RF INDUSTRIES, LTD. INCENTIVE STOCK OPTION AGREEMENT
Exhibit
4.2
RF
INDUSTRIES, LTD.
THIS
INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”), is made as of the __ day of
-___________, 200_ by and between RF Industries, Ltd., a Nevada corporation (the
“Company”), and ________ _________ (“Optionee”).
RECITAL
The
action of the Board of Directors of the Company (the “Board”) has authorized the
granting to Optionee as an employee of the Company of an incentive stock option,
pursuant to the Company’s 2010 Stock Incentive Plan (the “Plan”), to purchase
the number of shares of common stock of the Company specified in Section 1
hereof, at the price specified therein, such option to be for the term and
upon the terms and conditions hereinafter stated.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and of the undertakings of the
parties hereto contained herein, it is hereby agreed:
1. Number of Shares; Option
Price. Pursuant to said action of the Board, the Company
hereby grants to Optionee the option (“Option”) to purchase, upon and subject to
the terms and conditions of the Plan, __________ shares of common stock of the
Company (“Shares”) at the price of $______ per Share (which price shall be no
less than the fair market value of a Share on the date of grant of this
Option).
2. Term. This
Option shall expire on the day before the ______ anniversary of the date of
grant of the Option (the “Expiration Date”), unless such Option shall have been
terminated prior to that date in accordance with the provisions of this
Agreement.
3. Shares Subject to
Exercise. This Option shall be exercisable in installments as
to ___________ of the number of Shares on the first ______ anniversaries of the
date hereof, as to ___________ of the number of Shares on the second ______
anniversaries of the date hereof, and as to ___________ of the number of Shares
on the third ______ anniversaries of the date hereof provided, however, that an
installment shall not become exercisable if the Optionee is not employed as an
employee of the Company, or any of its subsidiaries, as of such anniversary
date. Once exercisable, the Option shall thereafter remain
exercisable as to such Shares for the term specified in Section 2 hereof, unless
Optionee’s employment is terminated pursuant to Section 6 hereof or the Option
is terminated pursuant to a Corporate Transaction (as defined in Section 15
hereof).
4. Method and Time of
Exercise. The Option may be exercised by written notice
delivered to the Company at its principal executive office stating (i) that
Optionee has no plan to violate Section 16 in the future, (ii) that Optionee
agrees to notify the Company within ten (10) days of a violation of Section 16
hereof, and (iii) the number of shares with respect to which the Option is being
exercised, together with:
(A) a
check or money order made payable to the Company in the amount of the exercise
price and any withholding tax, as provided under Section 5 hereof;
or
(B) if
expressly authorized in writing by the Board, in its sole discretion, at the
time of the Option exercise, the tender to the Company of shares of the
Company’s common stock owned by Optionee having a fair market value not less
than the exercise price; or
(C) if
expressly authorized in writing by the Board, subject to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002, in its sole discretion, at the time of the Option exercise, the
Optionee’s full recourse promissory note in a form approved by the Company;
or
(D) if
any other method such as cashless exercise is expressly authorized in writing by
the Board, in its sole discretion, at the time of the Option exercise, the
tender of such consideration having a fair market value not less than the
exercise price.
Only
whole shares may be purchased.
5. Tax
Withholding. In general, no tax withholding is required with
respect to this Option or its exercise. If, however, for any reason
all or part of this Option is considered to be a non-qualified stock option,
rather than an incentive stock option, then, as a condition to exercise of such
portion of this Option, the Company may require Optionee to pay over to the
Company all applicable federal, state and local taxes which the Company is
required to withhold with respect to the exercise of this Option in that
connection. At the discretion of the Board and upon the request of
Optionee, the minimum statutory withholding tax requirements may be satisfied by
the withholding of Shares otherwise issuable to Optionee upon the exercise of
this Option.
