Exhibit 4.2
SA HOLDINGS, INC.
INCENTIVE STOCK OPTION AGREEMENT
UNDER
1994 EMPLOYEE STOCK OPTION PLAN
NONTRANSFERABLE INCENTIVE STOCK OPTION AGREEMENT (this
"Agreement") entered into this ____ day of _________________,
199___, between SA HOLDINGS, INC., a Delaware corporation (the
"Company"), and ________________________________ (the "Optionee,"
which term as used herein shall be deemed to include any successor
to the Optionee by will or by the laws of descent and distribution,
unless the context shall otherwise require).
Pursuant to the Company's 1994 Employee Stock Option Plan
(the "Plan"), the Company, acting through the Employee Option Plan
Committee of its Board of Directors (the "Committee"), approved the
issuance to the Optionee, effective as of the date set forth above,
of an incentive stock option to purchase up to an aggregate of
____________ shares of common stock, $.0001 par value, of the
Company (the "Common Stock"), at the price of $____________ per
share (the "Option Price") which represents not less than 100% of
the fair market value of a share of Common Stock determined in
accordance with the Plan or 110% of the fair market value of a
share of Common Stock determined in accordance with the Plan in the
case of any stockholder of the Company who possesses more than 10%
of the total number of shares of Common Stock outstanding, upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as
follows:
1. Option; Option Price. On behalf of the Company, the
Committee hereby grants as of the date of this Agreement to the
Optionee the option (the "Option") to purchase, subject to the
terms and conditions of this Agreement and the Plan (which are
incorporated by reference herein and which in all cases shall
control in the event of any conflict with the terms, definitions
and provisions of this Agreement), _______________ shares of Common
Stock of the Company at an exercise price per share equal to the
Option Price, which Option is intended to qualify for Federal
income tax purposes as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). A copy of the Plan as in effect on the date
hereof has been supplied to the Optionee, and the Optionee hereby
acknowledges receipt thereof.
2. Term. The term (the "Option Term") of the Option shall
commence on the date of this Agreement and shall expire on the
__________ anniversary of the date of this Agreement, unless such
Option shall theretofore have been terminated in accordance with
the terms hereof or of the Plan but in no event shall the Option
Term extend beyond ten (10) years from the date hereof, or if the
Optionee is the holder of more than 10% of the total number of
shares of
Common Stock outstanding, in no event shall the Option Term extend
beyond five (5) years from the date hereof.
3. Vesting; Restrictions on Sale; Right of Repurchase. (a)
Unless accelerated, as set forth in the Plan or herein, the Option
granted hereunder shall vest and become exercisable on the date
which is six (6) months and one (1) day after the date of grant of
the Option (the "Option Vesting Date"). Subject to the provisions
of Sections 5 and 8 hereof, shares as to which the Option becomes
exercisable pursuant to the foregoing provisions may be purchased
at any time thereafter prior to the expiration or termination of
the Option. The shares of Common Stock acquired upon the exercise
of this Option may not be sold except in accordance with the
provisions of Exhibit A attached hereto. Further, if the Optionee
shall cease to be an employee of the Company or its subsidiaries
for any reason whatsoever (whether voluntary or involuntary and
whether or not for cause), prior to the expiration of the time
period set forth in said Exhibit A, the Company shall have the
exclusive and irrevocable right, but not the obligation (the
"Company's Right of Repurchase"), to require the Optionee to sell
to the Company an amount of shares of Common Stock equivalent to
the total number of shares acquired by the Optionee pursuant to the
terms of this Option for an amount per share equivalent to the
Option Price (the "Reacquisition Price"). The Company may exercise
the Company's Right of Repurchase by providing Optionee written
notice of its intention to do so. Thereafter, Optionee shall have
five (5) days to provide the Company with an appropriate Assignment
and such other instruments and documents as requested by the
Company and its counsel to effect such assignment to the Company.
Upon receipt of such documents, the Company shall pay to Optionee
the aggregate Reacquisition Price.
(b) Anything contained in this Agreement to the contrary
notwithstanding, the Option shall not be exercisable to the extent
that the aggregate Fair Market Value (as determined in accordance
with Section 7(a) of the Plan) on the date hereof of all stock with
respect to which incentive stock options are exercisable for the
first time by the Optionee during any calendar year (under the Plan
and all other plans of the Company and its subsidiaries, if any)
exceeds $100,000. Such prohibition on exercise shall be temporary
and shall not effect subsequent exercises if the restriction set
forth herein is not violated at such time.
