EXHIBIT 4.3
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
ANY STATE SECURITIES LAWS AND MAY BE OFFERED, SOLD OR TRANSFERRED ONLY IF
REGISTERED PURSUANT TO THE PROVISIONS OF SUCH LAWS, OF IF IN THE OPINION OF
COUNSEL TO THE COMPANY AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
SYLVAN LEARNING SYSTEMS, INC.
1997 SYLVAN TECHNOLOGY CENTER (STC)
STOCK OPTION PLAN
OPTION AGREEMENT
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FOR THE PURCHASE OF COMMON STOCK OF
SYLVAN LEARNING SYSTEMS, INC.
Expiring on
(as hereinafter defined)
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Optionholder: Option Number:
Total Number of Shares Covered by this Option Agreement: Shares *
Exercise Dates and Amounts:
1/st/ Installment: , 199 Shares *
2/nd/ Installment: , 199 Shares *
3/rd/ Installment: , 200 Shares *
TOTAL: Shares
(*) Subject to adjustment as provided in Section 6 hereof.
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THIS CERTIFIES THAT, for value received, _______ (the "Optionholder") is
entitled to purchase, in the aggregate, from Sylvan Learning Systems, Inc., a
Maryland corporation (the ACompany@), at any time on or before the Expiration
Date, _______ ( ) shares of Common Stock, $.01 par value, of the Company,
subject to adjustment as provided in Section 3 hereof, at the Purchase Price
(as hereinafter defined) in lawful money of the United States of America,
subject to the provisions, limitations and restrictions of Sections 3 and 5
hereof.
SECTION 1. Definitions. For all purposes of this Option the following
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terms shall have the meanings indicated:
A Commission@ shall mean the Securities and Exchange Commission, or any
other Federal agency then administering the Securities Act.
An Expiration Date@ shall mean ________.
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"Optionholder" shall mean the registered holder or holders of the Option
and any related Option Shares.
"Option" shall mean this Option and any Option issued in exchange,
transfer or replacement of this option.
"Option Shares" shall mean the shares of Common Stock purchased or
purchasable by the registered holder of the Option upon exercise hereof
pursuant to Section 3 hereof.
"Purchase Price" shall mean the Purchase Price per share of Common Stock
set forth in Section 2.
"Securities Act" shall mean the Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.
"Transfer" as used in Section 5 shall include any disposition of any
Option or Option Shares, or of any interest in either thereof which would
constitute a sale thereof within the meaning of the Securities Act.
All terms used in this Option which are not defined in Section 1 have the
meanings respectively set forth elsewhere in this Option, or in the Sylvan
Learning Systems, Inc., 1997 Sylvan Technology Center (STC) Stock Option Plan.
SECTION 2. Purchase Price. The Purchase Price at which Optionholder may
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exercise this Option shall be a price per share equal to $____, subject to
adjustment as provided in Section 6 hereof.
SECTION 3. Exercise of Option, Etc.
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3.1. Number of Shares for Which Option is Exercisable; Exercise Dates;
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Registration. The aggregate number of Option Shares for which this Option may
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be exercised prior to its expiration shall be _______, subject to adjustment
from time to time for any stock splits, stock dividends or reverse stock splits
as provided in Section 6 hereof. This Option shall be exercisable as to
thirty-three and one-third percent (33 1/3%) of the Option Shares beginning
on __________ and as to an additional 33 1/3% of the Option Shares on
________ of each of the next two succeeding years, on the express condition
that on such date(s), the Optionholder shall be operating Sylvan Technology
Center #___________ pursuant to a written agreement between the Company and
the Optionholder authorizing Optionholder to operate such Sylvan Technology
Center.
