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Exhibit 4.2
EMPLOYEE STOCK OPTION
AGREEMENT
Under The 2007 Equity
Incentive Plan
Of Forest Laboratories, Inc.
In consideration of
services to be rendered by you (the "Optionee") to Forest
Laboratories, Inc., a Delaware corporation (the "Company"), you
have been granted an option (the "Option") under the
Company’s 2007 Equity Incentive Plan (the "2007 Plan"), which
is incorporated herein by reference, to purchase from the Company a
number of shares of Common Stock of the Company (the "Shares") at
the price per Share as listed on the Optionee’s option grant
information page (the "Information Page") on the website of the
Stock Plan Administrator (as defined in Section 13) subject to the
terms and conditions of this Agreement and the 2007
Plan.
1. OPTION
TERMS. The date of grant, the maximum number of Shares the
Option entitles the Optionee to purchase, the number of Shares
which are subject to that portion of the Option that is intended to
qualify as an Incentive Stock Option ("ISO") and the number of
Shares which are subject to that portion of the Option that is
designated as a non-incentive stock option ("non-ISO"), the option
exercise price per Share, and the date or dates on which the Option
will vest ( i.e. , will become first exercisable) are
identified on the Information Page.
2. TERM OF OPTION
AND EXERCISABILITY. Subject to the provisions of Paragraphs 5,
6, 7 and 8 hereof, the Option shall expire on the date specified on
the Information Page and shall become first exercisable as to the
Shares covered by the Option in one or more installments on the
date(s) listed on the Information Page. Notwithstanding the
foregoing, the Option may not be exercised as to less than 100
Shares at any time (or the remaining Shares covered by the Option,
if less than 100 Shares); and the Option may not be exercised until
fulfillment of all applicable conditions precedent referred to in
Paragraph 9 hereof. The exercise price of the Option shall be paid
in full in cash at the time of exercise or as set forth in clause
(c) or (d) of Paragraph 3 hereof. Except as provided in Paragraphs
5, 6, 7 and 8 hereof, the Option may not be exercised unless the
Optionee shall have been in the continuous employ of the Company or
of one or more of its subsidiaries from the date of the Option
grant to the date of the exercise of the Option.
3. METHOD OF
EXERCISING OPTION. The Option may be exercised by the Optionee
(or his or her permitted transferee as set forth in Paragraph 10
hereof) by calling the Stock Plan Administrator or by accessing the
Stock Plan Administrator’s online benefit website. The Option
exercise shall specify the number of Shares as to which the Option
is being exercised. Payment of the exercise price for all of the
Shares as to which the Option is being exercised may be made: (a)
by wire transfer, check or money order payable to the order of the
Stock Plan Administrator, (b) if permitted under the
Company’s policies then in effect, by authorizing the Stock
Plan Administrator to sell on behalf of the Optionee some or all of
the Shares to be acquired upon the exercise of the Option and to
remit to the Company a sufficient portion of the sale proceeds to
pay the exercise price for all of the Shares as to which the Option
is being exercised, any withholding or employment taxes and all
applicable fees, including brokerage fees , resulting from
such exercise and sale, (c) (subject to the following sentence) by
delivering Shares having a fair market value (as determined by the
"Committee," as defined in Paragraph 13 hereof) as of the day
preceding the exercise date equal to the exercise price for all of
the Shares as to which the Option is being exercised, either by
delivering physical certificates duly endorsed in blank for
transfer to the Company or by submitting certificates by
attestation, or (d) by a combination of (i) cash and (ii)
Shares as described in clause (c) above. Notwithstanding anything
to the contrary contained herein, Shares used in payment of the
exercise price of the Option must (1) have been acquired by the
Optionee for cash in the open market at least six months prior to
the Option exercise date, or (2) if acquired pursuant to a Stock
Grant granted under any equity incentive plan of the Company
including the 2007 Plan, must be owned by the Optionee and all
conditions applicable to such Shares pursuant to the Stock Grant
must have been satisfied at least six months prior to the Option
exercise date, or (3) if acquired from the Company by settlement of
a Restricted Stock Unit, or by exercise of an option, Stock
Appreciation Right, or other similar award, must have been owned by
the Optionee for a period of at least six months prior to the
Option exercise date.
Promptly following
the Option exercise, the Stock Plan Administrator will instruct the
Company’s transfer agent and stock registrar to deliver for
the account of the Optionee (or his or her permitted transferee)
the number of Shares with respect to which the Option was
exercised, less the number of Shares sold for purposes of payment
pursuant to clause (b) above and less the number of Shares
delivered to the Company by attestation pursuant to clause (c) or
(d) above. The Optionee shall not have any of the rights of a
stockholder with respect to the Shares issuable upon exercise of
the Option until the Shares shall have been issued. In the event
the Option shall be exercised (if permitted hereunder) by a person
other than the Optionee, such permitted transferee shall provide
appropriate proof of his or her right to exercise the Option to the
Stock Plan Administrator in accordance with its policies and
procedures. Shares issued upon the exercise of the Option as
provided herein shall be fully paid and non-assessable.
4.
EMPLOYMENT. In consideration of the granting of the Option and
regardless of whether the Option shall be exercised, the Optionee
will fulfill all the duties and obligations of his or her
employment by the Company or its subsidiary. Nothing in this
Agreement shall confer upon the Optionee any right to similar
option grants in future years or any right to be continued in the
employ of the Company or its subsidiaries or shall interfere in any
way with the right of the Company or any such subsidiary to
terminate or otherwise modify the terms of the Optionee's
employment.
5. TERMINATION OF
EMPLOYMENT. Except as otherwise provided in Paragraph 6, 7 or 8
hereof or in any employment agreement between the Company and the
Optionee, in the event that the employment of the Optionee by the
Company or its subsidiary terminates, the Option shall be
exercisable (to the extent that the Option was vested and therefore
exercisable at the time of the Optionee’s termination of
employment) for ninety days following such termination of
employment, but no later than the expiration date specified on the
Information Page; provided, however, if the Option is a non-ISO and
if the Optionee continues to provide services to the Company as a
consultant or non-employee director following the termination of
his or her employment by the Company or its subsidiary, then the
Optionee shall not be deemed to have terminated his or her
employment for purposes of this sentence during the period of such
consultancy or while so serving as a non-employee director.
Notwithstanding anything to the contrary in this Agreement or the
2007 Plan, if the Optionee’s employment is terminated by the
Company or any of its subsidiaries for gross misconduct, including
without limitation, violations of applicable Company policies or
legal or ethical standards, all rights under the Option (including
vested rights) shall terminate on the employment termination date.
This Agreement may be terminated by the Company, and upon any such
termination the Option underlying this Agreement, to the extent
then unexercised shall be null and void as of the date of such
termination, upo
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