Exhibit 10.12
FORM OF
STOCK OPTION AGREEMENT
This Stock Option Agreement, is entered into as of the ____ day of
_________________, 200__, between SUN HYDRAULICS CORPORATION, a Florida
corporation (the "Corporation"), and ____________________________ (the
"Participant").
W I T N E S S E T H
WHEREAS, the Participant is an officer and/or key employee of Sun
Hydraulics Corporation; and
WHEREAS, effective September 30, 1996, the Corporation adopted the Sun
Hydraulics Corporation 1996 Stock Option Plan, as amended effective as of
February 24, 1997 (the "Plan") in order to provide officers and key employees of
the Corporation and its affiliated companies with an opportunity to acquire an
equity interest in the Corporation; and
WHEREAS, the Corporation has determined that it is in the best interests
of the Corporation to grant Participant the option to purchase shares of common
stock of the Corporation under the Plan.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Grant of Options. Subject to the terms and conditions of this
Agreement, the Corporation hereby grants to the Participant the right and option
to purchase up to a total of ___________________________ (_______) shares of the
common stock, $0.001 par value, of the Corporation (the "Common Stock"), at a
purchase price of $___________ per share.
2. Period of Exercise. The Options shall become vested and exercisable
in three (3) installments. At any time during the term of the Options, the
maximum number of shares of Common Stock the Participant may purchase by
exercising the Options shall be limited as specified in the following schedule:
MAXIMUM NUMBER OF SHARES
PERIOD WHICH CAN BE PURCHASED
After [date] Up to ________ shares
From [date] to [date] Up to ________ shares (less any shares previously
purchased through Option exercises)
After [date] Up to ________ shares (less any shares previously
purchased through Option exercises)
3. Termination Date of Options. The Options granted hereunder shall
terminate on __________________, 20___. The Participant shall have no right to
exercise the Options at any time after this date.
4. Manner of Exercise. When the Participant elects to exercise the
Options to purchase shares of Common Stock, he shall give written notice of such
exercise to the Secretary of the Corporation. The notice of exercise shall state
the number of shares of Common Stock as to which the Options are being
exercised.
The Participant may exercise the Options to purchase all, or any
lesser whole number, of the number of shares of Common Stock which he is then
permitted to purchase under Paragraph 2.
5. Payment for Shares. Full payment of the option price for the shares
of Common Stock purchased by exercising the Options shall be due at the time the
notice of exercise is delivered pursuant to Paragraph 4. Such payment may be
made (i) in cash, (ii) by delivery of shares of Common Stock already owned by
the Participant for at least six months, with a fair market value equal to the
option price, (iii) with the approval of the Compensation Committee (the
"Committee") of the Board of Directors of the Corporation, in cash at the time
of exercise to the extent of the par value of such shares of Common Stock with
the balance of the Purchase Price paid pursuant to a promissory note on terms
satisfactory to the Committee delivered at the time of exercise, or (iv) in any
other form acceptable to the Committee.
Alternatively, the Participant may exercise his Options by
delivering a signed, irrevocable notice of exercise, accompanied by payment in
full of the option price by the Participant's stockbroker and an irrevocable
instruction to the Corporation to deliver the shares of Common Stock issuable
upon exercise of the Options promptly to the Participant's stockbroker for the
Participant's account.
6. Issuance of Stock Certificates for Shares. The stock certificates
for any shares of Common Stock issuable to the Participant upon exercise of the
Options shall be delivered to the Participant (or to the person to whom the
rights of the Participant shall have passed by will or the laws of descent and
distribution) as promptly after the date of exercise as is feasible, but not
before the Participant has paid the option price for such shares. The
Corporation shall place such legends on the stock certificates, and such other
notations on its stock transfer records, as may be necessary to identify such
shares as shares issued pursuant to the exercise of incentive stock options.
