Exhibit 10.8
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STOCK OPTION AGREEMENT
For Incentive Stock Options
Under the
Dynatronics Corporation
2005 Equity Incentive Award Plan
Pursuant to the terms and conditions of the Dynatronics Corporation
Amended and Restated 2005 Equity Incentive Award Plan (the "Plan"), Dynatronics
Corporation (the "Company") desiring to afford an opportunity to the Grantee
named below to purchase certain shares of the Company's common stock to provide
the Grantee with an added incentive as an employee of the Company or one or more
of its subsidiaries hereby grants to the Grantee and the Grantee hereby accepts
an Option to purchase the number of such shares specified below during a term
ending at midnight Mountain Time on the Expiration Date of this Option specified
below at the Option Exercise Price specified below subject to and upon the
following terms and conditions:
This Option is intended to be and shall be treated as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended.
1. Identifying Provisions. As used in this Option, the following terms
shall have the following respective meanings:
a. Grantee:
b. Date of Grant:
c. Number of Shares Optioned:
d. Option Exercise Price Per Share (Not to be less than the Fair
Market Value of the Common Stock of the Company as defined by the
Plan):
e. Expiration Date:
2. Vesting Schedule and Expiration. This Option is not exercisable in
any part until one (1) year after the date of ▇▇▇▇▇. Upon the expiration of one
(1) year after the date of ▇▇▇▇▇, and subject to the provisions for termination
and acceleration herein, this Option shall become exercisable pursuant to the
vesting schedule set forth below until and including the expiration date of this
Option, whereupon the Option shall expire and may thereafter no longer be
exercised. Vesting of the Option shall be as follows:
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Time Period Percentage of Option Exercisable
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0 - 6 months from date of grant 0%
After six months from date of grant 100%
3. Termination Provisions. The right to exercise this Option is subject
to the following restrictions and limitations:
a. Termination of Employment. Except as provided in Sections 3.b
and 3.c, below, or except as otherwise determined by the Committee,
this Incentive Stock Option shall terminate three (3) months after the
date of termination of the Optionee's employment.
b. Death of Grantee. Upon the death of the Grantee while in the
Company's employ or within not more than three (3) months after
termination of Grantee's employment, any portion of this Incentive
Stock Option exercisable on the date of death may be exercised by the
Grantee's estate or by a person who acquires the right to exercise such
Incentive Stock Option by bequest or inheritance or by reason of the
death of the Grantee, provided that such exercise occurs within both
the remaining Option Term of the Incentive Stock Option and one year
after the Optionee's death. The provisions of this Section shall apply
notwithstanding the fact that the Grantee's employment may have
terminated prior to death, but only to the extent of any portion of
this Incentive Stock Option which was exercisable on the date of death.
c. Retirement or Resignation. Upon the termination of the
Grantee's employment by reason of retirement or permanent disability
(as each is determined by the Committee), the Grantee may, within 36
months from the date of such termination of employment, exercise any
portion of this Incentive Stock Option to the extent such Incentive
Stock Option was exercisable at the date of such termination of
employment. Notwithstanding the foregoing, the tax treatment available
pursuant to Section 422 of the Code, upon the exercise of the Incentive
Stock Option will not be available to the Grantee who exercises any
Incentive Stock Option more than (i) 12 months after the date of
termination of employment due to permanent disability or (ii) three
months after the date of termination of employment due to retirement.
d. Continuity of Employment. This Option shall not be exercisable
in any part unless at all times beginning with the date of Grant and
ending no more than three (3) months prior to the date of exercise, the
Grantee has, except for military service leave, sick leave or other
bona fide leave of absence (such as temporary employment by the United
States Government), been in the continuous employ of the Company or
parent or subsidiary thereof, except that such period of three (3)
months shall be extended to one (1) year following any termination of
such employment by reason of the Grantee's total disability.
4. Restrictions on Transferability of Option. This Option may not be
transferred by the Grantee other than by will or the laws of descent and
distribution or pursuant to the terms of a qualified domestic relations order as
defined in the U.S. Internal Revenue Code. During the Grantee's lifetime the
Option may be exercised only by the Grantee or the Grantee's guardian or legal
representative. The Grantee is prohibited from the sale, exchange, transfer,
pledge, hypothecation, gift or other disposition of the shares of Common Stock
underlying the Incentive Stock Option until the later of either two (2) years
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after the Date of Grant or one (1) year after the transfer to the Grantee of
such underlying Common Stock after the exercise of such Incentive Stock Option.
In the event the Grantee chooses to make a premature disposition of such
underlying Common Stock contrary to such restrictions, the Options shall be
treated as Non-Statutory Stock Options pursuant to the terms of Article II of
the Plan from the date of grant which, in particular, shall cause the Grantee to
be taxed upon the fair market value of the underlying shares on the date of
exercise.
