Exhibit 10.1
APPLIED INNOVATION INC.
[INCENTIVE/NONSTATUTORY] STOCK OPTION AGREEMENT
UNDER THE
2001 STOCK INCENTIVE PLAN
-------------------------
Applied Innovation Inc. (the "Company") hereby grants, effective this
____ day of ______, 20__ (the "Effective Date") to (the "Optionee") an option to
purchase shares of its common stock, $.01 par value (the "Option Shares"), at a
price of $________ per share pursuant to the Company's 2001 Stock Incentive Plan
(the "Plan"), subject to the following:
1. RELATIONSHIP TO THE PLAN. This option is granted pursuant to the
Plan, and is in all respects subject to the terms, provisions and definitions of
the Plan and any amendments thereto. The Optionee acknowledges receipt of a copy
of the Plan and represents that he or she is familiar with the terms and
conditions thereof. The Optionee accepts this option subject to all the terms
and provisions of the Plan (including without limitation provisions relating to
nontransferability, exercise of the option, sale of the option shares,
termination of the option, adjustment of the number of shares subject to the
option, and the exercise price of the option). The Optionee further agrees that
all decisions and interpretations made by the Stock Option Committee (the
"Committee"), as established under the Plan, and as from time to time
constituted, are final, binding, and conclusive upon the Optionee and his or her
heirs. This option [is/is not] an Incentive Stock Option under the Plan.
2. TIME OF EXERCISE. This option may be exercised, from time to time,
in full or in part, by the Optionee to the extent the option is vested based
upon [the number of full years the Optionee is an employee of the Company after
the Effective Date] (the "Vested Percentage") and remains exercisable (subject
to the provisions herein and the Plan) until it has been exercised as to all of
the Option Shares or the[ _____ anniversary of the Effective Date], whichever
occurs first. The Optionee is entitled to exercise this option to the extent of
the percentage of, and not to exceed in the aggregate, the maximum number of the
Option Shares, based upon the Vested Percentage, from time to time, as
determined in accordance with the following schedule:
[Years of Employment] Total
After the Effective Date Vested Percentage
------------------------ -----------------
Notwithstanding the foregoing, this option may not be exercised unless (i) the
Option Shares are registered under the Securities Act of 1933, as amended, and
are registered or qualified under applicable state securities or "blue sky"
laws, or (ii) the Company has received an opinion of counsel to the Company to
the effect that the option may be exercised and Option Shares may be issued by
the Company pursuant thereto without such registration or qualification. If this
option is not otherwise exercisable by reason of the foregoing sentence, the
Company will take reasonable steps to comply with applicable state and federal
securities laws in connection with such issuance.
[Alternate Section 2 for non-employee director grants:
2. TIME OF EXERCISE. This option is vested at the date of grant but may
not be exercised prior to the one year anniversary of the Effective Date. It may
thereafter be exercised from time to time in full or in part and shall remain
exercisable (subject to the provisions of the Plan) until it has been exercised
as to all shares subject hereto or the [ _____ anniversary of the Effective
Date], whichever occurs first. Notwithstanding the foregoing, this option may
not be exercised unless (i) the Option Shares are registered under the
Securities Act of 1933, as amended, and are registered or qualified under
applicable state securities or "blue sky" laws, or (ii) the Company has received
an opinion of counsel to the Company to the effect that the option may be
exercised and Option Shares may be issued by the Company pursuant thereto
without such registration or qualification. If this option is not otherwise
exercisable by reason of the foregoing sentence, the Company will take
reasonable steps to comply with applicable state and federal securities laws in
connection with such issuance.]
3. METHODS OF EXERCISE. This option is exercisable by delivery to the
Company of written notice of exercise which specifies the number of shares to be
purchased and the election of the method of payment
therefor, which will be one of the methods of payment specified in paragraph
11(c) of the Plan. If payment is other than payment in full in cash, the
method of payment is subject to the consent of the Committee. Upon receipt of
payment for the shares to be purchased pursuant to the option or, if applicable,
the shares to be delivered pursuant to the election of an alternative payment
method, the Company will deliver or cause to be delivered to the Optionee, to
any other person exercising this option, or to a broker or dealer if the method
of payment specified in clause (iv) of paragraph 11(c) of the Plan is elected, a
certificate or certificates for the number of shares with respect to which this
option is being exercised, registered in the name of the Optionee or other
person exercising the option, or if appropriate, in the name of such broker or
dealer; provided, however, that if any law or regulation or order of the
Securities and Exchange Commission or other body having jurisdiction over the
exercise of this option will require the Company or Optionee (or other person
exercising this option) to take any action in connection with the shares then
being purchased, the delivery of the certificate or certificates for such shares
may be delayed for the period necessary to take and complete such action.
4. ACQUISITION FOR INVESTMENT. This option is granted on the condition
that the acquisition of the Option Shares hereunder will be for the account of
the Optionee (or other person exercising this option) for investment purposes
and not with a view to resale or distribution, except that such condition will
be inoperative if the Option Shares are registered under the Securities Act of
1933, as amended, or if in the opinion of counsel for the Company such shares
may be resold without registration. At the time of any exercise of the option,
the Optionee (or other person exercising this option) will execute such further
agreements as the Company may require to implement the foregoing condition and
to acknowledge the Optionee's (or such other person's) familiarity with
restrictions on the resale of the Option Shares under applicable securities
laws.
5. DISPOSITION OF SHARES. The Optionee or any other person who may
exercise this option will notify the Company within seven (7) days of any sale
or other transfer of any Option Shares, and the Company may place a legend on
the Option Shares to such effect. If any class of equity securities of the
Company is registered pursuant to section 12 of the Securities Exchange Act of
1934, as amended, and the Optionee or any other person who may exercise this
option is subject to section 16 of that Act by virtue of such Optionee's or
person's relationship to the Company, the Optionee or other person exercising
this option agrees not to sell or otherwise dispose of any Option Shares unless
at least six (6) months have elapsed from the Effective Date.
6. WITHHOLDING. As a condition to the issuance of any of the Option
Shares under this option, Optionee or any person who may exercise this option
authorizes the Company to withhold in accordance with applicable law from any
salary, wages or other compensation for services payable by the Company to or
with respect to Optionee any and all taxes required to be withheld by the
Company under federal, state or local law as a result of such Optionee's or such
person's receipt or disposition of Option Shares purchased under this option.
If, for any reason, the Company is unable to withhold all or any portion of the
amount required to be withheld, Optionee (or any person who may exercise this
option) agrees to pay to the Company upon exercise of this option an amount
equal to the withholding required to be made less the amount actually withheld
by the Company.
7. GENERAL. This Agreement will be construed as a contract under the
laws of the State of Ohio without reference to Ohio's choice of law rules. It
may be executed in several counterparts, all of which will constitute one
Agreement. It will bind and, subject to the terms of the Plan, benefit the
parties and their respective successors, assigns, and legal representatives.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement as of the date first above written.
OPTIONEE: APPLIED INNOVATION INC.
By:
------------------------------------- -------------------------------------