7. Termination. If the Participant's employment with the Corporation
terminates during the term of the Options, the Participant shall have the right
to exercise the Options during a period of ninety (90) days following the
termination of employment, but in no event later than __________________,
20____. The maximum number of shares the Participant may purchase by exercising
the Options during this ninety day period shall not exceed the number of shares
which could be purchased by the Participant immediately prior to the date of
termination pursuant to Paragraph 2.
8. Effect of Death or Disability. If the Participant dies before the
Options expire or have been exercised with respect to all of the shares of
Common Stock subject to the Options,
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the Participant's executor, administrator, or any person to whom the Options may
be transferred by his will or by the laws of descent, shall have the right to
exercise the Options, to the extent not previously exercised, at any time prior
to the first anniversary of the date of death, but in no event later than
__________________, 20____. For this purpose, the terms of this Agreement shall
be deemed to apply to such person as if he or she were the Participant.
In the event of the disability of Participant while employed by the
Corporation, the Options may be exercised, to the extent not previously
exercised, by Participant at any time prior to the first anniversary of the date
of disability, but in no event later than __________________, 20____. The
determination as to whether Participant's employment is terminated due to
"disability" shall be vested solely in the Committee and its determination shall
be final and conclusive on all parties.
9. Adjustments in the Shares. Notwithstanding anything contained herein
to the contrary, in the event of any changes in the Common Stock of the
Corporation prior to the purchase thereof by Participant by reason of a share
dividend, split-up, reclassification, recapitalization, subdivision,
combination, exchange of shares, merger, consolidation or liquidation by or of
the Corporation, the aggregate number and class of shares available under this
Agreement to be purchased by Participant and the purchase price therefor shall
be correspondingly adjusted by the Committee; provided, however, that no such
adjustment shall be made as a result of any public offering of shares of the
Corporation's Common Stock.
10. Non-Transferability of Options. The Participant's rights under the
Options may not be assigned or transferred by the Participant other than by will
or the laws of descent and distribution.
11. Securities Laws. The Corporation may from time to time impose any
conditions on the exercise of the Options as it deems necessary or advisable to
ensure that the Options granted hereunder, and each exercise thereof, satisfy
the requirements of applicable securities and other laws. Such conditions to
satisfy applicable securities and other laws may include, without limitation,
the partial or complete suspension of the right to exercise the Options until
the offering of the shares covered by the Options have been registered under the
Securities Act of 1933, or the printing of legends on all stock certificates
issued to the Participant referring to the restrictions on the transferability
of such shares.
12. Rights Prior to Issuance of Certificates. Neither the Participant
nor any person to whom the rights of the Participant shall have passed by will
or the laws of descent and distribution shall have any of the rights of a
stockholder with respect to any shares of Common Stock until the date of the
issuance to him of certificates for such Common Stock as provided in Paragraph 6
above.
13. Agreement Subject to Option Plan. This Agreement and the rights and
obligations of the parties hereto are subject to and governed by the terms of
the Plan as the same may be amended from time to time, the provisions of which
are incorporated by reference into this Agreement.
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14. Withholding. The Company's obligation to deliver all or any of the
Shares upon the exercise of the Option shall be subject to the applicable tax
withholding requirements of the United States and any political subdivision
thereof. Withholding tax due upon the exercise of any Option may be paid using
the Shares upon such terms and conditions as the Board shall determine;
provided, however, that the Board in its sole discretion may disapprove such
form of payment and require that such taxes be paid in cash.
15. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts all
of which taken together will constitute one and the same instrument.
(b) The terms of this Agreement may only be amended, modified or
waived by a written agreement executed by both the Participant and the
Corporation.
(c) The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the State of Florida, without giving
effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the
date and year first above written.
ATTEST: SUN HYDRAULICS CORPORATION
_____________________________________ By: _______________________________
Secretary President
"PARTICIPANT"
___________________________________
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FORM OF
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement, is entered into as of the ____ day
of _________________, 200__, between SUN HYDRAULICS CORPORATION, a Florida
corporation (the "Corporation"), and ____________________________ (the
"Participant").
