1999 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Between
MENLO ACQUISITION CORPORATION
and
------------------------------
NSO
MENLO ACQUISITION CORPORATION
1999 Stock Incentive Plan
Nonstatutory Stock Option Agreement
THIS AGREEMENT, dated the _____ of ________________, between MENLO
ACQUISITION CORPORATION., a Delaware corporation (the "Company"), and
____________________ ("Participant"), is made pursuant and subject to the
provisions of the Company's 1999 Stock Option Plan (the "Plan"), and all terms
used herein that are defined in the Plan shall have the same meaning given them
in the Plan:
W I T N E S S E T H :
1. Grant of Option. Pursuant to the provisions of the Plan, the Company has
granted to Participant on the _____ day of __________, _______ (the "Date of
Grant"), subject to the terms and conditions of the Plan and subject further to
the terms and conditions herein set forth, the right and option to purchase from
the Company (the "Option") all or any part of an aggregate of _______ shares of
Company Common Stock at the purchase price of $ _______ per share (the "Option
Price"), such Option to be exercisable as hereinafter provided. The Option
evidenced hereby is intended to be a nonstatutory stock option that does not
receive special tax treatment under Section 422 of the Internal Revenue Code
(the "Code").
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2. Terms and Conditions. The Option evidenced hereby is subject to the
following terms and conditions:
(a) Expiration Date. This Option shall expire ten years from
the Date of Grant.
(b) Nontransferability. This Option shall be
nontransferable except by will or by the laws of descent and
distribution and, during the lifetime of the
Participant, may be exercised only by the Participant,
except as provided in Section 3 below.
(c) Exercise of Service Option.
(i) Vesting:
____ This Option is 100% vested, and, subject to
the terms and conditions set forth herein, fully exercisable at all times.
____ This Option shall vest, and shall be
exercisable, in accordance with the following schedule:
Anniversary of Percentage of shares of Common
Date of Grant Stock allocable to Option which may
be purchased
First _____________
Second _____________
Third _____________
Fourth _____________
Fifth _____________
Sixth _____________
Seventh _____________
Eighth _____________
Ninth _____________
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(ii) Notwithstanding any provisions contained in the
Plan or in this Agreement, in the event of a Change of
Control, the Board may in its discretion provide that this
Option shall become fully vested and the Participant shall be
entitled to exercise such Option, in whole or in part.
(d) Method of Exercising and Payment for Shares. This Option may
only be exercised by written notice delivered to the Treasurer at the
Company's principal office. The exercise date will be (i) in the case
of notice by mail, the date of postmark or (ii) if delivered in
person, the date of delivery. Such notice shall be accompanied by
payment of the Option Price in full by cash (which shall include
payment by check, bank draft or money order payable to the order of
the Company).
3. Termination of Option Upon Termination of Employment. The right of
Participant and his successors in interest to exercise this Option or to vest in
any unvested portion of this Option shall terminate when his directorship or
other employment with the Company or any Subsidiary is terminated for any reason
except as provided in subsections 3(a) and 3(b) below.
(a) Exercise following Death. In the event Participant dies
while he is a director or is otherwise employed by the Company or any
Subsidiary or within three months following termination of his
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directorship or other employment due to retirement or disability and
before the exercise in full or expiration of this Option, Participant's
estate (or the person or persons to whom the rights under this Option
shall have passed by will or the laws of descent and distribution) may
exercise this Option at any time within one year next following
Participant's death (but in any event before the expiration date of the
Option period) for the entire number of shares remaining subject to
this Option.
(b) Exercise following Termination, Disability or Retirement.
In the event of termination of Participant's directorship or other
employment by the Company or any Subsidiary for any reason other than
death, including retirement or termination approved by the Company
because of disability, before exercise in full or expiration of this
Option, Participant may exercise the vested and exercisable portion of
this Option at any time within three months next following such
termination of directorship or other employment (but in any event
before the expiration date of the Option period) for the number of
shares remaining subject to the vested and exercisable portion of this
Option.
