1
Page 13 FORM 10-Q
EXHIBIT 10.613
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE
DAEDALUS ENTERPRISES, INC.
LONG-TERM INCENTIVE PLAN
THIS AGREEMENT is entered into effective as of [DATE] by and between DAEDALUS
ENTERPRISES, INC. ("Corporation") and <OPTIONEE> ("Optionee"), pursuant to the
Corporation's Long-term Incentive Plan (the "Plan"). The Corporation hereby
grants to the Optionee an Incentive Stock Option under Section 422 of the
Internal Revenue Code of 1986, as amended, to purchase a total of <TOTAL
SHARES> shares of Common Stock, subject to the terms and conditions contained
in the Plan and as hereinafter provided (the "Option"). Capitalized terms not
defined in this Agreement shall have the meanings respectively ascribed to them
in the Plan.
OPTION PRICE
The Option shall be exercisable at a price of $[PRICE-PER-SHARE] per share.
OPTION EXERCISE
1. The Option shall become exercisable in installments as follows:
Date Number
---- ------
<DATE 1> <GRANT 1> shares
<DATE 2> an additional <GRANT 2> shares
To the extent not exercised, installments shall accumulate and
the Optionee may exercise them thereafter in whole or in part. In
the event of a Change in Control, the Option immediately shall
become exercisable in full. Any provision of this Agreement to the
contrary notwithstanding, the Option shall expire on, and no longer
be exercisable after, the date which is the <NUMBER OF YEARS>
anniversary of the date of this Agreement (the "Expiration Date").
2. The Option shall be exercisable by delivery to the President of the
Corporation of a written and duly executed notice in the form
attached hereto.
3. Payment of the full purchase price of any shares with respect to
which the Option is being exercised shall accompany the notice
of exercise of the Option. Payment shall be made in any of the
following ways: (a) in cash, (b) by certified check, bank draft or
money order, or (c) by delivery to the Corporation of a properly
executed exercise notice, acceptable to the Corporation, together
with irrevocable instructions to the Optionee's broker to deliver
to the Corporation
2
Page 14 FORM 10-Q
sufficient cash to pay the exercise price and any applicable
income and employment withholding taxes (the "cashless exercise
procedure").
TERMINATION
1. Termination Before Option Becomes Exercisable. If Optionee's
employment is terminated for any reason prior to the date that
the Option or a portion thereof first becomes exercisable, such
Option or portion thereof shall terminate and all rights
thereunder shall cease.
2. Termination After Option Becomes Exercisable. To the extent an
Option is exercisable and unexercised on the date the Optionee's
employment is terminated:
(a) for any reason other than death, disability or retirement,
the Option shall terminate on the earlier of (i) the expiration
date of the Option, and (ii) the first anniversary of such
Optionee's termination;
(b) because the Optionee has died or become subject to a
disability, the Option shall terminate on the first anniversary of
the date of the Optionee's termination; or
(c) due to retirement, the Option shall terminate on the
earlier of (i) the expiration date, and (ii) the second
anniversary of the Optionee's termination.
During the period from the Optionee's termination until the
termination of the Option, the Optionee, or the person or persons
to whom the Option shall have been transferred by will or by the
laws of descent and distribution, may exercise the Option only to
the extent that such Option was exercisable on the date of the
Optionee's termination. Unless the Option is exercised within
three months following the Optionee's termination of employment
(extended to one year in the event of the Optionee's disability),
the Option shall be taxed as a "nonqualified stock option" under
Section 83 of the Internal Revenue Code ("Code") and shall not
receive the favorable capital gain tax treatment of an "incentive
stock option" under Section 422 of the Code.
OPTIONEE'S AGREEMENT
The Optionee agrees to all the terms stated in this Agreement, as well as to
the terms of the Plan, a copy of which is attached hereto and of which the
Optionee acknowledges receipt.
3
Page 15 FORM 10-Q
RIGHTS AS SHAREHOLDER
The Optionee shall have no rights as a shareholder of the Corporation
with respect to any of the shares covered by the Option until the issuance of a
stock certificate or certificates upon the exercise of the Option, and then
only with respect to the shares represented by such certificate or
certificates. No adjustment shall be made for dividends or other rights with
respect to such shares for which the record date is prior to the date such
certificate or certificates are issued.
NON-TRANSFERABILITY OF OPTION
The Option shall not be transferred in any manner other than by will or the
laws of descent or distribution. During the lifetime of the Optionee, the
Option shall be exercised only by the Optionee. No transfer of the Option
shall be effective to bind the Corporation unless the Corporation shall have
been furnished with written notice thereof and such evidence as the Corporation
may deem necessary to establish the validity of the transfer and the acceptance
by the transferee of the terms and conditions of the Option.
COMPLIANCE WITH SECURITIES, TAX AND OTHER LAWS
The Option may not be exercised if the issuance of shares upon such
exercise would constitute a violation of any applicable Federal or state
securities law or any other law or valid regulation. As a condition to
exercise of the Option, the Corporation may require the Optionee, or any person
acquiring the right to exercise the Option, to make any representation or
warranty that the Corporation deems to be necessary under any applicable
securities, tax, or other law or regulation.
ADJUSTMENTS
The Optionee acknowledges the power of the Committee under Section 6.1
of the Plan to adjust the number of shares which may be purchased pursuant to
the Option and the exercise price of the Option upon the occurrence of certain
events to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available by the grant of the Option.
NO RIGHT TO REMAIN IN OFFICE
The granting of the Option does not confer upon the Optionee any right
to be retained as an Employee.
AMENDMENT AND TERMINATION OF OPTION
Except as otherwise provided in this Agreement, the Corporation may
not, without the consent of the Optionee, alter or impair any Option granted
under the Plan. The Option shall be considered terminated in whole or in part,
to the extent that, in accordance with the provisions of the Plan, it can no
longer be exercised for shares originally subject to the Option.
4
Page 16 FORM 10-Q
NOTICES
Every notice relating to this Agreement shall be in writing and if
given by mail shall be given by registered or certified mail with return
receipt requested. All notices to the Corporation or the Committee shall be
sent or delivered to the President of the Corporation at the Corporation's
headquarters. All notices by the Corporation to the Optionee shall be
delivered to the Optionee personally or addressed to the Optionee at the
Optionee's last residence address as then contained in the records of the
Corporation or such other address as the Optionee may designate. Either party
by notice to the other may designate a different address to which notices shall
be addressed. Any notice given by the Corporation to the Optionee at the
Optionee's last designated address shall be effective to bind any other person
who shall acquire rights hereunder.
IN WITNESS WHEREOF, the Corporation, by its duly authorized officer,
and the Optionee have executed this Agreement effective as of the date and year
first above written.
DAEDALUS ENTERPRISES, INC.
By:
--------------------------------
Its: President
----------------------
OPTIONEE: <OPTIONEE>
----------------------
--------------------------------
(signature)