EXHIBIT 4.3
Grant No.
XENONICS HOLDINGS, INC.
STOCK OPTION GRANT
OPTIONEE:
ADDRESS:
GRANT DATE:
EXERCISE PRICE: $__________ per share
NUMBER OF OPTION SHARES: __________ shares
EXPIRATION DATE:
TYPE OF OPTION: ____ Incentive Option ____ Non-Statutory Option
This Stock Option Grant is made, as of the Grant Date set forth above, by
and between Xenonics Holdings, Inc., a Nevada corporation (the "Corporation")
and the Optionee named above. This Stock Option Grant includes the terms of the
Stock Option Exercise Notice and Purchase Agreement attached hereto as Exhibit
A, and is subject to the terms of the Corporation's Stock Option Plan (the
"Plan"), a copy of which is attached hereto as Exhibit B. All capitalized terms
not defined herein shall have the meaning set forth in the Appendix to the Plan.
1. GRANT OF OPTION. The Corporation hereby grants to Optionee named above,
as of the Grant Date, an option to purchase up to the total number of Option
Shares specified above. The Option Shares shall be purchasable from time to time
during the option term specified in paragraph 2 below at the Exercise Price.
2. OPTION TERM. The option term shall be measured from the Grant Date and
shall accordingly expire at the close of business on the Expiration Date
specified above, unless sooner terminated in accordance with paragraph 5 below.
3. LIMITED TRANSFERABILITY. This option shall be neither transferable nor
assignable, in whole or in part, by Optionee other than by will or by the laws
of descent and distribution following Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee. However, if this option is
designated a Non-Statutory Option above, then this option may also, in
connection with Optionee's estate plan, be assigned in whole or in part during
Optionee's lifetime to one or more members of Optionee's immediate family
(spouse or children) or to a trust established exclusively for the benefit of
one or more such immediate family members. Optionee shall give written notice of
any such assignment during Optionee's lifetime to the Corporation within 20 days
of assignment. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
4. EXERCISABILITY.
[ ] (a) All rights hereunder are immediately vested; or
[ ] (b) This option shall become vested or exercisable for the Option
Shares in installments as provided in the Exercise Schedule below:
MONTHS ADDITIONAL EXERCISABLE ACCUMULATED
SINCE GRANT PERCENT EXERCISABLE PERCENT
----------- ------- -------------------
0 33.33% 33.33%
12 33.33% 66.66%
24 33.33% 100.00%
For purposes of calculating the number of months since grant only full
complete calendar months from the first of said month until the end of said
month will be counted. For example, if the grant was issued on June 18th, the
remaining days in the month of June would be disregarded and a full calendar
month would not accrue until July 31st. If the grant was issued on June 1st a
full calendar month would accrue on June 30th.
If the Optionee is terminated by the actions of the Corporation, except
for Misconduct, at any time before he has obtained an accumulated exercisable
percentage of 100% then, upon such termination, he shall receive a pro-rated
percentage for the number of whole months worked on the basis of 2.77% per
month.
As the option becomes exercisable or vested for such installments, those
installments shall accumulate and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the
option term under paragraph 5 below. The exercisable installments may be
exercised in whole or in part, but only as to whole shares.
5. CESSATION OF SERVICE. The option term specified in paragraph 2 above
shall terminate, and this option shall cease to be outstanding prior to the
Expiration Date, upon Optionee's ceasing to be in the Service of the
Corporation. In such event, the following provisions shall apply:
a. Should Optionee cease to remain in Service for any reason (other
than death, Permanent Disability or Misconduct) while this option is
outstanding, then Optionee shall have a period of three (3) months (commencing
with the date of such cessation of Service) during which to exercise this option
as to vested Option Shares.
b. Should Optionee die while this option is outstanding, then the
personal representative of Optionee's estate (or the person or persons to whom
the option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution) shall have a period of twelve (12) months
(commencing with the date of such cessation of service) during which to exercise
this option as to vested Option Shares.
c. Should Optionee cease Service by reason of Permanent Disability
while this option is outstanding, then Optionee shall have a period of twelve
(12) months (commencing with the date of such cessation of Service) during which
to exercise this option as to vested Option Shares.
d. Should Optionee's Service be terminated for Misconduct, then this
option shall terminate immediately and cease to remain outstanding.
e. During the limited post-Service exercise period, this option may
not be exercised in the aggregate for more than the number of vested Option
Shares for which the option is exercisable on the date of the Optionee's
cessation of Service. Upon the expiration of such limited post-Service exercise
period or upon the Expiration Date (if earlier), this option shall terminate and
cease to be outstanding for any vested Option Shares for which the option has
not been exercised. In no event shall this option be exercisable at any time
after the Expiration Date. To the extent this option is not otherwise
exercisable for vested Option Shares at the time of Optionee's cessation of
Service, this option shall immediately terminate and cease to be outstanding
with respect to those shares.
6. ADJUSTMENT IN OPTION SHARES. Should any change be made to the Common
Stock by reason of any split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the total number and/or class of securities
subject to this option, and (ii) the Exercise Price, in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.
7. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price, and become a holder of
record of the Purchased Shares.