W I T N E S S E T H
WHEREAS, the Participant is an officer and/or key employee of Sun
Hydraulics Corporation; and
WHEREAS, effective September 30, 1996, the Corporation adopted the Sun
Hydraulics Corporation 1996 Stock Option Plan, as amended effective as of
February 24, 1997 (the "Plan") in order to provide officers and key employees of
the Corporation and its affiliated companies with an opportunity to acquire an
equity interest in the Corporation; and
WHEREAS, the Corporation has determined that it is in the best interests
of the Corporation to grant Participant the option to purchase shares of common
stock of the Corporation under the Plan.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Grant of Options. Subject to the terms and conditions of this
Agreement, the Corporation hereby grants to the Participant the right and option
to purchase up to a total of ___________________________ (_______) shares of the
common stock, $0.001 par value, of the Corporation (the "Common Stock"), at a
purchase price of $___________ per share.
The options to purchase up to _____________ shares of Common Stock
granted under this Agreement (the "Options") are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
2. Period of Exercise. The Options shall become vested and exercisable
in three (3) installments. At any time during the term of the Options, the
maximum number of shares of Common Stock the Participant may purchase by
exercising the Options shall be limited as specified in the following schedule:
MAXIMUM NUMBER OF SHARES
PERIOD WHICH CAN BE PURCHASED
After [date] Up to ________ shares
From [date] to [date] Up to ________ shares (less any shares previously purchased
through Option exercises)
After [date] Up to ________ shares (less any shares previously purchased
through Option exercises)
3. Termination Date of Options. The Options granted hereunder shall
terminate on __________________, 20___. The Participant shall have no right to
exercise the Options at any time after this date.
4. Manner of Exercise. When the Participant elects to exercise the
Options to purchase shares of Common Stock, he shall give written notice of such
exercise to the Secretary of the Corporation. The notice of exercise shall state
the number of shares of Common Stock as to which the Options are being
exercised.
The Participant may exercise the Options to purchase all, or any
lesser whole number, of the number of shares of Common Stock which he is then
permitted to purchase under Paragraph 2.
5. Payment for Shares. Full payment of the option price for the shares
of Common Stock purchased by exercising the Options shall be due at the time the
notice of exercise is delivered pursuant to Paragraph 4. Such payment may be
made (i) in cash, (ii) by delivery of shares of Common Stock already owned by
the Participant for at least six months, with a fair market value equal to the
option price, (iii) with the approval of the Compensation Committee (the
"Committee") of the Board of Directors of the Corporation, in cash at the time
of exercise to the extent of the par value of such shares of Common Stock with
the balance of the Purchase Price paid pursuant to a promissory note on terms
satisfactory to the Committee delivered at the time of exercise, or (iv) in any
other form acceptable to the Committee.
Alternatively, the Participant may exercise his Options by
delivering a signed, irrevocable notice of exercise, accompanied by payment in
full of the option price by the Participant's stockbroker and an irrevocable
instruction to the Corporation to deliver the shares of Common Stock issuable
upon exercise of the Options promptly to the Participant's stockbroker for the
Participant's account.
6. Issuance of Stock Certificates for Shares. The stock certificates
for any shares of Common Stock issuable to the Participant upon exercise of the
Options shall be delivered to the Participant (or to the person to whom the
rights of the Participant shall have passed by will or the laws of descent and
distribution) as promptly after the date of exercise as is feasible, but not
before the Participant has paid the option price for such shares. The
Corporation shall place such legends on the stock certificates, and such other
notations on its stock transfer records, as may be necessary to identify such
shares as shares issued pursuant to the exercise of incentive stock options.
7. Termination. If the Participant's employment with the Corporation
terminates during the term of the Options, the Participant shall have the right
to exercise the Options during a period of ninety (90) days following the
termination of employment, but in no event later than __________________,
20____. The maximum number of shares the Participant may purchase by exercising
the Options during this ninety day period shall not exceed the number of shares
which could be purchased by the Participant immediately prior to the date of
termination pursuant to Paragraph 2.
