Exhibit 10.3
INCENTIVE STOCK OPTION AGREEMENT
GRANTED UNDER 1994 STOCK OPTION PLAN
Date
Name & Address
Dear __________:
I am pleased to advise you that the Compensation Committee of the Board
of Directors of Centennial Technologies, Inc. (the "Company"), pursuant to the
terms and conditions of the Company's 1994 Stock Option Plan (the "Plan"), which
are incorporated herein by reference, has awarded you the following stock
option:
Number of Option Shares: _____
Exercise Price per Share: $ _____
Date of Grant: Date
Vesting: In increments of
one-third annually commencing on
1 year from date of Grant
Final Exercise Date: 10 years from date of Grant
The Company has awarded you this stock option to encourage your efforts
at helping the Company to grow and succeed. Regardless of your decision whether
or not to buy, you are requested to keep the number of shares that you are
eligible to purchase strictly confidential.
The following terms and conditions are applicable with respect to this
option agreement, and your signature below shall constitute your acknowledgment
and acceptance of same.
1. GRANT OF OPTION.
This agreement evidences the grant by the Company, on ______________
(the "Grant Date") to you (the "Participant"), of an option to purchase, in
whole or in part, on the terms provided herein and in the Company's 1994 Stock
Option Plan, as amended (the "Plan"), a total number of shares (the "Shares") of
common stock, $.01 par value per share, of the Company ("Common Stock") at
$_____ per Share (the option grant(s) set forth above shall be referred to
herein as a "Option"). Unless earlier terminated, this option shall expire on
the date set forth above (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the "Code"). Except
as otherwise indicated by the context, the term "Participant," as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.
2. VESTING SCHEDULE.
This Option will become exercisable ("vest") as to 33 1/3% of the
original number of Shares on the first anniversary of the Grant Date applicable
to such option and as to an additional 33 1/3% of the original number of Shares
upon each of the following two anniversaries of such Grant Date, respectively.
The right of exercise shall be cumulative so that to the extent an
Option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date applicable to
such option or the termination of such option under Section 3 hereof or the
Plan.
3. EXERCISE OF OPTION.
(a) FORM OF EXERCISE. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than one hundred (100) whole shares.
(b) CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since
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the Grant Date, an employee, officer or employee director of, the Company or any
parent or subsidiary of the Company as defined in Section 424(e) or (f) of the
Code (an "Eligible Participant").
(c) TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), PROVIDED THAT this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Participant from
the Company describing such violation.
(d) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant by the
Participant, PROVIDED THAT this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) DISCHARGE FOR CAUSE. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the Participant
or willful failure by the Participant to perform his or her responsibilities to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company), as determined by the Company, which determination shall be conclusive.
The Participant shall be considered to have been discharged for "Cause" if the
Company determines, within 30 days after the Participant's resignation, that
discharge for cause was warranted.
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4. WITHHOLDING.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
5. NONTRANSFERABILITY OF OPTION.
This option may not be transferred otherwise than by will or the laws
of descent and distribution, and, during the lifetime of the Participant, this
option shall be exercisable only by the Participant.
6. DISQUALIFYING DISPOSITION.
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall immediately
notify the Company in writing of such disposition. If the Participant has died
before Shares are sold, the above holding restrictions and notice requirement do
not apply.
7. STOCK SPLITS.
The shares of Common Stock underlying this option or these options and
the exercise price therefor shall be appropriately adjusted from time to time
for stock splits, reverse splits and stock dividends.
8. ACQUISITION AND CHANGE IN CONTROL EVENTS
(a) DEFINITIONS
(i) An "Acquisition Event" shall mean:
(A) any merger or consolidation of the Company
with or into another entity as a result of
which the Common Stock is converted into or
exchanged for the right to receive cash,
securities or other property; or
(B) any exchange of shares of the Company for
cash, securities or other property pursuant
to a statutory share exchange transaction.
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(ii) A "Change in Control Event" shall mean:
the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share
exchange involving the Company or a sale or other
disposition of all or substantially all of the assets
of the Company (a "Business Combination"), unless,
immediately following such Business Combination, all
or substantially all of the individuals and entities
who were the beneficial owners of the
then-outstanding shares of Common Stock, (the
"Outstanding Company Common Stock") and the
then-outstanding Securities of the Company entitled
to vote generally on the election of directors (the
"Outstanding Company Voting Securities") immediately
prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the
combined voting power of the then-outstanding
securities entitled to vote generally in the election
of directors, respectively, of the resulting or
acquiring corporation in such Business Combination
(which shall include, without limitation, a
corporation which as a result of such transaction
owns the Company or substantially all of the
Company's assets either directly or through one or
more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions
as their ownership of the Outstanding Company Common
Stock and Outstanding Company Voting Securities,
respectively, immediately prior to such Business
Combination.
(b) EFFECT ON OPTIONS
(i) ACQUISITION EVENT. Upon the occurrence of an
Acquisition Event (regardless of whether such event
also constitutes a Change in Control Event), or the
execution by the Company of any agreement with
respect to an Acquisition Event (regardless of
whether such event will result in a Change in Control
Event), the Board shall provide that all outstanding
Options shall be assumed, or equivalent options shall
be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof); PROVIDED THAT
if such Acquisition Event also constitutes a Change
in Control Event, such assumed or substituted options
shall be immediately exercisable in full upon the
occurrence of such Acquisition Event.
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Notwithstanding the foregoing, if the acquiring or
succeeding corporation (or an affiliate thereof) does
not agree to assume, or substitute for, such Options,
then the Board shall, upon written notice to the
Participants, provide that all then unexercised
Options will become exercisable in full as of a
specified time prior to the Acquisition Event and
will terminate immediately prior to the consummation
of such Acquisition Event, except to the extent
exercised by the Participants before the consummation
of such Acquisition Event.
(ii) CHANGE IN CONTROL EVENT THAT IS NOT AN ACQUISITION
EVENT. Upon the occurrence of a Change in Control
Event that does not also constitute an Acquisition
Event, all Options then-outstanding shall
automatically become immediately exercisable in full.
9. PROVISIONS OF THE PLAN.
This Option is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this option.
This opportunity to purchase stock in the Company is being offered
because of the Company's desire to reward continuing service. However, it is not
and should not be construed as a guarantee of continuing employment.
Furthermore, exercising options may not be a prudent business decision for some
employees. Therefore, we urge you to review this opportunity carefully, consult
a tax advisor, and make a decision to exercise options only if your personal
financial situation makes this a wise decision.
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IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument on the date first set forth above.
CENTENNIAL TECHNOLOGIES, INC.
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
I hereby accept the foregoing option(s)
and agree to the terms and conditions
thereof.
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Name
Address:
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