4. Termination of Option. (a) The unexercised portion of
the Option shall automatically terminate and shall become null and
void and be of no further force or effect upon the first to occur
of the following:
(i) the expiration of the Option Term;
(ii) the expiration of three (3) months from the
date that the Optionee retires from the Company with the
written consent of the Company;
(iii) the expiration of twelve (12) months from
the date that the Optionee ceases to be an employee of the
Company or any of its subsidiaries as a result of the
Optionee's death or permanent and total disability (within
the meaning of Section 422(c)(6) of the Code);
(iv) immediately (unless otherwise provided in
writing by agreement between the parties) if the Optionee
ceases to be an employee of the Company or any of its
subsidiaries for any reason whatsoever (whether voluntary or
involuntary and whether or not for cause);
(v) except to the extent permitted by Section
7(e) of the Plan, the date on which the Option or any part
thereof or right or privilege relating thereto is transferred
(otherwise than by will or the laws of descent and
distribution), assigned, pledged, hypothecated, attached or
otherwise disposed of by the Optionee.
(b) Anything contained herein to the contrary
notwithstanding, the Option shall not be affected by any change of
duties or position of the Optionee (including a transfer to or from
the Company or one of its subsidiaries), so long as the Optionee
continues to be an officer or employee of the Company or one of its
subsidiaries.
5. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Vice President-Finance of
the Company, which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Option is being exercised (the "Optioned Shares");
(iii) state the method of payment for the
Optioned Shares pursuant to Section 5(b);
(iv) state the date upon which the Optionee
desires to consummate the purchase of the Optioned Shares
(which date must be prior to the termination of such Option
and no later than thirty (30) days from the delivery of such
Notice);
(v) include any representations of the Optionee
required under Section 8(c); and
(vi) if the Option shall be exercised pursuant
to Section 10 by any person other than the Optionee, include
evidence to the satisfaction of the Committee of the right of
such person to exercise the Option.
(b) Payment of the Option Price for the Optioned Shares
shall be made (i) in cash or by personal or certified check, (ii)
by delivery of stock certificates (in negotiable form) representing
shares of Common Stock that have been owned of record by the
Optionee for at least six (6) months prior to the date of exercise
and that have a Fair Market Value on the date of exercise
(determined in the manner set forth in Section 7(a) of the Plan)
less than or equal
to the aggregate Option Price of the Optioned Shares or (iii) a
combination of the methods set forth in the foregoing clauses (i)
and (ii).
(c) The Company shall issue a stock certificate in the
name of the Optionee (or such other person exercising the Option in
accordance with the provisions of Section 10) for the Optioned
Shares as soon as practicable after receipt of the Notice and
payment of the aggregate Option Price for such shares.
6. No Rights as a Stockholder. The Optionee shall not have
any privileges of a stockholder of the Company with respect to any
Optioned Shares until the date of issuance of a stock certificate
pursuant to Section 5(c).
7. Adjustments. If, at any time while the Option is
outstanding, the Common Stock is changed by reason of a
recapitalization, stock split, reverse stock split, stock dividend,
combination of shares, or converted into or exchanged for other
securities as a result of a merger, consolidation or
reorganization, the Committee shall make adjustments in the number
and class of shares of stock subject to the Option, and the Option
Price of the Option, subject to the provisions of Section 8 of the
Plan (or any similar or successor provisions of the Plan which may
be hereafter adopted).
8. Additional Provisions Related to Exercise. (a) The
Option shall be exercisable only on such date or dates and during
such period and for such number of shares of Common Stock as are
set forth in this Agreement.
(b) The Option may not at any one time be exercised as
to less than One Hundred (100) shares of Common Stock unless the
remaining shares which have become so purchasable are less than one
hundred (100) shares of Common Stock.
(c) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 5 hereof. Upon the exercise of
the Option at a time when there is not in effect a registration
statement under the Securities Act relating to the shares of Common
Stock issuable upon exercise of the Option, the Committee in its
discretion may, as a condition to the exercise of the Option,
require the Optionee (i) to represent in writing that the shares of
Common Stock received upon exercise of the Option are being
acquired for investment and not with a view to distribution and
(ii) to make such other representations and warranties as are
deemed appropriate by counsel to the Company. No shares of Common
Stock shall be issued and delivered upon the exercise of the Option
unless and until the Company and/or the Optionee shall have
complied with all applicable Federal or state registration, listing
and/or qualification requirements and all other requirements of law
or of any regulatory agencies having jurisdiction.
