EXHIBIT 10.2
INCENTIVE STOCK OPTION AGREEMENT
This AGREEMENT is entered into
and effective as of the
day of
, ___, by and between Health Fitness Corporation (the
“Company”) and
(the “Optionee”).
RECITALS
A. The Optionee is an employee
of the Company or a subsidiary of the Company.
B. The Company has adopted the
2005 Stock Option Plan (the “Plan”), authorizing the
Board of Directors of the Company, or a committee as provided for
in the Plan (the Board or such a committee to be referred to as the
“Committee”), to grant incentive stock options to
eligible employees of the Company, which options will qualify as
“incentive stock options” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations issued thereunder.
C. The Company desires to give
the Optionee an inducement to acquire a proprietary interest in the
Company and an added incentive to advance the interests of the
Company by granting to the Optionee an option to purchase shares of
common stock of the Company.
AGREEMENTS
Accordingly, the parties hereto agree
as follows:
ARTICLE I. GRANT OF OPTION
The Company hereby grants to the
Optionee the right, privilege, and option (the
“Option”) to purchase up to
(
) shares (subject to adjustment as provided in Article IX
hereof), (the “Option Shares”) of the Company’s
common stock, $.01 par value (the “Common Stock”),
according to the terms and subject to the conditions hereinafter
set forth and as set forth in the Plan. The Option is intended to
be an “incentive stock option,” as that term is used in
Section 422 of the Code and the regulations issued thereunder,
to the extent permitted by Section 422(d) of the Code.
ARTICLE II. OPTION EXERCISE PRICE
The per share price to be paid by the
Optionee in the event of an exercise of the Option shall be $
, which has been determined to be not less than the fair market
value of the Company’s Common Stock at the date of grant of
this Option.
ARTICLE III. DURATION OF OPTION AND
EXERCISABILITY
A. Initial Period of
Exercisability . The Option shall be fully exercisable in
(___) installments. The following table sets forth the initial
dates of exercisability of each of each installment and the number
of Option Shares as to which this Option shall become exercisable
on such dates, provided that Optionee has continually served as an
employee of the Company. In no
event
shall this Option be exercisable after, and this Option shall
become void and expire as to all unexercised Option Shares at, 5:00
p.m. (Central time) on
,
(the “Expiration Date”).
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B. Termination of Employment
Due to Death, Disability or Retirement . In the event the
Optionee’s employment is terminated with the Company and all
of its Subsidiaries (within the meaning of Section 424(f) of the
Code) by reason of death, an event that constitutes permanent and
total disability within the meaning of Section 22(e)(3) of the
Code (“Disability”), or retirement pursuant to and in
accordance with the regular retirement plan or practice of the
Company or the Subsidiary employing the Optionee
(“Retirement”), then this Option shall immediately
become exercisable with respect to one hundred percent (100%) of
the Option Shares. Any unexercised portion of this Option may be
exercised, in whole or in part, by the Optionee (or by the
Optionee’s heirs or legal representative(s) in the event of
death or Disability) before the earlier of (a) the expiration
of three months, in the case of Retirement, and one year, in the
case of death or Disability, after such date of termination, and
(b) the Expiration Date. If the unexercised portion of this
Option is not exercised within the time specified in this
Section III.B., all rights of the Optionee hereunder shall
terminate, and the Option shall thereafter be void.
C. Termination of Employment
for Reasons Other Than Death, Disability or Retirement . Except
as provided in Section III.D. below, in the event the
Optionee’s employment with the Company or any of its
Subsidiaries is terminated for any reason other than death,
Disability or Retirement, any unexercised portion of this Option
which was exercisable as of the date of such termination may be
exercised, in whole or in part, by the Optionee before the earlier
of (a) the expiration of three months after the date of
termination of employment, and (b) the Expiration Date. If the
unexercised portion of this Option is not exercised within the time
specified in this Section III.C., all rights of the Optionee
hereunder shall terminate, and the Option shall thereafter be
void.
D. Change in
Control.
(i) For purposes of this
Section III.D., the term “Change in Control” shall
have the meaning set forth in Section 11 of the Plan.
(ii) If any events constituting a
Change in Control of the Company shall occur, the Optionee shall be
entitled to receive option rights covering shares of the surviving
or acquiring entity in the same proportion, at an equivalent price,
and subject to the same conditions as this Option; provided,
however, that the Committee may, at its sole discretion, provide
for the acceleration of the right to exercise this Option prior to
the anticipated effective date of the Change of Control or take any
other action as it may deem appropriate to further the purposes of
the Plan or protect the interests of the Optionee; provided,
however, that if, with respect to the Optionee, acceleration of the
vesting of this Option as provided herein (which acceleration could
be deemed a payment within the meaning of Section 280G(b)(2)
of the Code) together with any other payments which the Optionee
has the right to receive from the Company or any corporation which
is a member of an “affiliated group” (as defined in
Section 1504(a) of the Code without regard to Section
2
1504(b) of the
Code) of which the Company is a member, would constitute a
“parachute payment” (as defined in
Section 280G(b)(2) of the Code), the payments to the Optionee
as set forth herein shall be reduced to the largest amount as will
result in no portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code.
ARTICLE IV. MANNER OF OPTION EXERCISE
A. Notice . This Option
may be exercised by the Optionee in whole or in part from time to
time, subject to the conditions contained in the Plan and herein,
by delivery, in person or by registered mail, to the Company at its
principal executive office (Attention: Secretary), of a written
notice of exercise. Such notice shall be in a form satisfactory to
the Committee, shall identify the Option, shall specify the number
of Option Shares with respect to which the Option is being
exercised, and shall be signed by the person or persons so
exercising the Option. Such notice shall be accompanied by payment
in full of the total purchase price of the Option Shares purchased.
In the event that the Option is being exercised, as provided by the
Plan and Section III.B. above, by the Optionee’s heirs or
legal representative(s), the notice shall be accompanied by
appropriate proof of right of such person or persons to exercise
the Option. As soon as practicable after the effective exercise of
the Option, the Optionee (or the Optionee’s heirs or legal
representative(s) in the event of death or Disability) shall be
recorded on the stock transfer books of the Company as the owner of
the Option Shares purchased, and the Company shall deliver to the
Optionee (or the Optionee’s heirs or legal representative(s))
one or more duly issued stock certificates evidencing such
ownership. All requisite original issue or transfer documentary
stamp taxes shall be paid by the Company.
B. Payment . At the time
of exercise, the Optionee may pay the total purchase price of the
shares to be purchased (i) in cash, (ii) by transfer from
the Optionee to the Company of previously acquired shares of Common
Stock, (iii) through the withholding of shares of Stock from
the number of shares otherwise issuable upon the exercise of the
Option ( e.g ., a net share settlement), or (iv) by a
combination thereof; provided, however, that the Optionee may not
pay any portion of the purchase price through a net share
settlement unless and until the shareholders of the Company have
approved an amendment to the Plan that authorizes such payment
option. In the event the Optionee elects to pay the purchase price
in whole or in part with previously acquired shares of Common Stock
or through a net share settlement, the Fair Market Value of the
shares delivered or withheld shall equal the total exercise price
for the shares being purchased in such manner. The Committee may
reject the Optionee’s election to pay all or part of the
purchase price under this Option with previously acquired shares of
Common Stock and may require such purchase price to be paid
entirely in cash if, in the sole discretion of the Committee,
payment in previously acquired shares would cause the Company to be
required to recognize a charge to earnings in connection therewith.
For purposes of this Agreement, (a) “previously acquired
shares” shall include shares of Common Stock of the Company
that are already owned by the Optio
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