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EXHIBIT 99.2
Grant #______
TELEBIT CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
TELEBIT CORPORATION, a California corporation (the "Company"),
has granted to _______________________ (the "Optionee"), an option to purchase a
total of ______ shares of Common Stock (the "Shares"), at the price determined
as provided herein, and in all respects subject to the terms, definitions and
provisions of the 1985 Employee Stock Incentive Program (the "Program") adopted
by the Company which is incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Program shall have the same defined
meanings in this Option Agreement.
1. Nature of the Option. This Option is intended to qualify as
an Incentive Stock Option as defined in Section 422A of the Internal Revenue
Code of 1986 (the "Code").
2. Exercise Price. The exercise price is $___________ for each
share of Common Stock, which price is not less than the Fair Market Value per
share of Common Stock on the date of grant.
3. Exercise of Option. This Option shall be exercisable during
its term, unless waived by the Company, not more frequently than four (4) times
during any calendar year and in accordance with the provisions of Section 8 of
the Program as follows:
(a) Right to Exercise.
(i) Subject to subsections 3(a) (ii) and (iii), below,
this Option shall be exercisable immediately.
(ii) This Option may not be exercised for a fraction of
a share.
(iii) In the event of Optionee's death, disability or
other termination of employment, the exercisability of the Option is governed by
Sections 6, 7 and 8 below, subject to the limitations contained in subsection
3(a)(iv).
(iv) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in Section 10 below.
(b) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of the Common Stock as may be required by the Company pursuant to
the provisions of the Program. Such written notice, attached hereto as Exhibit
1, shall be signed by the Optionee and shall be delivered in person or by
certified
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mail to the Secretary of the Company. The written notice shall be accompanied by
payment of the exercise price. This Option shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the exercise price.
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
4. Method of Payment. Payment of the exercise price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash,
(b) check; or
(c) surrender of other Shares of Common Stock of the
Company which (i) either have been owned by the Optionee for more than six (6)
months on the date of surrender or were not acquired, directly or indirectly,
from the Company and (ii) have a Fair Market Value on the date of surrender
equal to the exercise price of the Shares as to which the Option is being
exercised.
5. Restrictions on Exercise. This Option may not be exercised
until such time as the Program has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any
rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation
G") as promulgated by the Federal Reserve Board. As a condition to the exercise
of this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
6. Termination of Status as an Employee. In the event of
termination of Optionee's Continuous Status as an Employee, Optionee may, but
only within thirty (30) days after the date of such termination (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 10 below), exercise this Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise this Option at the date of such termination, or if
Optionee does not exercise this Option within the time specified herein, the
Option shall terminate.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE
AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
THIS OPTION OR ACQUIRING SHARES
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HEREUNDER). THE OPTIONEE UNDERSTANDS THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
CONFER ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHTS OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.
7. Disability of Optionee. Notwithstanding the provisions of
Section 6 above, in the event of termination of Optionee's Continuous Status as
an Employee as a result of his total and permanent disability (as defined in
Section 22(e)(3) of the Internal Revenue Code), Optionee may, but only within
six (6) months from the date of termination of employment (but in no event later
than the date of expiration of the term of this Option as set forth in Section
10 below), exercise his or her Option to the extent otherwise so entitled at the
date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination or if Optionee does not exercise
such Option (to the extent otherwise so entitled) within the time specified
herein, the Option shall terminate.
8. Death of Optionee. In the event of the death of Optionee:
(a) during the term of this Option and while an Employee of
the Company and having been in Continuous Status as an Employee since the date
of grant of the Option, the Option may be exercised, at any time within six (6)
months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that Optionee on the date of death was entitled to exercise it at the
date of death; or
(b) within thirty (30) days after the termination of
Optionee's Continuous Status as an Employee, for any reason other than for cause
or a voluntary termination initiated by the Optionee, the Option may be
exercised, at any time within six (6) months following the date of death, by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of termination.
9. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
10. Term of Option. This Option may not be exercised more than
five (5) years from the date of grant of this Option, and may be exercised
during such term only in accordance with the terms of the Program and the terms
of this Option.
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11. Early Disposition of Stock. Optionee understands that if
he disposes of any Shares received under this Option within two (2) years after
the date of this Agreement or within one (1) year after such Shares were
transferred to him, he will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount generally
measured by the difference between the price paid for the Shares and the lower
of the fair market value of the Shares on the date of the exercise or the fair
market value of the Shares at the date of disposition. The amount of such
ordinary income may be measured differently if Optionee is an officer, director
or 10% shareholder of the Company, or if the Shares were subject to a
substantial risk of forfeiture at the time they were transferred to Optionee.
Optionee hereby agrees to notify the Company in writing within 30 days after the
date of any such disposition. Optionee understands that if he disposes of such
Shares at any time after the expiration of such two-year and one-year holding
periods, any gain on such sale will be taxed as long-term capital gain.
DATE OF GRANT: _____________________, 199__
TELEBIT CORPORATION,
a California corporation
By:
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Title:
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Optionee acknowledges receipt of a copy of the Program, a copy
of which is annexed hereto, and represents that he is familiar with the terms
and provisions thereof, and hereby accepts this Option subject to all of the
terms and provisions thereof. Optionee has had an opportunity to obtain the
advice of counsel prior to executing this Option and hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under the Program. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.
Dated:
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Optionee
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Social Security #
Residence Address:
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CONSENT
The undersigned spouse of Optionee agrees that the spouse's
interest in the Stock subject to this Agreement shall be irrevocably bound by
this Agreement and further understands and agrees that any community property
interest, if any, shall be similarly bound by this Agreement.
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Spouse of Optionee
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