Employee:
Grant Date:
No. Shares:
FMV Per Share on Date
of Grant:
Exercise Price
Per Share:
XXXXXXXX INDUSTRIES
1997 STOCK OPTION PLAN
EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT
1. Identification. This Employee Incentive Stock Option
Agreement (this "Agreement") is made by and between Xxxxxxxx
Industries, a California corporation (the "Company"), and
_________________ (the "Employee") as of _________________,
199__.
2. Recitals.
2.1 The Company maintains the Xxxxxxxx Industries 1997
Stock Option Plan (the "Plan") providing for the grant of
incentive stock options and nonqualified stock options to
directors and key employees of the Company.
2.2 Employee is a key employee of the Company to whom
options may be granted under the Plan.
2.3 The Stock Option and Compensation Committee (the
"Committee") of the Company has authorized the grant to Employee
of an option to purchase the Company's Common Stock upon the
terms and conditions hereinafter set forth.
2.4 In consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived
herefrom, the parties agree as set forth below.
3. Grant of Option. Pursuant to the action of the
Committee, and subject to the terms and conditions of this
Agreement and the terms and conditions of the Plan, the Company
grants to Employee an option to purchase all or any part of
______________________ (___) shares of the Company's authorized
and unissued Common Stock from the Company at the price of
_____________________ Dollars ($_____) per share (the "Option").
It is the intent of the Company that the Option constitute an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
4. Term of Option. The Option was granted on ________,
199__ (the "Grant Date"). Unless previously exercised pursuant
to Article 5 hereof and subject to earlier termination under
Section 6.6 or Article 7 of the Plan, the Option shall terminate
on, and shall not be exercisable after, the day before the
______________, (_____) anniversary of the Grant Date [not to
exceed ten (10) years].
5. Exercise.
5.1 Exercisability. Subject to the terms and
conditions of this Agreement, the Option shall become exercisable
in _______________ equal cumulative installments of __________
(_______) shares of the Company's common Stock (individually an
"Installment" and collectively the "Installments"). Employee may
exercise the Option with respect to each Installment on or after
each successive annual anniversary of the Grant Date according to
the following schedule:
Installment (number
of shares
becoming exercisable) Exercise Date
First
Anniversary
Second
Anniversary
Third
Anniversary
Fourth
Anniversary
Fifth
Anniversary
Sixth
Anniversary
Seventh
Anniversary
Eighth
Anniversary
Ninth
Anniversary
To the extent Employee does not in any year purchase
all or any part of the shares to which Employee is entitled,
Employee has the right cumulatively thereafter to purchase any
shares not so purchased and such right shall continue until the
Option terminates or expires. Fractional share interests shall
be disregarded.
5.2 Notice of Exercise. Employee shall exercise the
option by (i) notifying the Company of Employee's election to
exercise the Option, (ii) paying in full the purchase price as
provided in Section 5.3 hereof, and (iii) satisfying the tax
withholding requirements of Section 8.8 of the Plan.
5.3 Payment of Purchase Price. The purchase price for
any shares of Common Stock with respect to which Employee
exercises the Option shall be paid in full promptly after
Employee gives notice of exercise as provided in Section 5.2
hereof. The purchase price shall be paid: (a) in cash or by
check in United States dollars, or (b) if, and only if, the
Committee so authorizes in its sole discretion, at the time
Employee gives notice of exercise, by transferring to the Company
for redemption, Common Stock of the Company at its "Fair Market
Value" (as defined in the Plan), with share certificates duly
endorsed and accompanied by instruments of transfer with
signatures guaranteed. If Employee desires to pay the purchase
price for the shares by transferring to the Company Common Stock
for redemption, Employee shall so notify the Secretary of the
Company with the notice of Employee's election to exercise the
Option in accordance with Section 5.2 hereof. Promptly after
receipt of Employee's notice of exercise and request for payment
by redemption, the Company shall notify Employee of its decision
as to whether it will permit Employee to pay the purchase price
by transferring the Company's Common Stock to it for redemption.
If the Committee does not authorize the proposed payment by
redemption, Employee shall pay the purchase price in cash or by
check in United States dollars as provided above.
5.4 Limitation on Exercise. In the event Employee is
granted incentive stock options (whether under this Agreement or
any other incentive stock option agreement) and the aggregate
fair market value (determined as of the respective dates of grant
of such options) of the Common Stock with respect to which such
options are first exercisable in any calendar year exceeds
$100,000, the most recently granted options shall be treated as
nonqualified stock options to the extent of the excess. In
addition, in the case of simultaneously granted options, the
Company may, in the manner and to the extent permitted by law,
designate which shares are to be treated as stock acquired
pursuant to the exercise of an incentive stock option.
6. Issuance of Shares. Subject to Section 8.3 of the
Plan, promptly after the Company's receipt of notification of
exercise provided for in Section 5.2 hereof and Employee's
payment in full of the purchase price, the Company shall deliver,
or cause to be delivered, to Employee a certificate for the whole
number of shares with respect to which the Option is being
exercised by Employee. Shares shall be registered in the name of
Employee. If any law or regulation of the Securities and
Exchange Commission or of any other federal or state governmental
body having jurisdiction shall require the Company or Employee to
take any action prior to the issuance to Employee of the shares
of Common Stock of the Company specified in the written notice of
election to exercise, the date for the delivery of such shares
shall be adjourned until the completion of such action.