3.2. Procedure for Exercise of Option. To exercise this Option in whole
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or in part, the registered holder hereof shall deliver to the Company at its
principal executive offices in Baltimore, Maryland (or such other office of the
Company in the United States as the Company may designate by notice in writing
to the registered holder of this Option) (i) an Option Certificate completed to
specify the portion of the Option as to which such holder is electing exercise;
provided, however, that no fractional shares of Common Stock shall be issued
upon exercise of this Option, so that this Option must be exercised for whole
numbers of Common Stock, and, provided further, that the Option may not be
exercised for fewer than 100 shares of Common Stock unless the number of shares
then available for purchase pursuant to the Option is less than 100, in which
case the full number available must be exercised, (ii) cash or a certified or
official bank check, payable to the order of the Company, in an amount equal to
the then aggregate Purchase Price of the shares of Common Stock being purchased
and (iii) if this Option is being exercised in whole or the last fraction of
this Option is being exercised, this Option. Upon receipt thereof, such holder
shall be deemed to be the holder of record of the Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates
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representing such Common Stock shall not then be actually delivered to such
holder, and the Company shall, as promptly as practicable direct the Transfer
Agent for the Common Stock to execute or cause to be executed and deliver to
such holder, or as such holder may direct, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in said
Option Certificate. Each stock certificate so delivered shall be in such
denomination as may be requested by the registered holder hereof. If this
Option shall have been exercised only in part, the Company shall, at the time
of delivery of said stock certificate or certificates, deliver to such holder a
certificate evidencing the portion of this Option which remains exercisable.
The Company shall pay all expenses, taxes and other charges payable in
connection with the preparation, execution and delivery of stock certificates
pursuant to this Section, except that, in case such stock certificates shall be
registered in a name or names other than the name of the registered holder of
this Option, funds sufficient to pay any stock transfer taxes which shall be
payable upon the execution and delivery of such stock certificate or
certificates shall be paid by the registered holder hereof to the Company at
the time of delivering this Option to the Company as mentioned above.
If the Common Stock is registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, the Optionholder may pay the exercise price,
in whole or in part, by delivery of a properly executed exercise notice,
together with irrevocable instructions: (i) to a brokerage firm approved by the
Company to deliver promptly to the Company the aggregate amount of sale or loan
proceeds to pay the exercise price and any withholding tax obligations that may
arise in connection with the exercise, and (ii) to the Company to deliver the
certificates for such purchased shares directly to such brokerage firm.
3.3. Transfer Restriction Legend. At the time of exercise of this
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Option, each certificate for Option Shares issued upon exercise of this Option
shall bear the following legend (and any additional legend required by any
securities exchange upon which such Option Shares may, at the time of such
exercise, be listed) on the face thereof:
These securities have not been registered under the Securities Act of
1933 or under any state securities laws and may be offered, sold or
transferred only if registered pursuant to the provisions of such
laws, or if in the opinion of counsel to the Company, an exemption
from such registration is available.
3.4. Acknowledgment of Continuing Obligation. The Company will, at the
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time of the exercise of this Option, in whole or in part, upon request of the
holder hereof, acknowledge in writing its continuing obligation to such holder
in respect of any rights to which such holder shall continue to be entitled
after such exercise in accordance with this Option, provided, that the failure
of such holder to make any such request shall not affect the continuing
obligation of the Company to such holder in respect of such rights.
3.5. Character of Option Shares. All shares of Common Stock issuable
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upon the exercise of this Option shall, upon payment of the applicable Purchase
Price, be duly authorized, validly issued, fully paid and non-assessable; and
without limiting the generality of the foregoing, the Company covenants and
agrees that it will from time to time take all such action as may be necessary
to assure that the par value per share of Common Stock is at all times equal to
or less than the then effective Purchase Price.
3.6 Option Not An Incentive Stock Option. This Option is not intended to
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qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the ACode@).
3.7 Withholding Taxes. Upon exercise of this Option or upon the
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disposition by Optionholder or Optionholder=s permitted successors in interest
of shares of Common Stock acquired pursuant to the exercise of this Option, the
Company shall have the right to require Optionholder or Optionholder=s
permitted successors in interest to pay the Company the amount of any taxes
which the Company may be required to withhold with respect to such transaction.
Such obligation may be satisfied
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by delivering to the Company shares of Common Stock having an aggregate fair
market value equal to the amount of the required withholding.
