EXHIBIT 4.12
OEC MEDICAL SYSTEMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
Standard Milestone
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Option
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AGREEMENT made as of the ____ day of _______, 199_ by and between OEC
Medical Systems, Inc., a Delaware corporation (hereinafter called "Company") and
(hereinafter called "Optionee").
WITNESSETH:
RECITALS
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A. The Company's 1998 Stock Option Plan (the "Plan") has been implemented for
the purpose of providing equity incentives to select Employees (including
Officers and Directors) and Consultants of the Company and the Company's
Subsidiaries in order to encourage such persons to remain in the employ or
service of the Company or the Company's Subsidiaries.
B. Optionee is an Employee who is to render valuable services to the Company or
its Subsidiaries, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of a
stock option to Optionee.
C. The granted option is intended to be an incentive stock option which meets
the requirements of Section 422 of the Internal Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee an incentive stock
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option (the "Option") under the Plan to purchase all or any part of an aggregate
of ____ shares of the Company's common stock, $0.01 par value per share ("Common
Stock"), upon the terms and conditions set forth herein and in the Plan, with
the terms and conditions of the Plan hereby incorporated into this Agreement by
reference. Except to the extent otherwise specifically provided in this
Agreement, all capitalized terms shall have the meaning set forth in the Plan.
2. EFFECTIVE DATE. The effective date and grant date of this Option are
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(the "Effective Date").
3. EXERCISE PRICE. The exercise price for purchase of the shares of Common
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Stock covered by this Option (the "Option Shares") shall be $____ per share (the
"Option Price"), the closing selling price per share of the Common Stock on the
New York Stock Exchange on the Effective Date, as reported in the Wall Street
Journal.
4. OPTION TERM. This Option shall terminate on the first to occur of (i) the
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expiration of the applicable exercise period under Paragraph 7 following the
date of the Optionee's Employment Termination or (ii) the expiration date of the
ten-year period measured from the Effective Date (the "Expiration Date").
5. ADJUSTMENTS/STOCKHOLDER RIGHTS.
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A. The number of Option Shares and the Option Price payable per share may
be adjusted by the Plan Administrator upon certain circumstances in accordance
with the provisions of Section 4.4 of Article One and Section 3.1 of Article Two
of the Plan.
B. Optionee shall have no stockholder rights with respect to any Option
Shares until Optionee shall have exercised the Option, paid the Option Price and
been issued a stock certificate for the purchased Option Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as may
otherwise be provided in Section 4.4 of Article One and Section 3.1 of Article
Two of the Plan.
6. EXERCISE OF OPTIONS.
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A. NORMAL EXERCISE SCHEDULE
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Provided Optionee continues to render services as an Employee, this
Option shall become exercisable for all of the Option Shares upon the Optionee's
completion of [[six (6) years]] of service with the Company as an Employee
measured from the ______, 199_ Effective Date.
B. SPECIAL ACCELERATION SCHEDULE
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In the event the following milestones are achieved while Optionee
continues in the Company's service as an Employee, the exercisability of this
Option shall accelerate, and the Option shall become immediately exercisable,
for one or more installments of the Option Shares in accordance with the
following schedule:
[Milestones to be defined by Plan Administrator]
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The milestones triggering the acceleration of the Option Shares shall be
appropriately adjusted in the event of any stock dividend, stock split,
recapitalization or other similar change affecting the number of outstanding
shares of Common Stock effected without the Company's receipt of consideration.
C. CUMULATIVE INSTALLMENTS
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Each installment of Option Shares for which this Option becomes exercisable
under either the Normal Exercise Schedule or the Special Acceleration Schedule
shall accumulate, and the Option shall remain exercisable for such accumulated
installments until the Expiration Date or sooner termination of this Option
pursuant to Paragraph 7 of this Agreement.
7. EXERCISE AFTER EMPLOYMENT TERMINATION. This Option shall not become
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exercisable for any additional Option Shares following the Optionee's Employment
Termination and may only be exercised after such Employment Termination as
follows:
A. If the Optionee's Employment Termination occurs for any reason other
than death or Permanent Disability, then this Option may be exercised, for
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one or more of the Option Shares (if any) for which it was exercisable on the
date of such Employment Termination, only during the ninety (90)-day period
following such date. Upon the expiration of such period, this Option shall
terminate and cease to be exercisable.
