Exhibit 10. 2
VALLEY FORGE SCIENTIFIC CORP.
STOCK OPTION AGREEMENT
PURSUANT TO
NON-QUALIFIED STOCK OPTION PLAN
This STOCK OPTION AGREEMENT is dated as of the ____ day of __________,
199__ by and between Valley Forge Scientific Corp. (the "Company") and
______________ (the "Option Holder"), governing the grant by the Company to the
Option Holder of a Non-Qualified Stock Option to purchase an aggregate of
_______ shares ("Option Shares") of the no par value common stock ("Common
Stock") of the Company under the Valley Forge Scientific Corp. Non-Qualified
Stock Option Plan ("Plan").
ARTICLE I
DEFINITIONS
1.1 In this Non-Qualified Stock Option Agreement (hereinafter
referred to as the "Agreement") unless the context otherwise requires,
references to the following words shall bear the following meanings:
"Adoption Date" shall mean the date upon which the Plan
was adopted by the Board of Directors of the Company.
"Board" shall mean the Board of Directors of the Company or
a duly constituted committee thereof.
"Company" shall mean Valley Forge Scientific Corp.
"Date of Grant" shall mean the date upon which an Option is
granted by the Company pursuant to Article V of the Plan.
"Market Value" shall mean the fair market value of a share of
Common Stock on the Date of Grant.
"Option" shall mean a right to subscribe for Shares granted to
a Qualified Person pursuant to the Plan.
"Option Holder" shall mean a Qualified Person or a former
Qualified Person who holds an Option in accordance with the terms and
provisions of the Plan.
"Option Period" shall mean the period commencing on the
Date of Grant and expiring on the day preceding the tenth anniversary of the
Date of Grant.
"Option Shares" shall mean unissued Shares in respect of which
Options are granted.
"Participant" shall mean any Qualified Person to whom an Option is
granted.
"Plan" shall mean Valley Forge Scientific Corp. Non-Qualified Stock
Option Plan adopted on July 6, 1988.
"Qualified Person" shall mean any officer, employee, director
or consultant of the Company.
"Shares" shall mean the authorized no par value shares of Common
Stock of the Company.
"Subscription Price" shall mean the price payable for a Share
on the exercise of an Option, as determined in accordance with Article VI of
the Plan.
ARTICLE II
CONFIRMATION OF GRANT AND SUBSCRIPTION PRICE.
2.1. Subject to the terms and conditions of the Plan, the provisions of
which are hereby made a part of this Agreement, and the return of this
Agreement signed by the Option Holder, the Company hereby confirms it
grant to the Option Holder of an Option to purchase ________ Shares at the
Subscription Price of $______ per Share.
ARTICLE III
3.1. The schedule for the exercise of Options granted pursuant to this
Agreement shall be as follows:
No. of Date First Available Expiration Date of
Shares For Exercise Right of Exercise
_______ ______________ ______________
(a) The number of Shares as to which the Option becomes available
for exercise may be purchased after the date first available for exercise
indicated above, subject to the provisions hereof, and at any time prior to the
expiration date of the Option indicated above.
ARTICLE IV
RESTRICTION OF EXERCISE
4.1. The Option may be exercised only with respect to full Shares.
No fractional Shares shall be issued. The Option may not be exercised in
whole or in part and no Shares subject to the Option shall be issued, if any
requisite approval or consent of any governmental authority of any kind
having jurisdiction over the exercise of the Options shall not have been
secured.
4.2. In addition, the Company may (but need not) require as a
condition to the exercise of the Option in whole or in part, that the Option
Holder (or any person exercising the Option after the death of the Option
Holder in accordance with the provisions os Section 6.1(b) hereof) represent
to the Company in writing that the Shares to be acquired upon such exercise
are to be acquired for the account of the Option Holder (or for the account of
any person exercising the Option after the death of the Option Holder in
accordance with the provisions of Section 6.1(b) hereof) for investment only
and not with a view to distribution of any such Shares.
4.3. All Shares acquired by the Option Holder pursuant to this
Agreement shall be subject to the restrictions contained in the By-Laws of the
Company, as may be amended or restated from time to time.
4.4. No Option may be exercised later than ten (10) years after the
Date of Grant.
4.5. An Option shall only be exercised during the Option Period,
except as provided in Article VI herein.
ARTICLE V
MANNER OF EXERCISE
5.1. To the extent the Option shall have become and remains
exercisable and subject to such administrative regulations established by the
Board pursuant to the Plan, the Option may be exercised in whole or in part,
by the service of written notice, in the form attached hereto as Appendix A,
by the Option Holder upon the Secretary of the Company specifying the
number of shares with respect to which the Option is being exercised,
together with full payment in United States Dollars for the Subscription Price
for such Shares as herein provided. The date of exercise of the Option shall
be the date on which said written notice and full payment are received by the
Secretary pursuant to this Section 5.1.
5.2. In the event that the Option shall be exercised by a person other
than the Option holder in accordance with the provisions of Section 6.1(b) of
Article VI, such person shall furnish the Company either evidence
satisfactory to the Company of his or her right to exercise the Option.
5.3. The Company may require the Option Holder or other person
exercising the Option
in accordance with the provisions of Section 6.1(b) of
Article VI, to furnish or execute such documents as the Company shall deem
necessary to evidence such exercise, to determine whether registration is then
require under the Securities Act of 1933, or any other applicable law.