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8. Effect of Death or Disability. If the Participant dies before the
Options expire or have been exercised with respect to all of the shares of
Common Stock subject to the Options, the Participant's executor, administrator,
or any person to whom the Options may be transferred by his will or by the laws
of descent, shall have the right to exercise the Options, to the extent not
previously exercised, at any time prior to the first anniversary of the date of
death, but in no event later than __________________, 20____. For this purpose,
the terms of this Agreement shall be deemed to apply to such person as if he or
she were the Participant.
In the event of the disability of Participant while employed by the
Corporation, the Options may be exercised, to the extent not previously
exercised, by Participant at any time prior to the first anniversary of the date
of disability, but in no event later than __________________, 20____. The
determination as to whether Participant's employment is terminated due to
"disability" shall be vested solely in the Committee and its determination shall
be final and conclusive on all parties.
9. Adjustments in the Shares. Notwithstanding anything contained herein
to the contrary, in the event of any changes in the Common Stock of the
Corporation prior to the purchase thereof by Participant by reason of a share
dividend, split-up, reclassification, recapitalization, subdivision,
combination, exchange of shares, merger, consolidation or liquidation by or of
the Corporation, the aggregate number and class of shares available under this
Agreement to be purchased by Participant and the purchase price therefor shall
be correspondingly adjusted by the Committee; provided, however, that no such
adjustment shall be made as a result of any public offering of shares of the
Corporation's Common Stock.
10. Non-Transferability of Options. The Participant's rights under the
Options may not be assigned or transferred by the Participant other than by will
or the laws of descent and distribution.
11. Securities Laws. The Corporation may from time to time impose any
conditions on the exercise of the Options as it deems necessary or advisable to
ensure that the Options granted hereunder, and each exercise thereof, satisfy
the applicable requirements of federal and state securities laws. Such
conditions to satisfy applicable federal and state securities laws may include,
without limitation, the partial or complete suspension of the right to exercise
the Options until the offering of the shares covered by the Options have been
registered under the Securities Act of 1933, or the printing of legends on all
stock certificates issued to the Participant referring to the restrictions on
the transferability of such shares.
12. Rights Prior to Issuance of Certificates. Neither the Participant
nor any person to whom the rights of the Participant shall have passed by will
or the laws of descent and distribution shall have any of the rights of a
stockholder with respect to any shares of Common Stock until the date of the
issuance to him of certificates for such Common Stock as provided in Paragraph 6
above.
13. Agreement Subject to Option Plan. This Agreement and the rights and
obligations of the parties hereto are subject to and governed by the terms of
the Plan as the same
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may be amended from time to time, the provisions of which are incorporated by
reference into this Agreement.
14. Withholding. The Company's obligation to deliver all or any of the
Shares upon the exercise of the Option shall be subject to the applicable tax
withholding requirements of the United States and any political subdivision
thereof. Withholding tax due upon the exercise of any Option may be paid using
the Shares upon such terms and conditions as the Board shall determine;
provided, however, that the Board in its sole discretion may disapprove such
form of payment and require that such taxes be paid in cash.
15. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts all
of which taken together will constitute one and the same instrument.
(b) The terms of this Agreement may only be amended, modified or
waived by a written agreement executed by both the Participant and the
Corporation.
(c) To the extent that any of the provisions of this Agreement are
inconsistent with the provisions of Section 422 of the Internal Revenue Code and
such inconsistency would cause any Options granted hereunder not to be treated
as incentive stock options for federal income tax purposes, the provisions of
this Agreement and of the Options granted hereunder shall be deemed to be
amended in a manner to comply with the provisions of Section 422 of the Internal
Revenue Code, as the case may be.
(d) The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the State of Florida, without giving
effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the
date and year first above written.
ATTEST: SUN HYDRAULICS CORPORATION
______________________________________ By:_________________________________
Secretary President
"PARTICIPANT"
____________________________________
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