7. Termination Of Employment. If Employee's employment
with the Company is terminated for any reason the Option shall
terminate in accordance with and at the time set forth in Section
6.6 of the Plan. [If the Employee dies or becomes Permanently
Disabled (as defined in the Plan) while he or she is employed by
the Company, the Option shall become fully vested and
exercisable.]
8. Assignment or Transfer. The Option is not assignable
or transferable except by will or by the laws of descent and
distribution and during Employee's lifetime the Option may be
exercised only by Employee. No transfer of the Option by will or
by the laws of descent and distribution shall be effective, nor
shall any designation of a person who may exercise the Option
after Employee's death be effective to bind the Company unless
the Company is furnished with a written notice thereof and a copy
of the will or such other evidence as the Company deems necessary
to establish the validity of the transfer and the acceptance of
the terms and conditions of the Option by the transferee or
designee.
9. No Rights as Shareholder. Employee shall have no
rights as a shareholder with respect to shares of the Common
Stock covered by the Option until the date of the issuance of a
stock certificate or stock certificates evidencing issuance of
such shares pursuant to Employee's exercise of the Option. No
adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior
to the date such stock certificate is issued, except as provided
in Article 10 hereof and in Article 7 of the Plan.
10. Modification and Termination.
10.1 The rights of Employee under this Agreement are
subject to modification and termination as provided in the Plan.
10.2 The number of shares of Common Stock set forth in
Article 3 hereof and the Option are subject to adjustment,
acceleration, and possible early termination under Article 7 of
the Plan.
11. No Right to Employment. Nothing in this Agreement, the
Plan, or any instrument executed pursuant to the Plan shall
confer upon Employee the right to continue in the employ or
service of the Company, affect the right of the Company to
terminate the employment or services of Employee with or without
cause, or be evidence of any agreement or understanding, express
or implied, that the Company will employ or continue to employ
Employee in a particular position or at a particular rate of
remuneration.
12. Compliance with Securities Laws. At the time the
Option is exercised, the Company may require Employee to execute
any documents or take any action which may be then necessary to
comply with the Securities Act of 1933, as amended, and the rules
and regulations adopted thereunder, or any other applicable
federal or state laws for the purpose of regulating the sale and
issuance of securities. The Company reserves the right to change
its requirements with respect to enforcing compliance with
federal and state securities laws, including the request for, and
enforcement of, letters of investment intent, such requirements
to be determined by the Company in its judgment as necessary to
assure compliance with such laws. Such changes may be made, with
respect to the Option, upon exercise hereof, or prior to or after
the exercise of the Option. The Company shall not be obligated
to issue any shares upon the exercise of the Option unless the
issuance, in the judgment of the Board of Directors of the
Company, is in full compliance with all applicable laws,
governmental rules and regulations, undertakings of the Company
made under the Securities Act of 1933, as amended, any state
securities laws, and stock exchange agreements of the Company.
13. General Provisions.
13.1 Subject to Plan. The Option and all rights of
Employee thereunder are subject to, and Employee agrees to be
bound by all of the terms and conditions of the Plan,
incorporated herein by this reference. Employee acknowledges
receipt of a copy of the Plan, attached hereto as Exhibit A,
which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided
in other sections of this Agreement, provisions of the Plan that
confer discretionary authority on the Committee do not (and shall
not be deemed to) create any rights in Employee unless such
rights are expressly set forth herein or are otherwise in the
sole discretion of the Committee so conferred by appropriate
action of the Committee under the Plan after the date hereof.
13.2 Further Acts. Employee agrees to perform all
further acts and to execute and deliver any other and additional
documents as may be reasonably necessary to carry out the
provisions of this Agreement.
13.3 Notices. Any notice to be given under the terms
of this Agreement to the Company shall be in writing and
addressed to Xxxxxxxx Industries, 0000 Xxxxxxx Xxxxxx, Xx Xxxxx,
Xxxxxxxxxx 00000 to the attention of the Secretary and to
Employee at the address given beneath Employee's signature
hereto, or at such other address as either party may hereafter
designate in writing to the other.
13.4 Notice of Disposition. Employee agrees to notify
the Company of any sale or other disposition of any shares of
Common Stock received upon exercise of the Option, if such sale
or disposition occurs within two years after the Grant Date or
within one year after the date of such exercise.
IN WITNESS WHEREOF, this Agreement is executed by the
parties on the date and at the place indicated below.
"COMPANY"
XXXXXXXX INDUSTRIES,
a California corporation
Executed on ____________, 199_
at _______________, __________. By: _____________________
Its: ____________________
"EMPLOYEE"
Executed on ____________, 199_
at _______________, __________. _________________________
Signature
_________________________
Print Name
_________________________
Address
__________________________
City, State, Zip Code
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Employee Incentive Stock Option Agreement by Xxxxxxxx Industries,
I, ___________________________________, the spouse of the
Employee therein named, do hereby join with my spouse in
executing the foregoing Employee Incentive Stock Option Agreement
and do hereby agree to be bound by all of the terms and
provisions thereof and of the Plan.
DATED: ______________, 199__. ____________________________
Signature of Spouse
