EXHIBIT 4.6
Incentive Stock Option
HERTZ TECHNOLOGY GROUP, INC.
STOCK OPTION AGREEMENT
As of____________, 2000
HERTZ TECHNOLOGY GROUP, INC., a Delaware corporation (the "Company"),
pursuant to the Company's 1996 Stock Option Plan, as amended (the "Plan"),
hereby grants to (the "Optionee") a stock option to purchase a total ________
shares of the Company's Common Stock, par value $.001 per share ("Common
Stock"), at the price per share of $________ on the terms and conditions set
forth herein and in the Plan. This option is intended to constitute and qualify
as an Incentive Stock Option, as defined by Section 422 of The Internal Revenue
Code of 1986, as amended (the "Code"). To the extent this option does not meet
the criteria of an Incentive Stock Option as defined in Section 422 of the Code
it shall constitute a non-qualified stock option subject to Section 83 of the
Code.
1. Duration.
(a) This option was granted on the date first above written.
(b) This option shall expire at the close of business on ________, ____
(the "Termination Date").
2. Written Notice of Exercise.
This option may be exercised only by delivering to the Secretary of the
Company, at its principal office within the time specified in Paragraph 1 or
such shorter time as is otherwise provided for herein, a written notice of
exercise substantially in the form described in Section 10.
3. Anti-Dilution Provisions.
(a) If there is any stock dividend or recapitalization resulting in a
stock split, or combination or exchange of shares of Common Stock of the
Company, the number of shares of Common Stock then subject to this option shall
be proportionately and appropriately adjusted; no change shall be made in the
aggregate purchase price to be paid for all shares subject to this option, but
the aggregate purchase price shall be allocated among all shares subject to this
option after giving effect to the adjustment; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated.
(b) If there is any other change in the Common Stock of the Company,
including recapitalization, reorganization, sale or exchange of assets, exchange
of shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any, shall be
made in the shares then subject to this option as the Company's Board of
Directors the ("Board") or the Compensation Committee of the Board (the
"Committee") may deem equitable. Failure of the Board or the Committee to
provide for an adjustment pursuant to this subparagraph prior to the effective
date of any Company action referred to herein shall be conclusive evidence that
no adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities and/or cash
or other property which the Optionee would have been entitled to receive in such
merger or consolidation by virtue of such sale if the Optionee had been the
holder of record of a number of shares of Common Stock of the Company equal to
the number of shares covered by the unexercised portion of this option;
provided, only that the excess of the aggregate fair market value of the shares
2
subject to the options immediately after such substitution over the purchase
price thereof is not more than the excess of the aggregate fair market value of
the shares subject to such options immediately before such substitution over the
purchase price thereof, or (ii) the Company shall give to the Optionee written
notice of its election not to cause such provision to be made and this option
shall become exercisable in full (or, at the election of the Optionee, in part)
at any time during a period of ten (10) days, to be designated by the Company,
ending not more than ten (10) days prior to the effective date of the merger,
consolidation or sale, in which case this option shall not be exercisable to any
extent after the expiration of such ten (10) day period. In no event, however,
shall this option be exercisable after the Termination Date.
4. Investment Representation and Legend of Certificates.
The Optionee agrees that until such time as a registration statement under
the Securities Act of 1933, as amended, becomes effective with respect to the
option and/or the stock, the Optionee is taking this option and will take the
stock underlying this option, for investment and not for resale or distribution.
The Company shall have the right to place upon the face of any stock certificate
or certificates evidencing shares issuable upon the exercise of this option such
legend as the Board on the Committee may prescribe for the purpose of preventing
disposition of such shares in violation of the Securities Act of 1933, as
amended.
5. Non-Transferability.
This option shall not be transferable by the Optionee other than by will
or by the laws of descent and distribution, and is exercisable during the
lifetime of the Optionee only by the Optionee.
6. Certain Rights Not Conferred by Option.
The Optionee shall not, by virtue of holding this option, be entitled to
any rights of a stockholder in the Company.
7. Expenses.
The Company shall pay all original issue and transfer taxes with respect
to the issuance and transfer of shares of Common Stock of the Company pursuant
hereto and all other fees and expenses necessarily incurred by the Company in
connection therewith.
3
8. Exercise of Options.
(a) The amount of shares pursuant to this option that shall become
exercisable are as follows:
_______shares commencing ____, 1998
_______shares commencing ____, 1999
_______shares commencing ____, 2000
(b) An option shall be exercisable by written notice of such exercise, in
the form prescribed by the Board or the Committee, to the Secretary of the
Company, at its principal office. The notice shall specify the number of shares
for which the option is being exercised (which number, if less than all of the
shares then subject to exercise, shall be 100 or a multiple thereof) and shall
be accompanied by payment (i) in cash or by check of the amount of the full
purchase price of such shares or (ii) in such other manner as the Board or the
Committee shall deem acceptable.
(c) No shares shall be delivered upon exercise of any option until all
laws, rules and regulations which the Board or the Committee may deem applicable
have been complied with. If a registration statement under the Securities Act of
1933, as amended, is not then in effect with respect to the shares issuable upon
such exercise, the Company may require as a condition precedent that the person
exercising the option give to the Company a written representation and
undertaking, satisfactory in form and substance to the Board or the Committee,
that such person is acquiring the shares for their own account for investment
and not with a view to the distribution thereof.
(d) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which such
person is actually recorded as the holder of such stock in the records of the
Company.
(e) This option shall be exercisable only so long as the Optionee shall
continue to be an employee of the Company and within the three month period
after the date of termination of his employment to the extent it was exercisable
on the day prior to the date of termination.
4
Notwithstanding the foregoing, in no event shall this Option be exercisable
after the Termination Date.
(f) Notwithstanding the provisions of Section 8(e) above, in the event the
Optionee is unable to continue his employment with the Company as a result of
his total and permanent disability (as defined in Section 105(d)(4) of the
Internal Revenue Code of 1986, as amended), he may, but only within twelve (12)
months from the date of disability, exercise this option to the extent he was
entitled to exercise it at the date of such disability. Notwithstanding the
foregoing, in no event shall this option be exercisable after the Termination
Date.
(g) Notwithstanding the provisions of Section 8(e) above, in the event of
death of the Optionee:
(i) during the term of this option who is at the time of his death
an employee of the Company and who shall have been in Continuous Status (as
defined in the Plan) as an employee since the date of grant of this option, this
option may be exercised, at any time within twelve (12) months following the
date of death, by the Optionee's estate or by a person who acquired the right to
exercise this option by bequest or inheritance, but only to the extent of the
right that would have accrued had the Optionee continued living one (1) month
after the date of death; or
(ii) within three (3) months after the termination of Continuous
Status as an employee, this option may be exercised, at any time within three
(3) months following the date of death, by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination.
Notwithstanding the provisions of this Section (g), in no event shall this
option be exercisable after the Termination Date.
5
9. Continued Employment.
Nothing herein shall be deemed to create any employment agreement or
guaranty of continued employment or limit in any way the Company's right to
terminate Optionee's employment at any time.
Hertz Technology Group, INC.
By: ______________________________
Eli E. Hertz, President
Accepted as of the date
first set forth above.
______________________________
6