Exhibit 10.3
NONQUALIFIED STOCK OPTION AGREEMENT
WINLAND ELECTRONICS, INC.
2008 EQUITY INCENTIVE PLAN
THIS AGREEMENT, made
effective as of this ______ day of ___________, 20__, by and
between Winland Electronics, Inc., a Minnesota corporation
(the “Company”), and _________________
(“Participant”).
W
I T N E S S E T H:
WHEREAS, Participant on the
date hereof is a key employee, officer, director of or
consultant or advisor to the Company or one of its
Subsidiaries; and
WHEREAS, the Company wishes
to grant a nonqualified stock option to Participant to
purchase shares of the Company’s Common Stock pursuant
to the Company’s 2008 Equity Incentive Plan (the
“Plan”); and
WHEREAS, the Administrator
has authorized the grant of a nonqualified stock option to
Participant and has determined that, as of the effective date
of this Agreement, the fair market value of the
Company’s Common Stock is $
per share;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as
follows:
1.
Grant
of Option . The Company hereby grants to
Participant on the date set forth above (the “Date of
Grant”), the right and option (the
“Option”) to purchase all or portions of an
aggregate of ___________________________ (__________) shares
of Common Stock at a per share price of $___________ on the
terms and conditions set forth herein, and subject to
adjustment pursuant to Section 15 of the
Plan. This Option is a nonqualified stock option
and will not be treated as an incentive stock option, as
defined under Section 422, or any successor provision, of the
Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations
thereunder.
2.
Duration
and Exercisability .
a.
General
. The term during which this Option may be
exercised shall terminate on _______________, ______,
except as
otherwise provided in Paragraphs 2(b) through 2(d)
below. This Option shall become exercisable
according to the following schedule:
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Vesting Date
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Number of Shares
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Once
the Option becomes fully exercisable, Participant may continue
to exercise this Option under the terms and conditions of this
Agreement until the termination of the Option as provided
herein. If Participant does not purchase upon an
exercise of this Option the full number of shares which
Participant is then entitled to purchase, Participant may
purchase upon any subsequent exercise prior to this
Option’s termination such previously unpurchased shares
in addition to those Participant is otherwise entitled to
purchase.
b.
Termination
of Relationship (other than Disability or Death)
. If Participant ceases to be [an employee] [a
consultant] [a director] of the Company or any
Subsidiary for any reason other than disability or death,
this Option shall completely terminate on the earlier of (i)
the close of business on the three-month anniversary of the
date of termination of Participant’s relationship, and
(ii) the expiration date of this Option stated in
Paragraph 2(a) above. In such period following
such termination of Participant’s relationship, this
Option shall be exercisable only to the extent the Option was
exercisable on the vesting date immediately preceding the
date on which Participant’s relationship with the
Company or Subsidiary has terminated, but had not previously
been exercised. To the extent this Option was not
exercisable upon the termination of such relationship, or if
Participant does not exercise the Option within the time
specified in this Paragraph 2(b), all rights of Participant
under this Option shall be forfeited.
c.
Disability
. If Participant ceases to be [an employee] [a
consultant] [a director] of the Company or any
Subsidiary because of disability (as defined in Code Section
22(e), or any successor provision), this Option shall
completely terminate on the earlier of (i) the close of
business on the twelve-month anniversary of the date of
termination of Participant’s relationship, and
(ii) the expiration date of this Option stated in
Paragraph 2(a) above. In such period following
such termination of Participant’s relationship, this
Option shall be exercisable only to the extent the Option was
exercisable on the vesting date immediately preceding the
date on which Participant’s relationship with the
Company or Subsidiary has terminated, but had not previously
been exercised. To the extent this Option was not
exercisable upon the termination of such relationship, or if
Participant does not exercise the Option within the time
specified in this Paragraph 2(c), all rights of Participant
under this Option shall be forfeited.
d.
Death
. In the event of Participant’s death, this
Option shall terminate on the earlier of (i) the close of
business on the twelve-month anniversary of the date of
Participant’s death, and (ii) the expiration date of
this Option stated in Paragraph 2(a) above. In
such period following Participant’s death, this Option
may be exercised by the person or persons to whom
Participant’s rights under this Option shall have
passed by Participant’s will or by the laws of descent
and distribution only to the extent the Option was
exercisable on the vesting date immediately preceding the
date of Participant’s death, but had not previously
been exercised. To the extent this Option was not
exercisable upon the date of Participant’s death, or if
such person or persons fail to exercise this Option within
the time specified in this Paragraph 2(d), all rights under
this Option shall be forfeited.
3.
Manner
of Exercise .
a.
General
. The Option may be exercised only by Participant
(or other proper party in the event of death or incapacity),
subject to the conditions of the Plan and subject to such
other administrative rules as the Administrator may deem
advisable, by delivering within the option period written
notice of exercise to the Company at its principal
office. The notice shall state the number of
shares as to which the Option is being exercised and shall be
accompanied by payment in full of the option price for all
shares designated in the notice. The exercise of
the Option shall be deemed effective upon receipt of such
notice by the Company and upon payment that complies with the
terms of the Plan and this Agreement. The Option
may be exercised with respect to any number or all of the
shares as to which it can then be so exercised and, if
partially exercised, may be so exercised as to the
unexercised shares any number of times during the option
period as provided herein.
b.
Form
of Payment . Payment of the option price by
Participant shall be in the form of cash, personal check,
certified check or, if not prohibited by the Administrator,
previously acquired shares of Comm
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