Exhibit 4.3
ITC LEARNING CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE
-----------------------------------------------------
DIRECTORS
---------
AGREEMENT ("Agreement") dated the ___th day of ____, 1998 by and
between ITC Learning Corporation, a Maryland corporation ("Corporation"), and
, a non-employee director of the Corporation ("Optionee").
- ----------
WHEREAS, the Corporation desires to have Optionee remain as a director
of the Corporation and to provide Optionee with an incentive by sharing in the
success of the Corporation;
WHEREAS, in order to provide such an incentive to non-employee
directors, the Corporation has adopted the ITC Learning Corporation 1998
Incentive Stock Plan ("Plan");
WHEREAS, the Corporation desires to grant to Optionee under the Plan
options not intended to qualify as "incentive stock options" within the meaning
of Section 422 or any successor provision of the Internal Revenue Code of 1986,
as amended ("Code"); and
WHEREAS, unless otherwise provided herein, capitalized terms used in
this Agreement shall have the meaning given them in the Plan;
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. NUMBER OF SHARES AND PRICE. The Corporation hereby grants to the
Optionee an option ("Option") to purchase _____ shares of Common Stock. The
exercise price per share of Common Stock of the Option shall be $______ per
share. The Option is a Non-Qualified Stock Option.
2. TERM AND EXERCISE. The Option shall expire five (5) years from the
date hereof, subject to earlier termination as set forth in Section 3. Subject
to the provisions of Section 3, the Option shall become exercisable in
installments as set forth on the last page of this Agreement. Notwithstanding
anything to the contrary in this Agreement, this Option shall terminate and be
void and of no effect if the Plan is not approved by the holders of Voting Stock
at the Corporation's 1998 annual meeting of shareholders.
3. EXERCISE OF OPTION UPON TERMINATION OF SERVICE.
(a) If a Optionee's service with the Corporation terminates by
reason of death, the Option may be exercised for a period of one (1) year from
the date of death or until the expiration of the Option pursuant to Section 2,
whichever is shorter. If the Optionee's service with the Corporation terminates
other than by reason of death, the Option may be exercised for a period of three
(3) months from the date of such termination, or until the expiration of the
stated term of the Option pursuant to Section 2, whichever is shorter.
(b) In the event the Optionee's service with the Corporation
terminates for any reason, all or part of the Option that was not exercisable as
of the date of such termination of service shall expire at the date of such
termination of service.
4. EXERCISE PROCEDURES. The Option shall be exercisable by written
notice to the Corporation, which must be received by the Secretary of the
Corporation not later than 5:00 P.M. local time at the principal executive
office of the Corporation on the expiration date of the Option. Such written
notice shall set forth (a) the number of shares of Common Stock being purchased,
(b) the total exercise price for the shares of Common Stock being purchased, (c)
the exact name as it should appear on the stock certificate(s) to be issued for
the shares of Common Stock being purchased, and (d) the address to which the
stock certificate(s) should be sent. The exercise price of shares of Common
Stock purchased upon exercise of the Option shall be paid in full (a) in cash,
(b) by delivery to the Corporation of already owned shares of Common Stock that
have been held by the Optionee for at least six months, (c) in any combination
of cash and already owned shares of Common Stock that have been held by the
Optionee for at least six months, or (d) by delivery of such other consideration
as the Administrator deems appropriate and in compliance with applicable law
(including payment in accordance with a cashless exercise program approved by
the Administrator).
In the event that any shares of Common Stock shall be transferred to
the Corporation to satisfy all or any part of the exercise price, the part of
the exercise price deemed to have been satisfied by such transfer of shares of
Common Stock shall be equal to the product derived by multiplying the Fair
Market Value as of the date of exercise times the number of shares of Common
Stock transferred to the Corporation. The Optionee may not transfer to the
Corporation in satisfaction of the exercise price any fraction of a share of
Common Stock, and any portion of the exercise price that would represent less
than a full share of Common Stock must be paid in cash by the Optionee.
Subject to Section 8 hereof, certificates for the purchased shares of
Common Stock will be issued and delivered to the Optionee as soon as practicable
after the receipt of such payment of the exercise price; PROVIDED, HOWEVER, that
delivery of any such shares of Common Stock shall be deemed effected for all
purposes when a stock transfer agent of the Corporation shall have deposited
such certificates in the United States mail, addressed to Optionee, at the
address set forth on the last page of this Agreement or to such other address as
Optionee may from time to time designate in a written notice to the Corporation.