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For the purposes of this Section 3, it shall not be considered a
termination of employment if Participant is placed by the Company or any
Subsidiary on military or sick leave or such other type of leave of absence that
the Committee considers as continuing the employment relationship intact. For
the purposes of this Section 3, only a termination of directorship or other
employment on or after the Participant has reached age 65 shall be considered a
retirement, unless the Committee designates that an earlier termination shall be
considered a retirement. At the time of any exercise of any Option exercised
pursuant to this Section 3, the Option Price shall be paid in full as provided
in Section 2.
Notwithstanding subsections 3(a) and 3(b) above, in no event may this
Option be exercised after the Expiration Date.
4. Governing Law. This Agreement shall be governed by the laws of the State
of Delaware.
5. Conflicts. In the event of any conflict between the provisions of the
Plan as in effect on the date of grant and the provisions of this Agreement, the
provisions of the Plan shall govern. All references herein to the Plan shall
mean the Plan as in effect on the date hereof. Terms defined in the Plan are
used herein as so defined.
6. Participant Bound by Plan. In consideration of the grant of this Option,
Participant agrees he will comply with such conditions as the Board of Directors
and the Committee may impose on the exercise of the Option.
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7. Binding Effect. Subject to the limitations stated above and in the Plan,
this Agreement shall be binding upon and inure to the benefit of the legatees,
distributees and personal representatives of Participant and the successors of
the Company.
8. Change in Capital Stock Structure. In the event of changes in the
capital stock structure of the Company, appropriate adjustments in the number of
shares for which the Option shall be exercisable, or the exercise price, or
both, shall be made, and appropriate adjustments in the required values of
Common Stock under Section 3 shall be made, as provided in Section 11 of the
Plan.
9. Tax Obligations Upon Exercise. The difference between the "Fair Market
Value" of Company Common Stock purchased when the Option is exercised and the
Option Price is compensation taxable to the Participant as ordinary income and
subject to applicable federal and state taxes which the Company may be obligated
to withhold. The Participant agrees to make arrangements suitable to the Company
for the payment of all applicable withholding taxes, if any. By a timely
election (to the extent permitted by Rule 16b-3 under the Securities Exchange
Act of 1934), the Participant may elect to have the Company withhold upon
exercise a number of shares of Company Stock having a "Fair Market Value" equal
to the minimum applicable withholding taxes. Any such election shall be subject
to approval by the Committee.
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10. Successors and Assigns. This Agreement shall be binding on the Company
and shall be enforceable against its successors and assigns.
11. Notice Provisions. Any notice or election required or permitted under
this Option shall be delivered in writing to the Treasurer at the Company's
principal offices in Parsippany, New Jersey.
12. Transfer of Shares of Company Stock. Upon the exercise of the Option,
the Participant shall not transfer, encumber or dispose of the Common Stock so
purchased unless: (a) an effective registration statement covering such shares
is filed pursuant to the Securities Act of 1933, as amended, and applicable
state law, or (b) an opinion letter of the Participant's counsel is obtained,
satisfactory to the Company and its counsel, that such transfer is not in
violation of any applicable federal or state laws or regulations.
13. Amendment of this Option Agreement. The Board may modify or amend this
Option if it so determines, in its sole discretion, that amendment is necessary
or advisable. No amendment of this Option, however, may, without the consent of
the Participant, make any changes which would adversely affect the rights of the
Participant.
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14. No Guaranteed Right to Employment. If Participant is employed by the
Company, nothing contained herein shall confer upon the Participant any right to
be continued in the employment of the Company or interfere in any way with the
right of the Company to terminate his employment at any time for any cause.
With this Option, you will receive a number of documents relating to the
Company and a receipt for those documents. You should sign the receipt for this
material and return it to the Company.
IN WITNESS WHEREOF, MENLO ACQUISITION CORPORATION has caused this Agreement
to be signed by the President and the Participant has affixed his signature
hereto.
MENLO ACQUISITION CORPORATION
By______________________________
President
______________________________
Participant
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