EXHIBIT 4.2
XXXXXXXXXX LABORATORIES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement, made as of _____________, 19__, by and between XXXXXXXXXX
LABORATORIES, INC., a Texas corporation (the "Company"), and
______________________ ("Employee").
W I T N E S S E T H :
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WHEREAS, it has been determined (i) that Employee is eligible to receive a
nonqualified stock option under the Company's 1985 Stock Option Plan, as amended
(the "Plan"), and (ii) that such an option should be granted to Employee;
NOW, THEREFORE, the Company and Employee hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
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the following meanings, respectively:
(a) "Affiliate" shall have the meaning set forth in Article I, Section
2(a) of the Plan and shall include any party now or hereafter coming within
that definition.
(b) "Commencement Date" shall mean the date which is one (1) year from
the date of this Agreement.
(c) "Common Stock" shall have the meaning set forth in Article I,
Section 2 (e) of the Plan.
(d) "Expiration Date" shall mean the date which is ten (10) years from
the date of this Agreement.
2. Option. The Company hereby grants to Employee the option to
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purchase, on the terms hereinafter set forth, ______ shares of the Company's
Common Stock at a price of $____ per share during the period beginning on the
Commencement Date and ending on the first to occur of (a) the Expiration Date or
(b) the date on which the employment of Employee by the Company or any of its
Affiliates terminates for any reason; provided, however, that if such employment
terminates on or after the Commencement Date and on or before the Expiration
Date, other than by reason of Employee's death or disability, then Employee may
exercise this option, to the extent he was entitled to do so at the date of such
termination of employment, at any time within thirty (30) days after the date of
such termination but not after the Expiration Date; and provided further, that
if such employment terminates on or after the Commencement
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Date and on or before the Expiration Date by reason of Employee's becoming
permanently and totally disabled (within the meaning of Section 22(e) (3) of the
Internal Revenue Code of 1986, as amended), or by reason of amended), or by
reason of Employee's death, then Employee (or Employee's legal representative,
if Employee is legally incompetent), the executor or administrator of Employee's
estate or anyone who shall have acquired this option by will or pursuant to the
laws of descent and distribution may exercise this option, to the extent
Employee was entitled to do so at the date of such termination, at any time
within one (1) year after such termination but not after the Expiration Date.
Notwithstanding anything to the contrary herein, this option shall terminate
immediately upon the termination of Employee's employment on account of fraud,
dishonesty or the performance of other acts detrimental to the Company or an
Affiliate, or if, following the date of termination of Employee's employment,
the Company determines that there is good cause to cancel this option. A
transfer of employment among the Company and any of its Affiliates without
interruption of service shall not be considered a termination of employment for
purposes of this Agreement.
3. Exercise During Employment. Except as provided in Section 2 hereof,
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this option may not be exercised unless Employee is at the time of exercise an
employee of the Company or an Affiliate.
4. Exercisability. Subject to the provisions of Sections 2 and 3 hereof,
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this option may be exercised during the period beginning on the Commencement
Date and ending on the Expiration Date in accordance with the following
schedule:
(a) that number of whole shares of Common Stock which equals or most
closely approximates (but does not exceed) 25% of the total number of
shares covered by this option may be purchased in whole at any time, or in
part from time to time, on or after the Commencement Date;
(b) an additional number of whole shares of Common Stock which equals
or most closely approximates (but does not exceed) 25% of the total number
of shares covered by this option may be purchased in whole at any time, or
in part from time to time, on or after the date which is two (2) years
after the date of this Agreement;
(c) an additional number of whole shares of Common Stock which equals
or most closely approximates (but does not exceed) 25% of the total number
of shares covered by this option may be purchased in whole at any time, or
in part from time to time, on or after the date which is three (3) years
after the date of this Agreement; and
(d) all remaining shares of Common Stock covered by this option may
be purchased in whole at any time, or in part from time to time, on or
after the date which is four (4) years after the date of this Agreement.