5.4. The obligation of the Company to deliver stock certificates evidencing
Shares upon the exercise of any Option shall be subject to applicable federal,
state, local and foreign securities and tax laws.
5.5. If an offer shall be made to the holders of Shares to acquire such
shares or a plan shall be proposed whereunder the Company may, or shall
have become a subsidiary of another company, on such an offer becoming
unconditional or such plan being sanctioned by the Court, the Board shall
forthwith give notice thereof in writing to each participant (or as the case
may be his personal representative) who shall be entitled:
(a) Within the period of six (6) months after the date on
which such an offer becomes unconditional to exercise his Option up to the
full extent to which it remains unexercised; provided that if during such
period of six (6) months such other company exercises its rights of
compulsory acquisition of Shares (including any Shares issued upon the
exercise of Options) and gives notice to the Participant that it intends to
exercise such right as regards all Shares issued upon the exercise of Options
prior to a specified date (not being earlier than one (1) month after the date
of such notice) the Option shall only remain exercisable until the specified
date; and
(b) Within a period of one (1) month after the date on which
such a plan is approved by the stockholders, to exercise his Option up to the
fullest extent on which such a plan is approved by the stockholders, provided
that any right to exercise an Option contained in this Section 5.6 shall not be
exercisable later than the expiration of the Option Period.
5.6. If notice is duly given of a resolution for the voluntary winding
up of the Company, a Participant may forthwith and before the
commencement of the winding-up exercise his Option up to the full extent to
which it remains unexercised (but so that such exercise shall be conditional
upon such resolution being passed) provided that any right to exercise an
Option contained in this Section 5.6. shall not be exercisable later than the
expiration of the Option Period.
ARTICLE VI
TERMINATION OF OPTIONS
6.1. Except as otherwise stated herein, the Option to the extent not
heretofore exercised shall terminate upon either of the following dates,
whichever shall occur first:
(a) The expiration of three (3) months after the date which
employment of the Option Holder by the Company or any of its subsidiaries
is terminated (except if such termination be by reason of death or permanent
or total disability). The granting of an Option
to a Qualified Person does not alter in any way the existing rights of the
Company or any of its subsidiaries to terminate the employment of such person
at any time for any reason, nor does it confer upon such person any rights or
privileges, except as specifically provided for in this Agreement.
(b) The expiration of six (6) months following the date of
death of the Participant, subject to the Participant being in the employ of the
Company or any of its subsidiaries on the date of death. Under such
circumstances the executors and administrators of the Option Holder may
exercise the Option within six (6) months following the date of the death of
the Option Holder, as to any Shares not theretofore exercised during the
lifetime of the Option Holder.
(c) The expiration of ten (10) years from the Date of Grant by
the Company to the Option Holder of the Option.
ARTICLE VII
NON-ASSIGNABILITY
7.1. This Option is non-assignable by the Option Holder, except in
the event of his or her death, as provided in section 6.1(b) of Article VI, as
set forth above.
ARTICLE VIII
RIGHTS AS A STOCKHOLDER
8.1. The Option Holder shall have no rights as a stockholder with
respect to any Shares covered by the Option until the date of exercise of the
Option as provided in Article V herein. No adjustments shall be made for
dividends or to other rights which may accrue to stockholders of the
Company prior to such date.
ARTICLE IX
CAPITAL ADJUSTMENTS
9.1. If and to the extent that the number of Shares shall be increased
or reduced either by change in par value, stock split, reverse stock split,
reclassification, distribution of a dividend payable in stock, or the like, the
number of Shares subject to this Option and the Subscription Price per Share
shall be proportionately adjusted. If the Company is reorganized or
consolidated or merged with another entity, the Option Holder shall be
entitled to receive Options theretofore not exercised covering Shares or such
other ownership interests of such reorganized, consolidated, or merged entity
in the same proportion at an equivalent price, and subject to the same terms
and conditions.
ARTICLE X
NOTICE
10.1. All notices to the Secretary of the Company hereunder shall
be in writing and shall be made by personal delivery or by certified mail,
return receipt requested, to the Secretary at the then principal office of
the Company.
ARTICLE XI
INTERPRETATION OF AGREEMENT: GOVERNING LAW
11.1. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company and the Option Holder
have duly executed this Agreement.
VALLEY FORGE SCIENTIFIC CORP.
ATTEST:
___________________ By: ____________________________
WITNESS: OPTION HOLDER
____________________ _____________________________
APPENDIX A
FORM OF EXERCISE OF NON-QUALIFIED STOCK OPTIONS
Secretary
Valley Forge Scientific Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇:
I wish to exercise Options for ___________ shares of common stock
of Valley Forge Scientific Corp. now available to me under the grant of
________________ shares made to me effective as of __________________ at
$_______ per share pursuant to the Valley Forge Scientific Corp. Non-Qualified
Stock Option Plan and the Non-Qualified Stock Option Agreement, a copy of said
Agreement being attached hereto. My certified check drawn to the order of
Valley Forge Scientific Corp. in the amount of $_____ is attached.
NAME: ________________________________
SS No. : _____________________________
Address of Record:
______________________________________________________________.
Please forward my Certificate to the following address:
______________________________________________________________.
_________________________ Date:_____________
Employee Signature
TO BE COMPLETED BY PERSONNEL MANAGER:
The above named Employee is a current Employee? Yes ___ No____
Termination Date:________________
______________________________ Date:_____________
Authorized Corporate Officer