5. Adjustments and Corporate Reorganizations. Subject to the provisions
of the Plan under which this Option is granted, if the outstanding shares of
stock of the class then subject to this Option are increased or decreased or are
changed into or exchanged for a different number or kind of shares or securities
or other forms of property (including cash), or rights as a result of one or
more reorganizations, recapitalizations, spin-offs, stock splits, reverse stock
splits, stock dividends or the like, appropriate adjustments shall be made in
the number and/or kind of shares or securities or other forms of property
(including cash) or rights for which this Option may thereafter be exercised,
although without any change in the aggregate exercise price applicable to the
unexercised portions of this Option, but with a corresponding adjustment in the
exercise price per share. No fractional share of stock shall be issued under
this Option or in connection with any adjustment. Such adjustments shall be made
by the Committee, under authority of the Company's Board of Directors, whose
determinations as to what adjustments shall be made and the extent thereof,
shall be final, binding and conclusive. Upon the dissolution or liquidation of
the Company or upon a reorganization, merger or consolidation of the Company as
a result of which the outstanding securities of the class then subject to this
Option are changed into or exchanged for property (including cash), rights or
securities not of the Company's issue or any combination thereof, or upon a sale
of substantially all of the property of the Company to or the acquisition of
stock representing more than eighty percent (80%) of the voting power of the
stock of the Company then outstanding by another corporation or person, this
Option shall terminate unless provision is made in writing in connection with
such transaction for the assumption of this Option or the substitution for this
Option of an Option covering the stock of a successor employer corporation or a
parent or a subsidiary thereof, with appropriate adjustments in accordance with
the provisions above in this section entitled "Adjustments and Corporate
Reorganizations" as to the number and kind of shares optioned and their exercise
prices, in which event this Option shall continue in the manner and under the
terms so provided. If this Option shall so terminate, the Grantee or other
person then entitled to exercise this Option shall have the right at such time
prior to the consummation of the transaction causing such termination as the
Company shall designate to exercise the unexercised portions of this Option,
including the portions thereof which would but for this section entitled
"Adjustments and Corporate Reorganizations," not yet be exercisable.
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6. Exercise, Payment For and Delivery of Stock. This Option may be
exercised by the Grantee or other person then entitled to exercise it by giving
four (4) business days written notice of exercise to the Company specifying the
number of shares to be purchased and the total purchase price, accompanied by a
check to the order of the Company in payment of such price. If the Company is
required to withhold on account of any federal, state or local tax imposed as a
result of such exercise, the notice of exercise shall also be accompanied by a
check to the order of the Company in payment of the amount thus required to be
withheld.
7. Rights in Stock Before Issuance and Delivery. No person shall be
entitled to the privileges of stock ownership in respect of any shares issuable
upon exercise of this Option unless and until such shares have been issued to
such person as fully-paid shares.
8. Requirements of Law. By accepting this Option, the Grantee
represents and agrees for himself or herself and his or her transferees by will
or the laws of descent and distribution that unless a registration statement
under the Securities Act of 1933 is in effect as to shares purchased upon any
exercise of this Option (a) any and all shares so purchased shall be acquired
for his or her personal account and not with a view to or for sale in connection
with any distribution and (b) each notice of the exercise of any portion of this
Option shall be accompanied by a representation and warranty in writing signed
by the person entitled to exercise the same, that the shares are being so
acquired in good faith for his or her personal account and not with a view to or
for sale in connection with any distribution. No certificate or certificates for
shares of stock purchased upon exercise of this Option shall be issued and
delivered unless and until, in the opinion of legal counsel for the Company,
such securities may be issued and delivered without causing the Company to be in
violation of or incur any liability under any federal, state or other securities
law, or any other requirement of law or of any regulatory body having
jurisdiction over the Company.
9. Stock Option Plan. This Option is subject to and the Company and
Grantee agree to be bound by all of the terms and conditions of the Company's
Plan under which this Option was granted, as the same may have been amended from
time to time in accordance with its terms; provided that no such amendment shall
deprive the Grantee without the Grantee's consent of this Option or any rights
hereunder. Pursuant to said Plan, the Committee, or if there is no Committee,
the Board of Directors of the Company is vested with exclusive authority to
interpret and construe the Plan and this Option and is authorized to adopt rules
and regulations for carrying out the Plan. A copy of the Plan in its present
form is available for inspection during business hours by the Grantee or other
persons entitled to exercise this Option at the Company's principal office.
10. Notices. Any notice to be given to the Company shall be addressed
to the Company in care of its Corporate Secretary at its principal offices and
any notice to be given to the Grantee shall be addressed to the Grantee at the
address set forth beneath the Grantee's signature hereto or at such other
address as the Grantee may hereafter designate in writing to the Company. Any
such notice shall be deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as before said, registered or certified and
deposited postage and registry or certification fees prepaid in a post office or
branch post office regularly maintained by the United States Postal Service.
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This Agreement has been executed and delivered by the Company in Salt Lake City,
Utah and shall be construed and enforced in accordance with the laws of said
state, other than any choice of law rules calling for the application of laws of
another jurisdiction. Should there be any inconsistency or discrepancy between
the provisions of this Option and the terms and conditions of the Plan, under
which this Option is granted, the provisions in the Plan shall govern and
prevail. The receipt of this Option does not give the grantee any right to
continued employment by the Company or a subsidiary for any period, nor shall
the granting of this Option or the issuance of shares on exercise thereof give
the Company or any subsidiary any right to the continued services of the Grantee
for any period.
IN WITNESS WHEREOF the Company has granted this Option on the date of Grant
specified above.
DYNATRONICS CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
By:______________________________________
Its: Secretary/Treasurer
GRANTEE:
_________________________________________
Signature
_________________________________________
Print or Type Name
Address:
_________________________________________
_________________________________________
City/State/Zip
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