EXHIBIT 4.2
VAUGHN COMMUNICATIONS, INC.
NONSTATUTORY OPTION AGREEMENT
(1995 Stock Option Plan amended as of June 20,1995)
VAUGHN COMMUNICATIONS, INC., a Minnesota corporation (the "Company"),
pursuant to the 1995 Stock Option Plan previously adopted by the Board of
Directors of the Company (the "Plan"), and in consideration of services to be
rendered to the Company or its subsidiary
by ________________________________ as ______________________________________
(Name) (Title or Job Description)
(the "Optionee"), hereby grants to the Optionee a nonstatutory stock option (the
"Option") not in accordance with Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), to purchase _________ shares of the Company's
Common Stock (the "Shares") at a price of $______ per share (the "Purchase
Price"), equal to ___% (must be 85% or more) of the fair market value of the
Common Stock on the date of grant. This grant is made on the following terms and
conditions.
NONSTATUTORY STOCK OPTION
1. The Optionee may exercise the Option on a cumulative basis at any time
six (6) months after the date hereof and on or before ____________, ___ (ten)
(10) years after such date of grant) [provided, however, that the Option shall
not be exercisable, unless and until the amendments to the Plan adopted by the
Board of Directors as of June 20, 1995, have been approved by the shareholders
of the Company as provided in the Plan as so amended], subject to prior
termination or modification as herein provided, in whole or in part with respect
to each of five (5) year to year cumulative annual installments, beginning on
the first day of each of the first five years during the aforesaid term hereof
as follows:
(a) ten percent (10%) of such Shares during the first year of the
Option term;
(b) plus an additional fifteen percent (15%) of such Shares during
the second year of the Option term;
(c) plus an additional twenty-five percent (25%) of such Shares
during the third year of the Option term;
(d) plus an additional twenty-five percent (25%) of such shares
during the fourth year of the Option term; and
(e) plus an additional twenty-five percent (25%) of such Shares
during the fifth and remaining years of the Option term.
2. The Option shall not be transferable by the Optionee, except by will
or the laws of descent and distribution. During the Optionee's life, the Option
shall be exercisable only by the Optionee and only while and if the Optionee is
continuously employed by the Company or a subsidiary of the Company as described
in the Plan, except as provided in Section 4 of this Agreement. If the Option
shall not have terminated prior to the death of the Optionee, it may be
exercised at any time during the balance of the term of the Option by the
personal representative of the Optionee's estate and/or by the Optionee's heirs,
as the case may be, subject to prior expiration on the date specified in Section
4 of this Agreement.
3. The Option may be exercised in whole or in part, from time to time, by
delivery to the Secretary of the Company of a written notice specifying the
number of Shares desired to be purchased and accompanied by full payment of the
Purchase Price, at the election of the Optionee, in cash and/or by delivery of
certificate(s) duly endorsed for transfer, in shares of the Company's Common
Stock already owned by the Optionee. Any shares endorsed and delivered to the
Company in payment of the Purchase Price shall be valued at the fair market
value of the shares on
the date of exercise, as determined by the Compensation Committee of the
Company's Board of Directors (the "Committee") in accordance with the Plan or by
the President or Secretary of the Company acting as the Committee's designated
representative. Any fractional share not required for payment of the Purchase
Price shall be paid for by the Company in cash on the basis of the same value
utilized for such exercise. If at the time of exercise the Committee, in its
sole discretion, shall permit utilization of a so-called "cashless exercise"
procedure to exercise the Option, the Optionee may apply to the Company's
President or Secretary to utilize the same, and if approved thereby, the
Optionee shall follow the "cashless exercise" procedures specified in the Plan
and in accordance with such rules therefor as the Committee may from time to
time establish.