(d) Stock certificates representing shares of Common
Stock acquired upon the exercise of the Option that have not been
registered under the Securities Act shall, if required by the
Committee, bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
9. No Evidence of Employment or Service. Nothing contained
in the Plan or this Agreement shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the Company
or its subsidiaries (subject to the terms of any separate agreement
to the contrary) to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
10. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated or otherwise disposed
of in any way by the Optionee, except by will or by the laws of
descent and distribution, and may be exercised during the lifetime
of the Optionee only by the Optionee. If the Optionee dies, the
Option shall thereafter be exercisable, during the period specified
in Section 4(a)(iii), by his executors or administrators to the
full extent to which the Option was exercisable by the Optionee at
the time of his death. The Option shall not be subject to
execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Option, shall be
null and void and without effect.
11. Disqualifying Dispositions. If the shares of Common
Stock acquired upon the exercise of this Option are disposed of
within two (2) years following the date of this Agreement or one
(1) year following the issuance of shares of Common Stock pursuant
to the terms of this Agreement to the Optionee or the Optionee
otherwise makes a disposition within the meaning of Section 424(c)
of the Code and the regulations promulgated thereunder (a
"Disqualifying Disposition"), the Optionee shall, within ten (10)
days subsequent to such Disqualifying Disposition, notify the
Company in writing of the date, sales price or other value ascribed
to or used to measure the disposition of the shares thereof and the
other terms of such Disqualifying Disposition and shall immediately
deliver to the Company any amount of federal income tax withholding
required by law.
12. Merger, Consolidation, Sale of Assets, Etc., Resulting in
a Change of Control.
(a) In the event of a Change in Control (as hereinafter
defined), the Company's Right of Repurchase shall immediately be
and become null and void ab initio and shall no longer be
exercisable by the Company if, within that period equal to the
duration specified on Exhibit A hereto plus 6 months of such Change
in Control, the Optionee shall cease for any reason to be an
officer or employee of the Company. For purposes of this
Agreement,
a Change in Control of the Company shall be deemed to have occurred
if (i) there shall be consummated (x) any consolidation or merger
of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the Common
Stock would be converted into cash, securities or other property,
other than a merger of the Company in which the holders of the
Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving
corporation immediately after the merger, or (y) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets
of the Company; or (ii) the stockholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company;
or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of thirty percent
(30%) or more of the Company's outstanding Common Stock, except for
any person who had such beneficial ownership prior to the date
hereof; or (iv) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
entire Board of Directors shall cease for any reason to constitute
a majority thereof; provided, however, that an event or series of
events described in (i), (ii), (iii) or (iv) above shall not
constitute a Change in Control if a majority of the directors in
office who were also directors on the date which is three (3) years
prior to the occurrence of such an event shall so determine.
(b) Any exercise of the Option permitted pursuant to
Section 12(a) shall be made within 180 days of the Optionee's
termination as an employee or officer of the Company.
13. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient
if (i) personally delivered, (ii) sent by nationally-recognized
overnight courier or (iii) sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
if to the Optionee, to the address set forth on the
signature page hereto; and
if to the Company, to:
SA Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Finance
or to such other address as the party to whom notice is to be given
may have furnished to each other party in writing in accordance
herewith. Any such communication shall be deemed to have been
given (i) when delivered, if personally delivered, (ii) on the
first Business Day (as hereinafter defined) after dispatch, if sent
by nationally-recognized overnight courier and (iii) on the third
Business Day following the date on which the piece of mail
containing such communication is posted, if sent by mail. As used
herein, "Business Day" means a day that is not a Saturday, Sunday
or a day on which banking institutions in the city to which the
notice or communication is to be sent are not required to be open.
14. No Waiver. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent
breach or condition, whether of like or different nature.
15. Optionee Undertaking. The Optionee hereby agrees to
take whatever additional actions and execute whatever additional
documents the Company or its counsel may in their reasonable
judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the express provisions of this Agreement.
16. Modification of Rights. The rights of the Optionee are
subject to modification and termination in certain events as
provided in this Agreement and the Plan.
17. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
applicable to contracts made and to be wholly performed therein.
18. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
19. Entire Agreement. This Agreement and the Plan
constitute the entire agreement between the parties with respect to
the subject matter hereof, and supersede all previously written or
oral negotiations, commitments, representations and agreements with
respect thereto.
