ACACIA RESEARCH CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is dated as of the _____ day of ________,_______ by and between
Acacia Research Corporation, a California corporation (the "Corporation") and
_____________________ (the "Optionee").
W I T N E S S E T H
WHEREAS, the Committee believes that the grant of an Option to the Optionee will
promote the interests of the Corporation by inducing the Optionee to render
faithful and efficient services to the Corporation; and
WHEREAS, pursuant to the Acacia Research Corporation 1996 Stock Option Plan (the
"Plan"), the Corporation has granted to the Optionee, effective as of the ______
day of _________, ______ (the "Award Date"), a Nonstatutory Option to purchase
all or any part of __________ authorized but unissued Shares, par value, upon
the terms and conditions set forth herein and in the Plan (the "Option").
NOW, THEREFORE, in consideration of the past and prospective services
rendered and to be rendered by the Optionee, and the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
2. GRANT OF OPTION. This Nonstatutory Stock Option agreement evidences
the Corporation's grant to the Optionee of the right and option to purchase, on
the terms and conditions set forth herein and in the Plan, all or any part of an
aggregate of _________ authorized but unissued Shares at the price of _______
per Share (the "Exercise Price"). The Corporation has granted the Option as a
matter of separate inducement in connection with the Optionee's employment, and
not in lieu of any salary or other compensation for the Optionee's services.
3. TERM. The Option shall expire on __________, _____ (the Expiration
Date").
4. VESTING OF OPTION.
The Option shall vest in installments for a number of shares (subject to
adjustment as provided in Section 12) as follows:
Date of Vesting Number of Shares (subject
of Option to adjustment) as to
Installment which Option vests
_____________ __________________
5. EXERCISABILITY OF OPTION. No Options shall become exercisable prior
to six months after the Award Date. After such date, the Option (as to vested
shares only) may be exercised in whole or in part, at the discretion of the
Optionee, from time to time until its expiration or earlier termination. To the
extent that the Optionee does not in any period purchase all or any part of the
Shares to which the Optionee is entitled, the Optionee has the right
cumulatively thereafter to purchase any Shares not so purchased and such right
shall continue until the Option terminates or expires. Fractional Share
interests shall be disregarded, but may be cumulated for purposes of determining
how many Shares have been purchased at any time under the Option. No fewer then
1,000 Shares may be purchased at any time, unless the number purchased is the
total number then available for purchase under the Option.
6. METHOD OF EXERCISE OF OPTION.
(a) WRITTEN NOTICE. Each exercise of the Option shall be by written
notice of exercise duly delivered to the Corporation, specifying the number
of Shares with respect to which the Option is being exercised.
(b) PAYMENT. Such written notice must be accompanied by payment in
full for the Shares to be purchased, and payment may take the following
form:
(i) lawful money of the United States of America or a certified
or bank cashier's check;
(c) SECURITIES LAWS. The written notice of exercise shall specify
that the Shares are being acquired by the Optionee for investment only and
not with a view to resale or distribution.
7. WITHHOLDING TAXES. Upon the exercise of the Option, the Optionee
shall make such arrangements as the Committee may require for the satisfaction
of any federal, state, local or foreign withholding tax obligations arising in
connection with the exercise of the Option. The Optionee agrees that on
disposition of Shares acquired by exercising the Option, the Optionee shall
comply with all requirements of the Committee for satisfaction of any federal,
state, local or foreign withholding tax obligations arising in connection with
the disposition of the Shares.