SECTION 4. Ownership of this Option.
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4.1. Registered Owner. The Company may deem and treat the person or
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entity in whose name this Option is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any
notice to the contrary.
4.2. Replacement. Upon receipt by the Company of evidence reasonably
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satisfactory to it of the loss, theft, destruction or mutilation of this
Option, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon surrender and cancellation of this
Option, if mutilated, the Company will make and deliver a new Option of like
tenor, in lieu of this Option. This Option shall be promptly cancelled by the
Company upon the surrender hereof in connection with any replacement. The
Company shall pay all expenses, taxes (other than any stock transfer taxes and
income taxes) and other charges payable in connection with the preparation,
execution and delivery of any replacement Option pursuant to this Section 4.
SECTION 5. Restrictions on Exercise and Transfer.
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5.1. Not Transferable. Notwithstanding any provisions contained in this
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Option to the contrary, this Option shall not be transferable except pursuant
to the laws of descent and distribution.
Notwithstanding any provisions contained in this Option to the contrary,
this Option shall not be exercisable except upon the conditions specified in
this Section 5, which conditions are intended to insure compliance with the
provisions of the Securities Act in respect of the exercise or transfer of such
Option or transfer of such Option Shares. The holder of this Option agrees that
it will not (i) exercise this Option prior to delivery to the Company of an
opinion of such counsel as described in clause (1) of subsection 5.2, or until
registration of the related Option Shares under the Securities Act has become
effective, or (ii) transfer such Option Shares prior to delivery to the Company
of an opinion of such counsel as described in clause (1) of subsection 5.2, or
until registration of such Option Shares under the Securities Act has become
effective.
5.2. Notice of Intention to Exercise; Opinion of Counsel. The holder
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of this Option agrees that prior to any exercise of this Option or any transfer
of the related Option Shares, such holder will give written notice to Company
of its intention to effect such exercise and/or transfer, and the Company
promptly will seek the opinion of Piper & Marbury, counsel to the Company. as
to the necessity or non-necessity for registration under the Securities Act in
connection with such exercise and/or transfer. The following provisions shall
in apply:
(1) If in the opinion of such counsel, the proposed exercise and/or
proposed transfer of this Option and/or the proposed transfer of such Option
Shares may be effected without registration under the Securities Act of this
Option and/or such Option Shares, the holder of this Option shall be entitled
to exercise or transfer this Option and/or transfer such Option Shares in
accordance with the intended method of disposition specified in the notice
delivered by such holder to the Company.
(2) If in the opinion of such counsel, the proposed exercise or
transfer of this Option and/or the proposed transfer of such Option Shares may
not be effected without registration under the Securities Act of this Option
and/or such Option Shares, the holder of this Option shall not be entitled to
exercise or transfer this Option and/or transfer such Option Shares until such
registration is effective.
5.3. Suspension of Right to Exercise. No part of this Option that is
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otherwise exercisable shall be subject to exercise during any period of time
that the Optionholder=s STC is
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not being operated in accordance with the standards and procedures applicable
to STC operations, and has been so advised in writing by Sylvan. This
includes, but is not limited to, the designation of the Optionholder=s STC for
QPIP review and oversight by Sylvan.
SECTION 6. Adjustment of Purchase Price.
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6.1 Stock Splits, Stock Dividends and Reverse Splits. In case at any
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time the Company shall subdivide its outstanding shares of Common Stock into a
greater number of shares, or issue shares of Common Stock in a stock dividend,
or issue shares of capital stock of the Company declared and payable as stock
dividends in lieu of the cash dividends, the Purchase Price in effect
immediately prior to such subdivision or dividend shall be proportionately
reduced and the number of Option Shares purchasable pursuant to this Option
immediately prior to such subdivision or dividend shall be proportionately
increased, and conversely, in case at any time the Company shall combine its
outstanding shares of Common Stock into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall be
proportionately increased and the number of Option Shares purchasable upon the
exercise of this Option immediately prior to such combination shall be
proportionately reduced. Except as provided in this subparagraph 6.1, no
adjustment in the Purchase Price and no change in the number of Option Shares
so purchasable shall be made pursuant to this Section 6 as a result of or by
reason of any such subdivision, dividend or combination.
