Exhibit 10.23

 

X-RITE, INCORPORATED

EMPLOYEE STOCK OPTION PLAN

OFFICER STOCK OPTION AGREEMENT

 

This Employee Stock Option Agreement (“Agreement”) is made as of
                                 (the “Grant Date”), between X-RITE,
INCORPORATED, a Michigan corporation (the “Company”), and
                                 (the “Optionee”).

 

1. Recital. The Company has adopted its X-Rite, Incorporated Amended and
Restated Employee Stock Option Plan (the “Plan”), providing for the granting of
certain awards, including Qualified Stock Options and Nonqualified Stock
Options, to its employees. All defined terms used in this Agreement shall have
the same meaning as those terms defined in the Plan, unless otherwise defined.

 

2. Grant of Option. Pursuant to the Plan, the Company hereby grants to the
Optionee the option (the “Option”) to purchase from the Company a total of
                     shares of Stock, at the exercise price of $             per
share, the Market Value of a share of Stock on the day preceding the Grant Date.
The shares covered by this Option shall be and hereby are designated as
incentive stock options (“ISOs”) qualifying under the provisions of Section 422
of the Internal Revenue Code of 1986, as amended.

 

3. Term of Option. The Option may be exercised no sooner than one (1) year after
the Grant Date and no later than ten (10) years after the Grant Date, subject to
earlier termination as provided in Paragraph 4 of this Agreement.

 

4. Termination of the Option.

 

(a) Termination of Employment for Reasons Other Than Without Cause, Disability,
Retirement, or Death. In the event the Optionee ceases to be employed by the
Company for any reason other than termination without cause, disability,
retirement with the Company’s consent at age sixty (60) or greater, or death,
the expiration date specified in Section 3 above may be accelerated, in the
discretion of the Committee, to any earlier date, up to and including the date
of termination of employment, by action of the Committee taken not later than
thirty (30) days after the date of termination of employment; provided, however,
that no Option “permanently vested” in accordance with the following schedule
may be adversely affected:

 

Time

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Amount of Option

Permanently Vested

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1st Anniversary of Grant Date

   25 %

2nd Anniversary of Grant Date

   25 %

3rd Anniversary of Grant Date

   25 %

4th Anniversary of Grant Date

   25 %

 

unless the Optionee is terminated “for cause,” in which case the Option shall be
forfeited in its entirety regardless of whether the Option is partially or
wholly “permanently vested.” For purposes of this Agreement, “for cause” shall
mean (i) engaging in conduct involving dishonesty or fraud or conviction of a
crime involving moral turpitude; (ii) intentionally engaging in conduct which is
materially injurious to the Company, monetarily or otherwise; (iii) failure to
perform assigned duties (other than a failure resulting from an illness or other
similar incapacity or disability), or to comply with the policies applicable to
all Company employees after demand for performance or compliance is made to the
Optionee.

 

(b) Termination of Employment Without Cause or Due to Disability or Retirement.
In the event the Optionee is terminated by the Company without cause, or the
Optionee ceases to be employed by the Company by reason of disability or
retirement with the Company’s consent at age sixty (60) or greater, the Option
shall be exercisable for a period of two (2) years following the Optionee’s
termination of employment for any such reason, subject to prior expiration of
the term of the Option and any other limitations imposed by the Plan. If the
Optionee dies after such termination of employment, the Options shall be
exercisable in accordance with Paragraph 4(c) hereof. “Disability” means a
physical or mental infirmity which impairs the Optionee’s ability to
substantially perform Optionee’s duties of the Optionee’s regular occupation
with the Company, which continues for a period of at least one hundred and
eighty (180) consecutive days.

 

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(c) Termination of Employment for Death. In the event of the Optionee’s death,
the Option shall be exercisable by the personal representative of the Optionee’s
estate or by any person or persons who shall have acquired the Option directly
from the Optionee by bequest or inheritance, to the same extent that the
deceased Optionee could exercise the Option at the date of death.

 

(d) Termination of Option. If the Option is not exercised within whichever of
the exercise periods specified in this paragraph 4 is applicable, the Option
shall terminate upon expiration of such exercise period.

 

(e) Employment With Competitor. In the event that the Optionee engages in any
activity competitive to any business of the Company that is being actively
conducted or planned at the time of the Optionee’s termination of employment
with the Company, prior to the expiration of two (2) years after such
termination of employment, either directly or indirectly, as a proprietor,
partner, employee, officer, director, consultant, or holder of any equity
interest in any competitive entity (excluding less than a two percent (2%)
interest in any publicly traded entity), then the Option shall immediately
terminate and the Optionee shall forfeit all economic benefits derived by the
Optionee with respect to any part of the Option exercised at any time after six
(6) months prior to the Optionee’s termination of employment. Forfeiture of
economic benefits shall mean payment to the Company of an amount equal to the
difference between the price paid by the Optionee for shares received upon the
exercise of the Option and the Market Value of those shares on the date of
exercise.

