INCENTIVE STOCK OPTION AGREEMENT
UNDER THE
TECHNE CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
THIS AGREEMENT, made effective as of this _____ day of
_______________, 19____, by and between Techne Corporation, a Minnesota
corporation (the "Company"), and_________________________________________
("Optionee").
W I T N E S S E T H:
WHEREAS, Optionee on the date hereof is a key employee or officer of
the Company or one of its Subsidiaries; and
WHEREAS, the Company wishes to grant an incentive stock option to
Optionee to purchase shares of the Company's Common Stock pursuant to the
Company's 1997 Stock Option Plan (the "Plan"); and
WHEREAS, the Administrator of the Plan has authorized the grant of an
incentive stock option to Optionee and has determined that, as of the
effective date of this Agreement, the fair market value of the Company's
Common Stock is $________ per share;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee on the
date set forth above (the "Date of Grant"), the right and option (the
"Option") to purchase all or portions of an aggregate of ________________
(____________)shares of Common Stock at a per share price of $__________ on
the terms and conditions set forth herein, and subject to adjustment pursuant
to Section 11 of the Plan. Except as otherwise provided in Paragraphs 2(b)
and 2(c) below, this Option is intended to be an incentive stock option
within the meaning of Section 422, or any successor provision, of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder.
2. Duration and Exercisability.
a. The term during which this Option may be exercised shall
terminate on _________________, ________ except as otherwise provided in
Section 11 of the Plan and Paragraphs 2(b) through 2(e) below. This Option
shall become exercisable according to the following schedule:
Percentage/Number
Vesting Date of Shares
------------ ------------------
In the event of a "change in control transaction" this option shall become
immediately exercisable as to all shares unless such transaction is
accounted for on a pooling of interests basis as provided in Section 11 of
the Plan. If Optionee does not purchase upon an exercise of this Option
the full number of shares which Optionee is then entitled to purchase,
Optionee may purchase upon any subsequent exercise prior to this Option's
termination such previously unpurchased shares in addition to those
Optionee is otherwise entitled to purchase.
For purposes of this Agreement, a "change of control
transaction" means an acquisition of the Company through the sale of
substantially all of the Company's assets and the consequent discontinuance
of its business or through a merger, consolidation, exchange,
reorganization, reclassification, extraordinary dividend, divestiture
(including a spin-off) or liquidation of the Company.
b. Termination of Employment (other than Change of Control,
Disability or Death). If Optionee's employment with the Company or any
Subsidiary is terminated for any reason other than because of a "change of
control transaction" as described in Paragraph 2(c) or because of
disability or death, this Option shall completely terminate on the earlier
of (i) the close of business on the three-month anniversary date of such
termination of employment, and (ii) the expiration date of this Option
stated in Paragraph 2 above. In such period following the termination of
Optionee's employment or, if applicable, such other relationship, this
Option shall be exercisable only to the extent the Option was exercisable
on the vesting date immediately preceding such termination of employment or
such other relationship, but had not previously been exercised. To the
extent this Option was not exercisable upon such termination of employment
or such other relationship, or if Optionee does not exercise the Option
within the time specified in this Paragraph 2(b), all rights of Optionee
under this Option shall be forfeited.
c. Change of Control. Subject to the provisions of Section 11
of the Plan, if (i) Optionee's employment with the Company or any
Subsidiary is terminated because of a "change of control transaction," (ii)
such transaction is treated as a "pooling of interests" under generally
accepted accounting principles, and (iii) Optionee is an "affiliate" of the
Company or Subsidiary under applicable legal and accounting principles,
this Option shall completely terminate on the later of (A) the close of
business on the three-month anniversary date of such termination of
employment or (B) the close of business on the date that is sixty (60) days
after the date on which affiliates are no longer restricted from selling,
transferring or otherwise disposing of the shares of stock received in the
change of control transaction. Notwithstanding the foregoing, if, upon
such termination of employment, Optionee continues to serve as a
consultant, advisor or nonemployee director of the Company or Subsidiary,
this Option shall terminate on the later of (X) the close of business on
the three-month anniversary date of the termination of all of Optionee's
relationships with the Company or Subsidiary, and (Y) the close of business
on the date that is sixty (60) days after the date on which affiliates are
no longer restricted from selling, transferring or otherwise disposing of
the shares of stock received in the change of control transaction, and this
Option shall not, upon Optionee's termination of employment, be treated as
an incentive stock option within the meaning of Code Section 422.