SA HOLDINGS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
OPTIONEE:
________________________________________
Name:___________________________________
Address:________________________________
________________________________
________________________________
EXHIBIT A
TO
STOCK OPTION AGREEMENT
UNDER
1994 STOCK OPTION PLAN
Duration: 18 months
Any shares of Common Stock acquired upon the exercise in
whole or in part of this Option may not be assigned, transferred or
sold by Optionee except as set forth herein. Commencing on that
date which is one month after the Option Vesting Date (such date
being referred to herein as "Restriction Lapse Date No. 1"), and on
the same day of each successive calendar month thereafter (each
such date being referred to herein as the next successive
Restriction Lapse Date until Restriction Lapse Date No. 18), the
restrictions for assignment, transfer or sale set forth in this
Agreement shall expire as to, but not more than, the aggregate
number of shares of Common Stock determined in accordance with the
terms of the Agreement and the schedule set forth below, provided
that any shares of Common Stock so assigned, transferred or sold
following exercise of this Option shall be deducted from the
aggregate amount which may be disposed of hereunder.
Aggregate Number of shares of Common Stock
(expressed as a fraction of total number
Restriction of Optioned Shares acquired hereunder)
Lapse Date No. which may be sold
-------------- ------------------------------------------
1 1/18
2 2/18
3 3/18
4 4/18
5 5/18
6 6/18
7 7/18
8 8/18
9 9/18
10 10/18
11 11/18
12 12/18
13 13/18
14 14/18
15 15/18
16 16/18
17 17/18
18 18/18
EXHIBIT A
TO
STOCK OPTION AGREEMENT
UNDER
1994 STOCK OPTION PLAN
Duration: 24 months
Any shares of Common Stock acquired upon the exercise in
whole or in part of this Option may not be assigned, transferred or
sold by Optionee except as set forth herein. Commencing on that
date which is one month after the Option Vesting Date (such date
being referred to herein as "Restriction Lapse Date No. 1"), and on
the same day of each successive calendar month thereafter (each
such date being referred to herein as the next successive
Restriction Lapse Date until Restriction Lapse Date No. 24), the
restrictions for assignment, transfer or sale set forth in this
Agreement shall expire as to, but not more than, the aggregate
number of shares of Common Stock determined in accordance with the
terms of the Agreement and the schedule set forth below, provided
that any shares of Common Stock so assigned, transferred or sold
following exercise of this Option shall be deducted from the
aggregate amount which may be disposed of hereunder.
Aggregate Number of shares of Common Stock
(expressed as a fraction of total number
Restriction of Optioned Shares acquired hereunder)
Lapse Date No. which may be sold
-------------- ------------------------------------------
1 1/24
2 2/24
3 3/24
4 4/24
5 5/24
6 6/24
7 7/24
8 8/24
9 9/24
10 10/24
11 11/24
12 12/24
13 13/24
14 14/24
15 15/24
16 16/24
17 17/24
18 18/24
19 19/24
20 20/24
21 21/24
22 22/24
23 23/24
24 24/24
EXHIBIT A
TO
STOCK OPTION AGREEMENT
UNDER
1994 STOCK OPTION PLAN
Duration: 30 months
Any shares of Common Stock acquired upon the exercise in
whole or in part of this Option may not be assigned, transferred or
sold by Optionee except as set forth herein. Commencing on that
date which is one month after the Option Vesting Date (such date
being referred to herein as "Restriction Lapse Date No. 1"), and on
the same day of each successive calendar month thereafter (each
such date being referred to herein as the next successive
Restriction Lapse Date until Restriction Lapse Date No. 30), the
restrictions for assignment, transfer or sale set forth in this
Agreement shall expire as to, but not more than, the aggregate
number of shares of Common Stock determined in accordance with the
terms of the Agreement and the schedule set forth below, provided
that any shares of Common Stock so assigned, transferred or sold
following exercise of this Option shall be deducted from the
aggregate amount which may be disposed of hereunder.
Aggregate Number of shares of Common Stock
(expressed as a fraction of total number
Restriction of Optioned Shares acquired hereunder)
Lapse Date No. which may be sold
-------------- ------------------------------------------
1 1/30
2 2/30
3 3/30
4 4/30
5 5/30
6 6/30
7 7/30
8 8/30
9 9/30
10 10/30
11 11/30
12 12/30
13 13/30
14 14/30
15 15/30
16 16/30
17 17/30
18 18/30
19 19/30
20 20/30
21 21/30
22 22/30
23 23/30
24 24/30
25 25/30
26 26/30
27 27/30
28 28/30
29 29/30
30 30/30