6.2. Effect of Reorganizations and Asset Sales. If any capital
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reorganization or reclassification of the capital stock of the Company, or
consolidation or merger of the Company with another Company, or the sale or
transfer of all or substantially all of its assets to another Company, or any
divisive organization by way of a spin-off. split-up or otherwise, shall be
effected in such a way that holders of Common Stock shall become entitled to
receive stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such transaction, lawful and adequate provision
shall be made whereby each holder of this Option shall thereafter have the
right to receive upon the terms and conditions specified herein and in lieu of
or in addition to the shares of the Common Stock of the Company immediately
theretofore receivable upon exercise of this Option, such shares of stock,
securities, assets or other property or cash as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore so
receivable had such transaction not taken place; and in any such case
appropriate provision shall be made with respect to the rights and interests of
such holder to the end that the provisions hereof (including, without
limitation, provisions for adjustment of the Purchase Price and the number of
shares issuable upon exercise and for the registration of the Option Shares as
provided in Section 5) shall thereafter be applicable, as nearly as may be
practicable, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of this Option. The Company shall not
effect any such transaction unless prior to or simultaneously with the
consummation thereof each successor Company (if other than the Company)
resulting from such transaction or the entities or entity purchasing such
assets shall assume by written instrument executed and mailed or delivered to
each holder, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Optionholder may be entitled to receive, and containing its or their express
assumption of the due and punctual performance and observance of every
provision of this Option to be performed and observed by the Company and of all
(or the appropriate part) of the liabilities and obligations of the Company
hereunder.
6.3. Accountants' Certificate. Upon each adjustment of the Purchase
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Price and upon each change in the number of shares of Common Stock issuable
upon the exercise of this Option, and in the event of any change in the rights
of the holder of this Option by reason of other events herein set forth, then
and in each such case, the Company will promptly obtain a certificate of a firm
of independent certified public accountants of recognized standing selected by
the Company's Board Directors (who may be the regular auditors of the Company),
stating the adjusted Purchase Price and the new number of shares so issuable,
or specifying the other shares of stock, securities or assets and the amount
thereof
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receivable as a result of such change in rights, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The Company will promptly mail a copy of such
accountants certificate to the registered holder of this Option. The
certificate of such firm of independent public accountants shall be conclusive
evidence of the correctness of the computation with respect to any such
adjustment of the Purchase Price and any such change in the number of such
shares so issuable.
SECTION 7. Special Agreements of the Company. The Company covenants and
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agrees that:
7.1. Will Reserve Shares. The Company will reserve and set apart and
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have at all times, free from pre-emptive rights, a number of shares of
authorized but unissued Common Stock deliverable upon the exercise of this
Option of or of any other rights or privileges provided for herein sufficient
to enable it at any time to fulfill all its obligations thereunder.
7.2. Will Avoid Certain Actions. The Company will not. by amendment of
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its Charter or through any reorganization, transfer of assets, consolidation,
merger, issue or sale of securities or otherwise, avoid or take any action
which would have the effect of avoiding the observance of performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in carrying out all of the provisions of this Option
and in taking of all such action as may be necessary or appropriate in order to
protect the rights of the holders of this Option against dilution or other
impairment.
7.3. Will Bind Successors. This Option shall be binding upon any
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corporation succeeding to the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets.
7.4. Will Seek Registration of Option Shares. The Company will use its
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reasonable best efforts to cause the Option Shares issued or issuable to the
Optionholder upon the due exercise of the Option to be registered for sale
under the appropriate provisions of the Securities and Exchange Act of 1934.
SECTION 8. Termination/Expiration.