 

5. Notice of Exercise; Payment. To exercise the Option, in whole or in part, the
Optionee shall deliver written notice of exercise to the Company at its
principal executive offices (attention: Chief Executive Officer), unless the
Committee decides otherwise. The notice shall state whether the Optionee is
exercising the ISO or non-ISO portion of the Option (if such distinction has
been made hereunder), or a combination thereof. The Company and the Optionee
agree to take any action necessary to identify clearly the ISO and non-ISO, if
any, portions of the Option. The Option may be exercised at any time and from
time to time during the term of this Option, as to any part or all of the shares
covered hereby, but not as to less than one hundred (100) shares at any one
time, unless the number purchased is the total number at the time purchasable
under the Option. The Optionee’s notice shall: (a) state the election to
exercise the Option, the number of shares with respect to which it is being
exercised, and the address and social security number of the Optionee; (b) be
signed by the person entitled to exercise the Option and, if being exercised by
any person or persons other than the Optionee, be accompanied by proof,
satisfactory to legal counsel for the Company, of the right of such person or
persons to exercise the Option; (c) be accompanied by payment in full of the
Option Price for the shares to be purchased which shall be payable to the
Company, either in cash or by surrender of Stock owned by the Optionee valued at
Market Value.

 

Shares delivered in payment shall be valued at their Market Value at the date of
delivery. This Option may not be exercised if such exercise will constitute a
violation of applicable federal or state securities or other law or valid
regulations. As a condition to the exercise of this Option, the Company may
require the person exercising this Option to make any representations and
warranties to the Company as the Company may deem to be required by applicable
law or regulation. In any such event, no shares shall be issued unless and until
the Company is satisfied with the correctness of such representation and
warranty. Moreover, the Company in its discretion may postpone the issuance
and/or delivery of such stock pending exchange listing, or registration or other
qualification of such shares under any state and/or federal law, rule or
regulation as the Company may consider appropriate. Upon exercise of all or any
portion of this Option and receipt of proper payment, the certificate or
certificates for the number of shares as to which the Option is exercised shall
be issued to and registered in the name of any person or persons exercising the
Option.

 

6. Tax Withholding. The exercise of the Option is subject to the satisfaction of
withholding tax or other withholding liabilities, if any, under federal, state
and local laws in connection with such exercise or the delivery or purchase of
shares pursuant hereto. The exercise of the Option shall not be effective unless
applicable withholding shall have been effected or obtained. The Optionee may
satisfy any such withholding tax obligation for the Option by tendering a cash
payment or in any other manner acceptable to the Committee in its sole
discretion.

 

7. Option Transferability. Except as provided below, the Option by its terms is
not transferable by the Optionee otherwise than by will or the laws of decent
and distribution, and is exercisable during the Optionee’s lifetime only by the
Optionee. Except as provided below, any attempted sale, transfer, assignment,
pledge, hypothecation or other disposition of the Option contrary to the terms
hereof, and any execution, levy, attachment or similar process upon the Option,
shall be without effect. To the extent the Option is not designated as an ISO,
the Option may be transferred to (a) the Optionee’s spouse, (b) the Optionee’s
descendants, or (c) a trust created primarily for the benefit of the Optionee,
the Optionee’s spouse and/or the Optionee’s descendants (“Authorized
Transferees”). The non-ISO portion of the Option

 

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may only be transferred to an Authorized Transferee provided there is no
consideration for the transfer, all further transfers are prohibited, and the
Authorized Transferee succeeds to all the rights and benefits (except any right
to transfer) and is subject to all obligations, conditions, and limitations
applicable to the original Optionee. Such rights and benefits (except any right
to further transfer) and obligations shall be determined as if the original
Optionee continues to hold the Option, whereby provisions of the Plan and this
Agreement dealing with termination of employment, retirement, disability or
death of an Optionee will continue to refer to the original Optionee
notwithstanding a transfer to an Authorized Transferee.

 

8. Rights as a Shareholder. Neither the Optionee nor a transferee of this Option
shall have any rights as a shareholder with respect to any shares covered hereby
until the date he or she shall have become the holder of record of such shares.
No adjustment shall be made for dividends, distributions or other rights for
which the record date is prior to the date on which he or she shall have become
the holder of record thereof, except as provided in the Plan.

 

9. Other Plan Provisions. All rights of the Optionee and all obligations of the
Company with respect to the Option granted hereby or otherwise arising under
this Agreement are further limited and qualified as set forth in the Plan, and,
in the event of any conflict between provisions of the Plan and those of this
Agreement, the Plan provisions shall govern.

 

10. Successors. This Agreement shall inure to the benefit of and be binding upon
the parties and their respective successors.

 

This Agreement has been executed by the parties as of the date first set forth
above.

 

X-RITE, INCORPORATED By     OPTIONEE:  

 

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