4. All unexercised rights under the Option shall expire at the end of the
term specified in Section 1 above or on an earlier date, in the event of prior
termination of employment by the Company or its subsidiary of the Optionee, as
follows:
(a) Upon termination of employment of the Optionee by retirement of
Optionee at or after age 65 or by disability or death, the Option may be
exercised during the balance of its term notwithstanding such termination
of employment and, in the case of death, as provided in Section 2 above;
provided, however, that the percentage limitations set forth in Section
1(a) through (e) above shall not apply; and provided, further, that the
Committee may (but without any obligation therefor) by prior approval,
which approval the Committee may grant, withhold or condition for any
reason it deems to be in the best interest of the Company, also permit the
Optionee to retire to the same effect or on any less favorable basis prior
to age 65; or
(b) Upon termination of employment of the Optionee for any other
reason, the Option shall expire on the date the Optionee's employment
terminates.
5. Unless the issuance of the Shares purchased upon the exercise of the
Option is registered with federal and state securities authorities (which is
anticipated but for which the Company has no obligation), or is determined by
counsel for the Company to be exempt from such registration without need
therefor, the Optionee shall be required to sign, deliver to the Company and be
bound by a customary "investment letter," setting forth the Optionee's
investment representation and securities law transfer restrictions consistent
with federal and state securities law exemptions from registration for issuance
of the Shares on exercise and consistent with Rule 144 under the Securities Act
of 1933, and requisite legends and stop transfer orders shall be placed upon or
against the certificate for the Shares. Without regard to registration or
exemption therefrom on exercise, if the Optionee is an officer or other
"affiliate" of the Company within the meaning of said Rule 144, the securities
law transfer restrictions consistent with said Rule 144 shall in any event be
applicable and requisite legends in the form attached as Exhibit A hereto and
stop transfer orders shall be placed upon or against the certificate for the
Shares.
6. If prior to the expiration of the Option, the Shares then subject to
the Option shall be affected by any recapitalization, merger, consolidation,
reorganization, stock dividend, stock split, or other change in capitalization
affecting the present Common Stock of the Company, then the number and kind of
Shares covered by this Agreement, and the Purchase Price per share, shall be
appropriately adjusted in accordance with the Plan by the Committee or by the
President or Secretary of the Company acting as the Committee's designated
representative, all as may be deemed necessary to prevent dilution or
enlargement of rights which might otherwise result.
7. It is intended that those terms of the Plan and this Agreement which
refer or apply to nonstatutory options comply and be interpreted in accordance
with the provisions of Rule 16b-3
under the Securities Exchange Act of 1934, as amended. The provisions of the
Plan pertaining to Options, to the extent not set forth in this Agreement, are
incorporated by reference.
ADDITIONAL PRECONDITIONS TO EXERCISE.
8. A "Statement of Additional Terms and Conditions," determined by the
Committee and not inconsistent with the Plan, may be attached hereto as part
hereof. Satisfaction of the additional terms and conditions set forth in such
attached Statement, if any, shall be additional preconditions to vesting and
exercise of the Option, or so much thereof as shall correspond to the extent
such terms and conditions are ultimately satisfied. If attached, such Statement
shall be separately acknowledged by the signatures of the Optionee and an
appropriate officer of the Company.
IN WITNESS WHEREOF, this Nonstatutory Option Agreement is hereby executed
as of _____________(date of grant).
VAUGHN COMMUNICATIONS, INC.
By
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Its
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Optionee
______ Check if a Statement of Additional Terms and Conditions is attached.
If attached, such Statement must be signed by both the Optionee and an
appropriate officer of the Company.
EXHIBIT A
OFFICER/AFFILIATE
TRANSFER RESTRICTION LEGEND
The registered holder of the within certificate may be an "affiliate"
of the Company on the date of issue of this certificate within the meaning of
Rule 144 promulgated under the Securities Act of 1933, as amended. Accordingly,
the securities represented by the within certificate may not be sold,
transferred, pledged or otherwise disposed of, except pursuant to registration
or notification under such laws, exemption from such registration as evidenced
by an opinion of counsel satisfactory to the Company, or operation of law.