the Optionee, as
follows:
(a) Upon termination of employment of the Optionee by retirement of
Optionee at or after age 65 or by disability, the Option may be exercised
within three (3) months after the date of termination and shall thereupon
expire; provided, however, that the percentage limitations set forth in
Section 1(a) through (e) above shall not apply; and provided, further, that
the Committee may (but without any obligation therefor) by prior approval,
which approval the Committee may grant, withhold or condition for any
reason it deems to be in the best interests of the Company, also permit the
Optionee to retire to the same effect or on any less favorable basis prior
to age 65; or
(b) Upon death of the Optionee while employed or during the
three-month period described in Section 4(a) above, the Option may be
exercised within twelve (12) months after the date of death as provided in
Section 2 above and shall thereupon expire; provided, however, that the
percentage limitations set forth in Section 1(a) through (e) shall not
apply; or
(c) Upon such termination of employment of the Optionee for any other
reason, the Option shall expire on the date the Optionee's employment
terminates.
5. Unless the issuance of the Shares purchased upon the exercise of the
Option is registered with federal and state securities authorities (which is
anticipated but for which the Company has no obligation), or is determined by
counsel for the Company to be exempt from such registration without need
therefor, the Optionee shall be required to sign, deliver to the Company and be
bound by a customary "investment letter," setting forth the Optionee's
investment representation and securities law transfer restrictions consistent
with federal and state securities law exemptions from registration for issuance
of the Shares on exercise and consistent with Rule 144 under the Securities Act
of 1933, and requisite legends and stop transfer orders shall be placed upon or
against the certificates for the Shares. Without regard to registration or
exemption therefrom on exercise, if the Optionee is an officer or other
"affiliate" of the Company within the meaning of said Rule 144, the securities
law transfer restrictions consistent with said Rule 144 shall in any event be
applicable and requisite legends in the form attached as Exhibit A hereto and
stop transfer orders shall be placed upon or against the certificate for the
Shares.
6. If prior to the expiration of the Option, the Shares then subject to
the Option shall be affected by any recapitalization, merger, consolidation,
reorganization, stock dividend, stock split, or other change in capitalization
affecting the present Common Stock of the Company, then the
number and kind of Shares covered by this Agreement, and the Purchase Price per
share, shall be appropriately adjusted in accordance with the Plan by the
Committee or by the President or Secretary of the Company acting as the
Committee's designated representative, all as may be deemed necessary to prevent
dilution or enlargement of rights which might otherwise result.
7. If the Optionee sells, exchanges or otherwise disposes of any of the
Shares acquired upon exercise of the Option within two (2) years after the date
of this Agreement or one (1) year after the date of exercise of the Option with
respect to such Shares, the Optionee agrees to promptly notify the Company in
writing and disclose the number of Shares disposed of and the amount of
resulting gain or loss. The Optionee acknowledges that any such disposition will
be a "disqualifying disposition" of the Shares within the meaning of Section 422
of the Code which may subject the Optionee to federal income tax consequences
less favorable than if the two holding periods described above are satisfied
prior to any disposition of the Shares.
8. It is intended that those terms of the Plan and this Agreement which
refer or apply to incentive stock options comply and be interpreted in
accordance with the provisions of Section 422 of the Code and Rule 16b-3 under
the Securities Exchange Act of 1934, as amended. The provisions of the Plan
pertaining to Options, to the extent not set forth in this Agreement, are
incorporated by reference.
ADDITIONAL PRECONDITIONS TO EXERCISE.
9. A "Statement of Additional Terms and Conditions," determined by the
Committee and not inconsistent with the Plan, may be attached hereto as part
hereof. Satisfaction of the additional terms and conditions set forth in such
attached Statement, if any, shall be additional preconditions to vesting and
exercise of the Option, or so much thereof as shall correspond to the
extent such terms and conditions are ultimately satisfied. If attached, such
Statement shall be separately acknowledged by the signatures of the Optionee and
an appropriate officer of the Company.
IN WITNESS WHEREOF, this Incentive Stock Option Agreement is hereby
executed as of _________________, ____ (date of grant).
XXXXXX COMMUNICATIONS, INC.
By
----------------------------
Its
-------------------------
---------------------------------
Optionee
______Check if a Statement of Additional Terms and Conditions is attached.
If attached, such Statement must be signed by both the Optionee
and an appropriate officer of the Company.
EXHIBIT A
OFFICER/AFFILIATE
TRANSFER RESTRICTION LEGEND
The registered holder of the within certificate may be an "affiliate" of
the Company on the date of issue of this certificate within the meaning of Rule
144 promulgated under the Securities Act of 1933, as amended. Accordingly, the
securities represented by the within certificate may not be sold, transferred,
pledged or otherwise disposed of except pursuant to registration or notification
under such laws, exemption from such registration as evidenced by an opinion of
counsel satisfactory to the Company, or operation of law.