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Notwithstanding any contrary indication in this Agreement, (i) no fractional
shares of Common Stock may be purchased upon exercise of this option, and (ii)
upon the occurrence of a Change in Control (as defined in the Plan) prior to the
termination of this option, this option shall immediately and automatically
become exercisable with respect to all of the shares of Common Stock, if any, as
to which it was not already exercisable, and this provision shall be applicable
regardless of whether such Change in Control occurs before or after the
Commencement Date; provided, however, that this provision shall not be
interpreted to increase the number of shares of Common Stock for which this
option may be exercised by Employee if his employment by the Company or any of
its Affiliates shall have terminated prior to the occurrence of such Change in
Control.
5. Manner of Exercise. This option may be exercised by written notice
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signed by the person entitled to exercise the same and delivered to the
President of the Company or sent by United States registered mail addressed to
the Company (for the attention of the President) at its corporate office in
Irving, Texas. Such notice shall state the number of shares of Common Stock as
to which this option is exercised and shall be accompanied by payment of the
full purchase price of such shares, plus the amount of any federal, state or
local taxes required by law to be paid or withheld in connection with such
exercise.
6. Payment. The purchase price for shares of Common Stock purchased upon
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exercise of this option shall be paid in cash or by check in United States
dollars.
7. Delivery of Shares. Delivery of the certificate or certificates
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representing the shares of Common Stock purchased upon exercise of this option
shall be made promptly after the Company's receipt of notice of exercise and
payment. If the Company so elects, its obligation to deliver shares of Common
Stock upon the exercise of this option shall be conditioned upon its receipt
from the person exercising this option of any additional documents that, in the
opinion of the Company and its legal counsel are required in order to comply
with applicable securities laws.
8. Adjustments. In the event that, before delivery by the Company of all
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the shares of Common Stock in respect of which this option is granted, the
Company shall have effected a Common Stock split or a dividend payable in Common
Stock, or the outstanding Common Stock of the Company shall have been combined
into a smaller number of shares, the shares of Common Stock still subject to
this option shall be increased or decreased to reflect proportionately the
increase or decrease in the number of shares outstanding, and the purchase price
per share shall be decreased or increased to make the aggregate purchase price
for all the shares then subject to this option the same as immediately prior to
such stock split, stock dividend or combination. In the event of a
reclassification of the shares of Common Stock not covered by the foregoing, or
in the event of a liquidation or reorganization (including a merger,
consolidation or sale of assets) of the Company, the
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Board of Directors of the Company shall make such adjustments, if any, as it may
deem appropriate in the number, purchase price and kind of shares still subject
to this option.
9. Transferability. This option is not transferable otherwise than by
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will or the laws of descent and distribution, and during the lifetime of
Employee this option is exercisable only by Employee or, if Employee is legally
incompetent, by Employee's legal representative.
10. Employment. Nothing in this Agreement confers upon Employee any right
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to continue in the employ of the Company or any Affiliate, nor shall this
Agreement interfere in any manner with the right of the Company or any Affiliate
to terminate the employment of Employee with or without cause at any time.
11. Option Subject to Plan. By execution of this Agreement, Employee
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agrees that this option and the shares of Common Stock to be received upon
exercise hereof shall be governed by and subject to all applicable provisions of
the Plan.
12. Construction. This option is not intended to be treated as an
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incentive stock option under Section 422A of the Internal Revenue Code of 1986,
as amended. This Agreement is governed by, and shall be construed and enforced
in accordance with, the laws of the State of Texas. Words of any gender used in
this Agreement shall be construed to include any other gender, unless the
context requires otherwise. The headings of the various sections of this
Agreement are intended for convenience of reference only and shall not be used
in construing the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
XXXXXXXXXX LABORATORIES, INC.
By
_________________________________________
, President
____________________________________________
Signature of Employee
____________________________________________
(Type or print name of Employee)
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RECORD OF EXERCISE:
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DATE NO. OF SHARES EXERCISED INITIAL/AGREED
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