In such period following the termination of Optionee's
employment or, if applicable, such other relationship, this Option shall be
exercisable only to the extent the Option was exercisable on the vesting
date immediately preceding such termination of employment or such other
relationship, but had not previously been exercised, unless the
exercisability of this Option has been accelerated as provided in Section
11 of the Plan. To the extent this Option was not exercisable upon such
termination of employment or such other relationship, or if Optionee does
not exercise the Option within the time specified in this Paragraph 2(c),
all rights of Optionee under this Option shall be forfeited. If Optionee
exercises this Option on a date that is after the three-month anniversary
of the termination of Optionee's employment or on a date that is more than
ten years (or five years, if applicable) after the Date of Grant, this
Option shall not be treated as an incentive stock option within the meaning
of Code Section 422.
d. Disability. If Optionee ceases to be an employee of the
Company or any Subsidiary due to disability (as such term is defined in
Code Section 22(e)(3), or any successor provision), this Option shall
completely terminate on the earlier of (i) the close of business on the six-
month anniversary date of such termination of employment, and (ii) the
expiration date under this Option stated in Paragraph 2(a) above. In such
period following such termination of employment, this Option shall be
exercisable only to the extent the Option was exercisable on the vesting
date immediately preceding the date of Optionee's termination of
employment. If Optionee does not exercise the Option within the time
specified in this Paragraph 2(d), all rights of Optionee under this Option
shall be forfeited.
e. Death. In the event of Optionee's death, this Option shall
terminate on the earlier of (i) the close of business on the six-month
anniversary date of the date of Optionee's death, and (ii) the expiration
date of this Option stated in Paragraph 2(a) above. In such period
following Optionee's death, this Option shall be exercisable by the person
or persons to whom Optionee's rights under this Option shall have passed by
Optionee's will or by the laws of descent and distribution only to the
extent the Option was exercisable on the vesting date immediately preceding
the date of Optionee's death. If such person or persons do not exercise
this Option within the time specified in this Paragraph 2(e), all rights
under this Option shall be forfeited.
3. Manner of Exercise.
a. General. The Option may be exercised only by Optionee (or
other proper party in the event of death or incapacity), subject to the
conditions of the Plan and subject to such other administrative rules as
the Administrator may deem advisable, by delivering within the Option
Period written notice of exercise to the Company at its principal office.
The notice shall state the number of shares as to which the Option is being
exercised and shall be accompanied by payment in full of the Option price
for all shares designated in the notice. The exercise of the Option shall
be deemed effective upon receipt of such notice by the Company and upon
payment that complies with the terms of the Plan and this Agreement. The
Option may be exercised with respect to any number or all of the shares as
to which it can then be exercised and, if partially exercised, may be so
exercised as to the unexercised shares any number of times during the
Option period as provided herein.
b. Form of Payment. Subject to approval by the Administrator,
payment of the Option price by Optionee shall be in the form of cash,
personal check, certified check or previously acquired shares of Common
Stock of the Company, or any combination thereof. Any stock so tendered as
part of such payment shall be valued at its Fair Market Value as provided
in the Plan. For purposes of this Agreement, "previously acquired shares
of Common Stock" shall include shares of Common Stock that are already
owned by Optionee at the time of exercise.
c. Stock Transfer Records. As soon as practicable after the
effective exercise of all or any part of the Option, Optionee shall be
recorded on the stock transfer books of the Company as the owner of the
shares purchased, and the Company shall deliver to Optionee one or more
duly issued stock certificates evidencing such ownership. All requisite
original issue or transfer documentary stamp taxes shall be paid by the
Company.
4. Miscellaneous.
a. Employment; Rights as Shareholder. This Agreement shall not
confer on Optionee any right with respect to continuance of employment by
the Company or any of its Subsidiaries, nor will it interfere in any way
with the right of the Company to terminate such employment. Optionee shall
have no rights as a shareholder with respect to shares subject to this
Option until such shares have been issued to Optionee upon exercise of this
Option. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the
date such shares are issued, except as provided in Section 10 of the Plan.
b. Securities Law Compliance. The exercise of all or any parts
of this Option shall only be effective at such time as counsel to the
Company shall have determined that the issuance and delivery of Common
Stock pursuant to such exercise will not violate any state or federal
securities or other laws. Optionee may be required by the Company, as a
condition of the effectiveness of any exercise of this Option, to agree in
writing that all Common Stock to be acquired pursuant to such exercise
shall be held, until such time that such Common Stock is registered and
freely tradable under applicable state and federal securities laws, for
Optionee's own account without a view to any further distribution thereof,
that the certificates for such shares shall bear an appropriate legend to
that effect and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.
c. Mergers, Recapitalizations, Stock Splits, Etc. Pursuant and
subject to Section 11 of the Plan, certain changes in the number or
character of the Common Stock of the Company (through sale, merger,
consolidation, exchange, reorganization, divestiture (including a spin-
off), liquidation, recapitalization, stock split, stock dividend or
otherwise) shall result in an adjustment, reduction or enlargement, as
appropriate, in Optionee's rights with respect to any unexercised portion
of the Option (i.e., Optionee shall have such "anti-dilution" rights under
the Option with respect to such events, but shall not have "preemptive"
rights).
d. Shares Reserved. The Company shall at all times during the
option period reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.
e. Withholding Taxes on Disqualifying Disposition. In the
event of a disqualifying disposition of the shares acquired through the
exercise of this Option, Optionee hereby agrees to inform the Company of
such disposition. Upon notice of a disqualifying disposition, the Company
may take such action as it deems appropriate to insure that, if necessary
to comply with all applicable federal or state income tax laws or
regulations, all applicable federal and state payroll, income or other
taxes are withheld from any amounts payable by the Company to Optionee.