B. If the Optionee's Employment Termination occurs by reason of death or
Permanent Disability, then this Option may be exercised, for one or more of the
Option Shares (if any) for which it was exercisable on the date of such
Employment Termination (less any Option Shares subsequently purchased by the
Optionee prior to death), only during the twelve (12)-month period following
such date. Upon the expiration of such period, this Option shall terminate and
cease to be exercisable.
C. Notwithstanding subparagraphs A and B above, in no event may this
Option be exercised at any time after the Expiration Date.
D. In the event of the Optionee's death, this Option may be exercised,
subject to the limitations of subparagraphs B and C above, by the executors or
administrators of the Optionee's estate or by any person or persons who have
acquired the Option directly from the Optionee by bequest or inheritance.
8. METHOD OF EXERCISE.
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A. Optionee may exercise the Option for any or all of the Option Shares for
which the Option is at the time exercisable pursuant to the provisions of
Paragraphs 6 and 7 by giving the Company written notice of such exercise in
which there is specified the number of Option Shares as to which the Option is
so exercised. Such notice shall be accompanied by payment to the Company,
either in cash or by check in form satisfactory to the Company, of an amount
equal to the sum of the Option Price of the purchased shares of Common Stock
plus any amounts required to be withheld pursuant to Paragraph 15.
B. The Option Price may also be paid in one of the alternative forms
specified below, and such form of payment must also accompany the notice of
exercise (unless the sale and remittance procedure of clause (iii) below is
utilized):
(i) in whole or in part with shares of Common Stock delivered to the
Company in accordance with the terms of the Plan,
(ii) through a broker-dealer sale and remittance procedure pursuant to
which the Optionee (a) shall provide irrevocable written instructions to a
Company-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Option Price payable for the purchased shares plus all applicable Federal
and State income and employment taxes required to be withheld by the Company
by reason of such
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purchase and (b) shall provide written directives to the Company to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction, or
(iii) with the consent of the Plan Administrator, either (a) by delivery
of the Optionee's full-recourse promissory note (in accordance with the
terms of the Plan) or (b) on such other basis as the Plan Administrator
determines is acceptable.
9. NON-ASSIGNABILITY OF OPTION. This Option is not assignable or transferable
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by Optionee except by will or by the laws of descent and distribution following
the Optionee's death. During the Optionee's lifetime, the Option is exercisable
only by the Optionee. Any attempt to assign, pledge, transfer, hypothecate or
otherwise dispose of this Option, and any levy of execution, attachment or
similar process on this Option, shall be null and void.
10. OPTION ACCELERATION. Provided one of the events specified in clauses (i)
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through (iv) below should occur (A) more than six (6) months after the Effective
Date and (B) while Optionee is an active Employee, then Optionee shall have the
right (without regard to either the Normal Exercise or Special Acceleration
Schedules set forth in Paragraph 6) to exercise this Option, within the
applicable exercise period specified below, for any or all of the Option Shares
as fully-vested shares of Common Stock:
(i) Within thirty (30) days following loss of Employee status due to
the consummation of any transaction which (I) is approved by the
stockholders of the Company in which the Company will cease to be an
independent corporation (including, without limitation, a reverse merger
transaction in which the Company becomes the subsidiary of another
corporation) or the sale or other disposition of all or substantially all of
the assets of the Company, and (II) caused the Optionee to lose his or her
status as an Employee within one year after the closing date of the
transaction;
(ii) Within thirty (30) days following the first date on which there is
a change in the composition of the Board effected through one or more
contested elections for Board membership such that less than two- thirds of
the individual members of the Board (determined by rounding up to the next
whole number) is comprised of individuals who (A) were Directors of the
Company on a date three (3) years prior to the date of such change or (B)
were elected or nominated for election as such Directors during the
intervening three (3)-year period by affirmative vote of at least a majority
of those Directors described in clause (A) above who were still in
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office as of the date the Board approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) or any
related group of persons (other than such a group that includes the Company)
acquires (A) 40% or more of the outstanding Common Stock pursuant to a
tender or exchange offer that the Board does not recommend the stockholders
to accept or (B) 50% or more of the outstanding Common Stock in a single
transaction or in a series of related transactions; or
(iv) Within the thirty (30)-day period ending with the effective date
of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the State of
the Company's incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
If the Option as so accelerated is not exercised during the applicable
thirty (30)-day period described in clause (i) or (iv) above, then the Option
shall terminate at the close of business on the last day of such thirty (30)-day
period, unless the Option is assumed by the acquiring corporation (or its parent
company) in connection with a merger or consolidation in which the Company is
not the surviving entity. Should this option not qualify for acceleration under
clause (i) or (iv) because it has not been outstanding for at least six (6)
months prior to the clause (i) or (iv) event, then this option shall be subject
to adjustment under Section 3.1 of Article Two of the Plan, if and to the extent
the option is to continue in effect after such clause (i) or (iv) event;
otherwise, this option shall terminate upon the occurrence of such clause (i) or
(iv) event.