The Optionee shall not be deemed for any purpose to be a shareholder of the
Corporation in respect of any shares of Common Stock as to which the Option
shall not have been exercised, as herein provided, until such shares of Common
Stock have been issued to Optionee by the Corporation hereunder.
5. PLAN PROVISIONS CONTROL OPTION TERMS; MODIFICATIONS. The Option is
granted pursuant and subject to the terms and conditions of the Plan, the
provisions of which are incorporated herein by reference. In the event any
provision of this Agreement shall conflict with any of the terms in the Plan as
constituted on the Date of Grant, the terms of the Plan as constituted on the
Date of Grant shall control. The Option shall not be modified after the Date of
Grant except by express written agreement between the Corporation and the
Optionee; PROVIDED, HOWEVER, that any such modification (a) shall not be
inconsistent with the terms of the Plan, and (b) shall be approved by the
Administrator.
6. LIMITATIONS ON TRANSFER. The Option may not be assigned or
transferred other than by will or the laws of descent and distribution. The
Optionee's Beneficiary may exercise the Optionee's rights hereunder only to the
extent they were exercisable under this Agreement at the date of the death of
the Optionee and are otherwise currently exercisable.
7. TAXES. The Corporation shall be entitled, if the Administrator deems
it necessary or desirable, to withhold (or secure payment from the Optionee in
lieu of withholding) the amount of any withholding or other tax required by law
2
to be withheld or paid by the Corporation with respect to the Option. The
Corporation may defer issuance of Common Stock under the Option unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the
Administrator or its delegate and shall be payable by the Optionee at such time
as the Administrator determines. The Optionee shall be permitted to satisfy his
or her tax or withholding obligation by (a) having cash withheld from the
Optionee's salary or other compensation payable by the Corporation or a
Subsidiary, (b) the payment of cash by the Optionee to the Corporation, (c) the
payment in shares of Common Stock already owned by the Optionee valued at Fair
Market Value, and/or (d) the withholding from the Option, at the appropriate
time, of a number of shares of Common Stock sufficient, based upon the Fair
Market Value of such Common Stock, to satisfy such tax or withholding
requirements.
8. NO EXERCISE IN VIOLATION OF LAW. Notwithstanding any of the
provisions of this Agreement, the Optionee hereby agrees that he or she will not
exercise the Option granted hereby, and that the Corporation will not be
obligated to issue any shares of Common Stock to the Optionee hereunder, if the
exercise thereof or the issuance of such shares of Common Stock shall constitute
a violation by the Optionee or the Corporation of any provision of any law or
regulation of any governmental authority. Any determination in this connection
by the Administrator shall be final, binding and conclusive.
9. SECURITIES LAW COMPLIANCE. The Optionee acknowledges that the shares
of Common Stock issuable on exercise of the Option may not have been registered
under the Securities Act of 1993, as amended ("Act"). In such case, the Optionee
represents and acknowledges that such shares of Common Stock, when purchased,
shall be held for investment and not with a view to the sale or distribution of
any part thereof, and that the Optionee may be required to bear the economic
risk of his or her investment for an indefinite period of time. The Optionee
further represents and warrants that the Optionee and his or her Beneficiaries
will not sell or otherwise dispose of these shares of Common Stock except
pursuant to an effective registration statement under the Act or in a
transaction that, in the opinion of counsel for the Corporation, is exempt from
registration under the Act.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: ITC LEARNING CORPORATION
By:
- -------------------------- ------------------------------
Name:
----------------------------
Title:
---------------------------
WITNESS: OPTIONEE
- -------------------------- ---------------------------------
* * * * *
3
Installment Exercise Schedule:
Cumulative Number of Shares
of Common Stock in Respect
Vesting Schedule of which Option is Exercisable
---------------- ------------------------------
Notice Addresses:
If to the Corporation: If to the Optionee:
ITC Learning Corporation -----------------------------
13515 Dulles Technology Drive -----------------------------
Herndon, Virginia 20171-3413 -----------------------------
Attention: Chief Financial Officer
4