FORM 1 (ISO)
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of ________________, 20__, by and between SAGA
COMMUNICATIONS, INC., a Delaware corporation (the "Corporation"), and
______________________________ (the "Optionee").
W I T N E S S E T H
WHEREAS, the Optionee is now employed by the Corporation or a
subsidiary of the Corporation and the Corporation desires to have the Optionee
remain in such employment and to afford Optionee the opportunity to acquire, or
enlarge, Optionee's stock ownership in the Corporation so that the Optionee may
have a direct proprietary interest in the Corporation's success.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. GRANT OF INCENTIVE STOCK OPTION
Subject to the terms and conditions set forth herein and in
the Saga Communications, Inc. 2005 Incentive Compensation Plan, as amended from
time to time (the "Plan"), the Corporation hereby grants to the Optionee an
Incentive Stock Option (as defined in the Plan) (the "Option") entitling the
Optionee, during the period set forth in Article 3 of this Agreement, to
purchase from the Corporation up to, but not exceeding in the aggregate, _____
shares of the Corporation's Class A Common Stock, $.01 par value ("Class A
Common Stock"), at a price per share of $______ (110% of FMV if granted to
greater than 10% shareholder), subject to adjustment as provided in Article 10
below. In the event of a conflict between the terms of this Agreement and the
terms of the Plan, the terms of the Plan shall govern.
2. VESTING AND EXERCISE OF OPTION
The Option shall not be vested to any extent and may not be
exercised prior to March 1, 200__. Subject to the terms and conditions set forth
herein, the Option shall be vested and exercisable beginning on March 1, 200__,
to the extent of 20% of the shares covered thereby, and an additional 20%
beginning on March 1 of each of the years 200__, 200__, 200__, and 200__,
provided, however, that Optionee is an "Employee" (as defined in the Plan) on
the applicable date of vesting. If Optionee is not an "Employee" on the vesting
date, the Option and the underlying shares of common stock shall be forfeited.
In the event that the Optionee's employment by the Corporation is terminated for
Cause (as defined in the Plan), the vesting of the Option shall cease
immediately upon the date of termination, and any vested but unexercised portion
of the Option shall not be exercisable to any extent. All Options shall become
fully vested and exercisable in full upon the occurrence of a Change in Control,
as defined in the Plan, or if the Committee determines that a Change in Control
has occurred, if Optionee is an Employee (as defined in the Plan) at the time of
such occurrence. Whether an authorized leave of absence or absence on military
or government service shall constitute termination of
employment shall be determined by the Committee authorized to administer the
Plan; and such Committee shall determine whether a termination is with or
without Cause, a voluntary retirement, or due to Disability (as defined in the
Plan).
During any calendar year, the Optionee may exercise the Option
only to the extent that the aggregate fair market value of the Class A Common
Stock (determined in accordance with the Plan) with respect to which the Options
are exercisable for the first time by the Optionee during such calendar year
(under this Plan and all similar plans of the Corporation by which the Optionee
is employed and its parent or subsidiary corporations) does not exceed $100,000.
3. OPTION PERIOD
The vested and exercisable portion of the Option, as
determined in accordance with Article 2 of this Agreement, may be exercised for
a period of ten (10) years from the date hereof (five (5) years if granted to
greater than 10% shareholder) provided, however, that if the Optionee is
terminated (1) for Cause, any unexercised portion of the Option (whether then
exercisable or not) shall, as of the time of the Cause determination,
immediately terminate, (2) due to death or Disability, then the Option, to the
extent that it is exercisable on the date of termination, shall be exercisable
only until the earlier of the one year anniversary of such termination or ten
(10) years from the date hereof (five (5) years if holder is greater than 10%
shareholder); (3) for any other reason, (except as provided in the next
sentence) then the Option, to the extent that it is exercisable on the date of
termination, shall be exercisable only until the earlier of the three month
anniversary of such termination or ten (10) years from the date hereof (five (5)
years if holder is greater than 10% shareholder). If, on or after the date that
the Option first becomes exercisable, Optionee's status as an Employee is
terminated due to retirement, or is terminated involuntarily (other than for
Cause or due to death or Disability) within 6 months following a Change in
Control, then the Option shall be exercisable until ten (10) years from the date
hereof, (five (5) years if holder is greater than 10% shareholder).