11. RESTRICTION OF ISSUANCE OF SHARES.
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A. LEGALITY OF ISSUANCE. The Company shall not be obligated to sell or
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issue any Option Shares pursuant to this Option (the "Exercised Shares") if such
sale or issuance would, in the opinion of the Company and the Company's counsel,
constitute a violation by the Company of any provision of law, including without
limitation the provisions of the Securities Act of 1933, as amended (the "Act").
B. REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may, but shall
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not be required to, register, qualify, or perfect an exemption under the Act or
any other applicable law for the grant of this Option or the issuance or sale of
any Exercised Shares. The Company shall not be obligated to take any affirmative
action in order to cause the grant or exercise of this Option or the issuance or
sale of any
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Exercised Shares pursuant hereto to comply with any law or to be listed or
qualified on any stock exchange.
12. RESTRICTION ON TRANSFER. Regardless of whether the sale of the Exercised
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Shares has been registered under the Act or has been registered or qualified
under the securities laws of any state, the Company may impose restrictions upon
the sale, pledge or other transfer of the Exercised Shares (including the
placement of appropriate legends on stock certificates) if, in the judgment of
the Company and the Company's counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Act, the
securities law of any state, or any other law.
13. STOCK CERTIFICATE RESTRICTIVE LEGENDS. The stock certificates evidencing
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the Exercised Shares shall bear such restrictive legends as the Company and the
Company's counsel deem necessary or advisable under applicable law or pursuant
to this Agreement.
14. TAX ADVICE. Optionee hereby acknowledges and agrees that the Company has
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made no warranties or representations to Optionee with respect to the income tax
consequences of the transactions contemplated by this Agreement, including
(without limitation) the acquisition of the Option Shares upon exercise of this
Option in accordance with Paragraph 8, and the Optionee is in no manner relying
on the Company or the Company's representatives for an assessment of such tax
consequences.
15. WITHHOLDING OF TAX. In the event the Company determines that it or any
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Subsidiary may be required to withhold or collect, as a result of any exercise
of this Option or as a result of the disposition of the shares acquired upon
such exercise, any local, state, foreign or federal income or other tax,
Optionee agrees to make arrangements satisfactory to the Company to meet such
withholding or collection requirement.
16. BINDING EFFECT. Subject to the limitations set forth in Paragraph 9 of
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this Agreement, this Agreement shall be binding upon and inure to the benefit of
the executors, administrators, heirs, legal representatives, and successors and
assigns of the parties hereto; provided, however, that Optionee may not assign
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any of Optionee's rights under this Agreement other than as permitted under
Paragraph 9.
17. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in the
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Plan shall confer upon the Optionee any right to continue in the service of the
Company (or any Subsidiary employing or retaining Optionee) for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any such Subsidiary) or the Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's status as an Employee at any
time for any reason whatsoever, with or without cause.
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18. GOVERNING LAW. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Utah applicable to contracts entered
into and wholly to be performed within the State of Utah by Utah residents.
19. NOTICES. All notices and other communications under this Agreement shall
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be in writing. Unless and until the Optionee is notified in writing to the
contrary, all notices, communications and documents directed to the Company and
related to this Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
OEC Medical Systems, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for the Optionee and related to
this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.
Notices and communications shall be mailed by first class mail, postage
prepaid; documents shall be mailed by registered mail, return receipt requested,
postage prepaid. All mailings and deliveries related to this Agreement shall be
deemed received only when actually received unless properly mailed by registered
mail, return requested, in which event they shall be deemed received two days
after the date of mailing.
20. PLAN LIMITATIONS. This Agreement and the Option evidenced hereby are made
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and granted pursuant to the provisions of the Plan and shall accordingly be
subject to the terms, conditions, limitations and restrictions of the Plan. A
copy of the Plan shall be made available to Optionee upon written request to the
Company at the address specified in Paragraph 19. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding upon all persons having an
interest in this Option.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
OEC MEDICAL SYSTEMS, INC.
By: ___________________________________
Title: President, CEO
The Optionee hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
_______________________________________
OPTIONEE
Optionee's current address is:
______________________________
______________________________
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Soc. Sec. No. _____-____-_____