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8.1 In the event of the termination of Optionholder=s operation of the
STC described in Section 3.1 of this Option Agreement or the termination of the
Optionholder=s STC agency relationship with Sylvan for Cause or at the election
of the Optionholder, any unexercised portion of this Option, whether then
exercisable or not, shall expire in its entirety as of the date of termination.
In the event of the termination of Optionholder=s operation of the STC
described in Section 3.1 of this Option Agreement or the termination of the
Participant=s STC agency relationship with Sylvan due to the Optionholder=s
death or disability, or due to the transfer of the STC operation to a
successor STC operator/agent, the unexercised portion of this Option shall
expire three (3) months after the date of termination, provided, however, that
this Option shall be exercisable only to the extent that installments thereof
are exercisable as of the date of termination, death, disability, or transfer.
This Option shall expire at the end of such three (3) month period to the
extent not exercised within that period.
8.2 Notwithstanding anything to the contrary contained in Section 8.1
above, in no event shall any part of this Option be exercisable after the
Expiration Date.
SECTION 9. Covenant Not to Compete. The Optionholder covenants, agrees
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and promises that during the term of any agreement between Optionholder and the
Company pursuant to which Optionholder is authorized to operate an STC, and for
a period of two years thereafter, Optionholder shall not itself deliver or
enter into any agreement with any organization engaged in delivery of computer-
based tests which are competitive with the tests deliverable in an STC, at any
location that is within twenty-five (25) miles of the Optionholder=s STC or any
other STC in the United States. Should any
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part of the restriction contained in this Section 9 be found to be
unenforceable by virtue of its scope in terms of area, business activity
prohibited or length of time and should such part be capable of being made
enforceable by reduction of any or all thereof, the Optionholder and the
Company agree that the same shall be enforced to the fullest extent permissible
under the law. The running of any period of time specified above in this
Section 9 shall be tolled and suspended for any period of time in which the
Optionholder is found by a court of competent jurisdiction to have been in
violation of any such restrictive covenant. The Optionholder expressly agrees
that the existence of any claim it may have against the Company shall not
constitute a defense to the enforcement by the Company of the covenants in this
Section 9. The Optionholder acknowledges that the Company's remedy at law for
the Optionholder's breach of the covenants contained in this Section 9 would be
inadequate and that, accordingly, in such events, the Company shall be entitled
to immediate injunctive relief.
SECTION 10. Notices. Any notice or other document required or permitted
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to be given or delivered to the Optionholder shall be delivered at, or sent by
certified or registered mail to:
Attn: ________________________
or such other address as shall have been furnished to the Company in writing by
the Optionholder. Any notice or other document required or permitted to be
given or delivered to the Company shall be delivered at, or sent by certified
or registered mail to, the principal office of the Company, Attn: General
Counsel, at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or such other
address as shall have furnished to the Optionholder by the Company.
SECTION 11. No Rights as Stockholder; Limitation of Liability. This
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Option shall not entitle any holder hereof to any of the rights of a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Purchase Price or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
SECTION 12. Investment Representation. Optionholder understands and
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agrees that the right to acquire shares of Common Stock pursuant to this Option
is granted herein to Optionholder for investment purposes and not for purposes
of resale or distribution. Any shares issued to Optionholder upon the exercise
of the Option shall be subject to such restrictive provisions as the Board or
the Committee may from time to time deem necessary or appropriate in order to
ensure compliance with all applicable securities and other laws and rules and
regulations.
SECTION 13. Law Governing. This Option shall be governed by, and
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construed and enforced in accordance with, the laws of the State of Maryland
without regard to the principles of conflict of laws thereof.
SECTION 14. Miscellaneous. This Option and any provision hereof may be
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changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought. The
headings in this Option are for purposes of reference only and shall not affect
the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, Sylvan Learning Systems Inc., has caused this Option
to be signed by its duly authorized officer under its corporate seal, and to be
dated on _____________.
Corporate Seal SYLVAN LEARNING SYSTEMS, INC.
By:
O. Xxxxxx Xxxxx
Vice President and General Counsel
WITNESS: OPTIONHOLDER:
Date:
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