6. Exercise on Termination of
Employment. If for any reason Optionee ceases to be employed
by the Company or any of its subsidiaries (such event being called a
“Termination”), this Option (to the extent then exercisable) may be exercised in
whole or in part at any time, except with respect to a Termination For Cause,
only within 90 days of the date of such Termination, but in no event after the
earlier of the Expiration Date or a Corporate Transaction which terminates the
Option pursuant to Section 15 hereof. For purposes of this Agreement,
“employment” means service as an employee. For purposes of this
Agreement, Optionee’s employment shall not be deemed to terminate by reason of a
transfer to or from the Company or its subsidiary or among such entities, or
sick leave, military leave or other leave of absence approved by the Board, if
the period of any such leave does not exceed ninety (90) days or, if longer, if
Optionee’s right to reemployment by the Company or any Affiliate is guaranteed
either contractually or by statute. For purposes of this Agreement,
“Termination For Cause” shall mean Optionee’s loss of employment by the Company
or any of its subsidiaries due to Optionee’s (a) willful breach or habitual
neglect or continued incapacity to perform Optionee’s required duties, (b)
commission of acts of dishonesty, fraud, misrepresentation or other acts of
moral turpitude as would prevent the effective performance of Optionee’s duties
or (c) termination for cause under any employment agreement between the Company
and Optionee (as defined therein). In the event Optionee’s employment
by the Company or any of its subsidiaries is Terminated For Cause, then the
Option shall cease to be exercisable as of the date of such
Termination.
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7. Non-Transferability. This
Option may not be assigned or transferred except by will or by the laws of
descent and distribution, and may be exercised only by Optionee during the
Optionee’s lifetime and after the Optionee’s death, by the Optionee’s personal
representative or by the person entitled thereto under the Optionee’s will or
the laws of intestate succession.
8. Optionee Not a
Stockholder. Optionee shall have no rights as a stockholder
with respect to the Shares covered by this Option until the date of issuance of
a stock certificate or stock certificates to the Optionee upon exercise of this
Option. No adjustment will be made for dividends or other rights for
which the record date is prior to the date such stock certificate or
certificates are issued.
9. No Right to
Employment. Nothing in the Option granted hereby shall
interfere with or limit in any way the right of the Company or of any of its
subsidiaries to terminate Optionee’s employment, consulting or advising at any
time, nor confer upon Optionee any right to continue in the employ of, consult
with, or advise the Company or any of its Subsidiaries.
10. Modification and
Waiver. This Option may not be modified except by a writing
signed by both parties, except that either party may waive any right hereunder
by an instrument unilaterally signed.
11. Restrictions on Sale of
Shares. Optionee represents and agrees that upon the
Optionee’s exercise of this Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the Shares issued to the Optionee, the Optionee will acquire the
Shares issuable upon exercise of this Option for the purpose of investment and
not with a view to their resale or further distribution, and that upon such
exercise thereof the Optionee will furnish to the Company a written statement to
such effect, satisfactory to the Company in form and
substance. Optionee agrees that any certificates issued upon exercise
of this Option may bear a legend indicating that their transferability is
restricted in accordance with applicable state and federal securities
law. Any person or persons entitled to exercise this Option under the
provisions of Sections 6 and 7 hereof shall, upon each exercise of this Option
under circumstances in which Optionee would be required to furnish such a
written statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.
12. Nevada Law
Governs. This Agreement shall be interpreted under the
internal laws of the State of Nevada and any action hereunder shall be brought
in the state or federal courts of Nevada.
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13. Notices. All
notices to the Company shall be addressed to the Corporate Secretary at the
principal executive office of the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and all notices to Optionee shall be
addressed to Optionee at the address of Optionee on file with the Company, or to
such other address as either may designate to the other in writing. A
notice shall be deemed to be duly given if and when enclosed in a properly
addressed sealed envelope deposited, postage prepaid, with the United States
Postal Service. In lieu of giving notice by mail as aforesaid,
written notices under this Agreement may be given by personal delivery to
Optionee or to the Corporate Secretary (as the case may be).
14. Sale or Other
Disposition. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form of transfer) of any
Shares acquired by exercise of this Option, the Optionee shall first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
15. Corporate
Transactions. In the event of a Corporate
Transaction (as such term is defined in the Plan), the Board shall
notify Optionee at least thirty (30) days prior thereto or as soon as may be
practicable. To the extent not previously exercised, this Option
shall terminate immediately prior to the consummation of such Corporate
Transaction unless the Board determines otherwise in its sole discretion; provided, however, that the
Board, in its sole discretion, may (i) permit exercise of this Option prior to
its termination, even if this Option would not otherwise have been exercisable,
and (ii) provide that this Option shall be assumed or an equivalent option
substituted by an applicable successor corporation or any subsidiary of the
successor corporation.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.
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RF
INDUSTRIES, LTD.
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By:
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Name:
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Title:
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OPTIONEE:
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Address:
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Social
Security
Number
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