8. MANNER OF EXERCISING OPTIONS
a. In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising this option) must take the following
actions:
(1) Execute and deliver to the Corporation a Stock Option
Exercise Notice and Purchase Agreement (Exhibit A) for the Option Shares for
which the option is exercised.
(2) Pay the aggregate Exercise Price for the Purchased Shares
in one or more of the following forms:
(a) Cash or check made payable to the Corporation; or
(b) A promissory note payable to the Corporation, but
only to the extent authorized by the Plan Administrator in
accordance with paragraph 13.
Upon prior written approval of the Plan Administrator, the Exercise
Price may also be paid as follows:
(c) In shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or
(d) Through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
written instructions (1) to a Corporation-designated brokerage firm
to effect the immediate sale of the Purchased Shares and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise
Price payable for the Purchased Shares plus all applicable federal,
state and local income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (2) to the
Corporation to deliver the certificates for the Purchased Shares
directly to such brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is utilized
in connection with the option exercise, payment of the Exercise Price must
accompany the Stock Option Exercise Notice and Purchase Agreement delivered to
the Corporation in connection with the option exercise.
(3) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other
than Optionee) have the right to exercise this option.
(4) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in
order for it to comply with the applicable requirements of
federal and state securities laws.
(5) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for
the satisfaction of all federal, state and local income and
employment tax withholding requirements applicable to the
option exercise.
b. As soon as practical after the Exercise Date, the Corporation
shall issue to, or, on behalf of Optionee (or any other person or persons
exercising this option), a share certificate for the Purchased Shares, with the
appropriate legends affixed thereto.
c. In no event may this option be exercised for an fractional
shares.
9. COMPLIANCE WITH LAWS AND REGULATIONS
a. The exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or Nasdaq, if applicable) on which
the Common Stock may be listed for trading at the time of such exercise and
issuance.
b. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
10. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
paragraph 3 above, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's permitted assigns and the legal representatives, heirs and
legatees of Optionee's estate.
11. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated on the Stock Option Grant. All notices shall be deemed
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.
12. FINANCING. The Plan Administrator may, in its absolute discretion and
without any obligation to do so, permit Optionee to pay the Exercise Price for
the purchase Option Shares by delivering a full-recourse promissory note payable
to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the terms of the Plan and the Stock Option Exercise Notice and Purchase
Agreement. All decisions of the Plan Administrator with respect to any question
or issue arising under the Plan or this Agreement shall be conclusive and
binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Nevada without resort to
its conflict-of-laws rules.
15. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event this
option is designated an Incentive Option above, the following terms and
conditions shall also apply to the grant:
a. This option shall cease to qualify for favorable tax treatment as
an Incentive Option if (and to the extent) this option is exercised for one or
more Option Shares: (1) more than three (3) months after the date Optionee
ceases to be an Employee or in the Service of the Corporation for any reason
other than death or Permanent Disability or (2) more than twelve (12) months
after the date Optionee ceases to be an Employee by reason of death or Permanent
Disability.
b. No installment under this option shall qualify for favorable tax
treatment as an Incentive Option if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of any
earlier installments of the Common Stock and any other securities for which this
option or any other Incentive Options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year,
exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One
Hundred Thousand Dollar ($100,000) limitation be exceeded in any calendar year,
this option shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.
c. Should the Board elect to accelerate the exercisability of this
option upon a Corporate Transaction, then this option shall qualify as an
Incentive Option only to the extent the aggregate Fair Market Value (determined
at the Grant Date) of the Common Stock for which this option first becomes
exercisable in the calendar year in which the Corporate Transaction occurs does
not, when added to the aggregate value (determined as of the respective date or
dates of grant) of the Common Stock or other securities for which this option or
one or more other Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year,
exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the
calendar year of such Corporate Transaction, the option may nevertheless be
exercised for the excess shares in such calendar year as a Non-Statutory Option.
d. Should Optionee hold, in addition to this option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then the foregoing limitations on
the exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
e. The grant of this option is subject to approval of the Plan by
Corporation's stockholders within twelve (12) months after the adoption of the
Plan by the Board. In the event that such stockholder approval is not obtained,
then this option shall not qualify as an Incentive Option.
f. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder
approval be issued under the Plan, then this option shall cease to qualify as an
Incentive Option unless stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of the Plan.
g. If Optionee is a 10% Stockholder, then the Exercise Price shall
not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the Grant Date, and the option term shall not exceed
five (5) years measured from the Grant Date.
h. Shares purchased pursuant to this option shall cease to qualify
for favorable tax treatment as Incentive Option shares if and to the extent
Optionee disposes of such shares within two (2) years from the Grant Date or
within one (1) year of Optionee's purchase of said shares.
i. Optionee acknowledges that the rules regarding Incentive Options
as contained in the Internal Revenue Code are subject to amendment in the
future. Optionee should consult his or her tax advisor prior to taking any
action with respect to this option or the shares purchased hereunder.
IN WITNESS WHEREOF, this Agreement is executed as of the Grant Date first
noted above.
XENONICS HOLDINGS, INC.
By:
----------------------------------