If the Company is unable to withhold such federal and state taxes, for
whatever reason, Optionee hereby agrees to pay to the Company an amount
equal to the amount the Company would otherwise be required to withhold
under federal or state law. Optionee may, subject to the approval and
discretion of the Administrator or such administrative rules it may deem
advisable, elect to have all or a portion of such tax withholding
obligations satisfied by delivering shares of the Company's Common Stock
having a fair market value equal to such obligations.
f. Nontransferability. During the lifetime of Optionee, the
accrued Option shall be exercisable only by Optionee or by the Optionee's
guardian or other legal representative, and shall not be assignable or
transferable by Optionee, in whole or in part, other than by will or by the
laws of descent and distribution.
g. 1997 Incentive Stock Option Plan. The Option evidenced by
this Agreement is granted pursuant to the Plan, a copy of which Plan has
been made available to Optionee and is hereby incorporated into this
Agreement. This Agreement is subject to and in all respects limited and
conditioned as provided in the Plan. The Plan governs this Option and, in
the event of any questions as to the construction of this Agreement or in
the event of a conflict between the Plan and this Agreement, the Plan shall
govern, except as the Plan otherwise provides.
h. Lockup Period Limitation. Optionee agrees that in the event
the Company advises Optionee that it plans an underwritten public offering
of its Common Stock in compliance with the Securities Act of 1933, as
amended, and that the underwriter(s) seek to impose restrictions under
which certain shareholders may not sell or contract to sell or grant any
option to buy or otherwise dispose of part or all of their stock purchase
rights of the underlying Common Stock, Optionee hereby agrees that for a
period not to exceed 180 days from the prospectus, Optionee will not sell
or contract to sell or grant an option to buy or otherwise dispose of this
option or any of the underlying shares of Common Stock without the prior
written consent of the underwriter(s) or its representative(s).
i. Accounting Compliance. Optionee agrees that, in the event a
"change of control transaction" (as defined in Paragraph 2(a) above) is
treated as a "pooling of interests" under generally accepted accounting
principles and Optionee is an "affiliate" of the Company or any Subsidiary
(as defined in applicable legal and accounting principles) at the time of
such change of control transaction, Optionee will comply with all
requirements of pooling accounting rules and Rule 145 under the Securities
Act of 1933, as amended, and the requirements of such other legal or
accounting principles as may be applicable, and will execute any documents
necessary to ensure such compliance.
j. Stock Legend. The certificates for any shares of Common
Stock purchased by Optionee (or, in the case of death, Optionee's
successors) shall bear an appropriate legend to reflect the restrictions of
Paragraphs 4(b), 4(h) and 4(i) of this Agreement.
k. Scope of Agreement. This Agreement shall bind and inure to
the benefit of the Company and its successors and assigns and Optionee and
any successor or successors of Optionee permitted by Paragraph 4(f) above.
l. Arbitration. Any dispute arising out of or relating to this
Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement
of any such controversy. If, notwithstanding, such dispute cannot be
resolved, such dispute shall be settled by binding arbitration. Judgment
upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator shall be a retired state or
federal judge or an attorney who has practiced securities or business
litigation for at least 10 years. If the parties cannot agree on an
arbitrator within 20 days, any party may request that the chief judge of
the District Court for Hennepin County, Minnesota, select an arbitrator.
Arbitration will be conducted pursuant to the provisions of this Agreement,
and the commercial arbitration rules of the American Arbitration
Association, unless such rules are inconsistent with the provisions of this
Agreement, but without submission of the dispute to such Association.
Limited civil discovery shall be permitted for the production of documents
and taking of depositions. Unresolved discovery disputes may be brought to
the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a
court of this state could order or grant; provided, however, that punitive
or exemplary damages shall not be awarded. The arbitrator may award to the
prevailing party, if any, as determined by the arbitrator, all of its costs
and fees, including attorneys' fees. Unless otherwise agreed by the
parties, the place of any arbitration proceedings shall be Hennepin County,
Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
TECHNE CORPORATION
By:__________________________
Its:_____________________
______________________________
Optionee