8. EFFECT OF TERMINATION OF EMPLOYMENT/SERVICES TO CORPORATION. Should
the Optionee cease to provide services to the Corporation, the effect of such
termination Optionee's rights and benefits of Option are dependent on the
circumstances surrounding such termination, which are as follows:
(i) Options shall cease to vest on the date of termination
of Optionee's employment with or provision of services to the
Corporation;
(ii) except as provided in clause (iii) below, the Option
may be exercised at any time with in one year after Optionee's
termination of employment with or provision of services to the
Corporation (to the extent it was exercisable on such date);
(iii) if Optionee's employment with or provision of services
to the Corporation was terminated for cause (as determined by the
Committee in its sole discretion), the Option and all rights
hereunder, to the extent not previously exercised, shall terminate and
become null and void at such time as Optionee ceases to be employed by
the Corporation;
(iv) if an Optionee dies while employed by or in the midst
of providing services to the Corporation or during the period referred
to in clause (ii) above, the Option shall expire one year after the
date of death. During the one year period after the death of the
Optionee, the Option may be exercised (to the extent it was
exercisable as of the date of death or earlier termination of such
Optionee's employment or provision of services) by the person or
persons to whom the Optionee's rights under the option shall pass by
will or by the applicable laws of descent and distribution;
(v) if an Optionee's employment by or provision of services
to the Corporation was terminated as a result of a "permanent and
total disability" within the meaning of Section 22(e) (3) of the Code,
the Optionee or the Optionee's personal representative as an agent for
the Optionee, shall have one year from the date of termination of
employment/provision of services to exercise the Option (to the extent
it was exercisable on such date).
Nothing in this Section 8 shall be deemed to extend the term of the Option
beyond the Expiration Date nor to limit the Corporation's ability to terminate
the Option at an earlier date pursuant to the other provision of this Agreement
and the Plan.
9. NON-TRANSFERABILITY OF OPTION. This Option and any other rights of
the Optionee under this Agreement or the Plan are non-transferrable as provided
in Section 6 of the Plan.
10. NO RIGHTS AS SHAREHOLDER. The Optionee, or a transferee of the
Optionee, has no rights as a shareholder with respect to any Shares covered by
an Option until the date of the issuance of a stock certificate for such Shares.
11. MODIFICATION, EXTENSION AND ASSUMPTION OF OPTION. The Option may be
modified, extended or assumed from time to time by the Committee within the
limitations of and by the means specified in Section 10 of the Plan.
12. ADJUSTMENT OF OPTION
(a) GENERALLY. As provided in Section 9 of the Plan, the Committee
may make adjustments to the number of Shares covered by the Option, the
Exercise Price of the Option or any other Provision in this Agreement that
the Committee deems necessary or advisable to adjust.
(b) REORGANIZATIONS. In the event that the Corporation is a party to
a merger or other reorganization, or in contemplation of such a merger or
other reorganization, and to the extent that the Committee, in its sole
discretion, so directs, the Corporation may:
(i) terminate the Option by paying the Optionee the
difference between the Exercise Price and the consideration to be
received by stockholders of the Corporation for "in-the-money" options
and terminate all other options without payment;
(ii) provide for assumption of the Option by the surviving
corporation;
(iii) if the Corporation is a surviving corporation, continue
the Option; or
(iv) take any action with respect to the Option that the
Committee, in its sole discretion, deems necessary or advisable.
13. NOTICES. Any notice to be given under the terms of this Agreement
shall be in writing addressed to the Corporation at its principal office located
at 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, to the attention of
Xxxxxxx Xxxx-Xxx Xxx, and to the Optionee at the address given beneath the
Optionee's signature hereto, or at such other address as either party may
hereafter designate in writing to the other.
14. PLAN. The Option is subject to, and the Optionee agrees to be bound
by, all of the terms and conditions of the Plan. The Optionee acknowledges
receipt of a copy of the Plan, which is made a part hereof by this reference.
15. SUCCESSORS. Subject to the Plan, where the context permits,
"Optionee" as used in this Nonstatutory Stock Option Agreement shall include the
Optionee's executor, administrator or persons to whom Optionee's rights pass by
will or the applicable laws of descent and distribution.
16. GOVERNING LAW. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Optionee has
hereunto set his or her hand.
ACACIA RESEARCH CORPORATION
By__________________________________
Title_______________________________
OPTIONEE
____________________________________
(Signature)
____________________________________
(Print Name)
____________________________________
(Address)
____________________________________
(City, State, Zip Code)