4. METHOD OF EXERCISING OPTIONS
During the period when the Option may by its terms be
exercised, the Optionee may from time to time exercise the Option in whole or in
part by delivering to the Corporation: (i) a written notice duly signed by the
Optionee, stating the number of shares that the Optionee has elected to purchase
at that time from the Corporation, and (ii) by payment utilizing any of the
methods described in Article 2.3 of the Plan.
5. ISSUANCE OF SHARES
As promptly as practical after receipt of such written
notification and consideration, the Corporation shall issue or transfer to the
Optionee the number of shares with respect to which the Option has been so
exercised and shall deliver to the Optionee a certificate or certificates
therefore in the Optionee's name.
6. DEFINITIONS
(a) The term "subsidiary" as used in this Agreement shall mean any
subsidiary of the Corporation as defined in Section 424(f) of the Code.
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(b) The term "parent" as used in this Agreement shall mean any parent
of the Corporation as defined in Section 424(e) of the Code.
(c) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
the Option may be transferred by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
ERISA, the word "Optionee" shall be deemed to include such person or persons.
7. NON-TRANSFERABILITY
The Option is not transferable by the Optionee otherwise than
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order and is exercisable during the Optionee's lifetime only
by him. No assignment or transfer of the Option, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise
(except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order, provided that the Corporation is furnished
with written notice of the transfer by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order and a copy of
the will, order and/or such other evidence as the Committee authorized to
administer the Plan may deem necessary to establish to its satisfaction the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions of the Option), shall vest in the assignee or
transferee any interest or right herein whatsoever, but immediately upon such
assignment or transfer the Option shall terminate and become of no further
effect.
8. COMPLIANCE WITH LAW AND REGULATIONS
This Option and the obligation of the Corporation to sell and
deliver shares hereunder, shall be subject to all applicable Federal and State
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation shall not be required to
issue or deliver any certificates for shares of stock prior to (a) the listing
of such shares on any stock exchange in which the stock may then be listed and
(b) the completion of any registration or qualification of such shares under any
Federal or State law, or any rule or regulation of any government body which the
Corporation shall, in its sole discretion, determine to be necessary or
advisable. Moreover, this Option may not be exercised if its exercise, or the
receipt of shares of stock pursuant thereto, would be contrary to applicable
law.
9. NOTICE.
Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided that,
unless and until some other address is so designated, all notices or
communications by the Optionee to the Corporation shall be mailed or delivered
to the Corporation at its office at 00 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxx Xxxxx, XX
00000, Attention: Chief Financial Officer, and all notices or communications by
the Corporation to the Optionee may be given to the Optionee personally or may
be mailed to him or her at the address shown below his or her signature to this
Agreement.
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10. ADJUSTMENTS
The provisions of Article VI of the Plan are incorporated
herein.
11. NO RIGHTS AS STOCKHOLDER
Optionee shall have no rights as a stockholder with respect to
any shares of stock subject to this Option prior to the date of issuance to him
of a certificate or certificates for such shares.
12. NO RIGHT TO CONTINUED EMPLOYMENT
This Option shall not confer upon Optionee any right with
respect to continuance of employment by the Corporation or any subsidiary or
parent, nor shall it interfere in any way with the right of the Optionee's
employer to terminate his employment at any time.
13. OPTIONEE BOUND BY PLAN
Optionee hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all terms and provisions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
SAGA COMMUNICATIONS, INC.
By:____________________________________
Xxxxxx X. Xxxxxxxxx
President/Chairman/C.E.O.
OPTIONEE
__________________________________
Name
__________________________________
Social Security Number
__________________________________
Address of Optionee
__________________________________
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