LUNAR CORPORATION
NON-QUALIFIED STOCK OPTION
Lunar Corporation (the "Company") hereby irrevocably grants to ? (the
"Employee") an option to purchase from time to time all or any part
of a total
of ? common shares of the Company, at a price of $? per share, upon
the terms
and conditions set forth below.
This option is granted as of ? under the Lunar Corporation Amended
and
Restated Stock Option Plan (herein called the "Plan") in
consideration for
employee's agreement that any dispute with the company will be
submitted
exclusively to arbitration according to the procedure described in
Attachment
A hereto; and for the purpose of furnishing to the Employee an
appropriate
incentive to improve operations and increase profits, and encourage
the
Employee to continue employment with the Company and its
subsidiaries.
The terms and conditions of the option are as follows:
1. This option may, but need not, be exercised in installments,
but may
be exercised only to the extent, and within the time periods,
described
below. During the lifetime of the Employee, it may be exercised
only by
the Employee and (except as provided below) only while in the
employ of
the Company or any of its subsidiaries.
2. The option may be exercised only after one year following
the
granting date. Termination of employment in this one-year
period will
terminate all rights under the option. After one year from the
granting
date, one-fifth of the total number of shares covered by this
option may
be exercised; after two years from the granting date, two-fifths
of the
total number of shares covered by this option may be exercised;
after
three years from the granting date, three-fifths of the total
number of
shares covered by this option may be exercised; after four years
from the
granting date, four-fifths of the total number of shares covered
by this
option may be exercised; and after five years, this option shall
be
exercisable in full. The right to purchase shall cumulate so
that shares
may be purchased at any time after becoming eligible for
purchase until
termination of the option.
3. Notwithstanding the foregoing provisions of this paragraph
2, this
option shall become fully exercisable in the event of a "Change
in
Control" of the Company. A Change in Control is more fully
defined in
the Plan Document, but includes:
(i) The sale or other disposition by the Company of all or
substantially
all of its assets to a person, firm or other entity not
controlling,
controlled by or under common control with the Company;
(ii) The sale or other disposition (including a merger or
consolidation)
of capital stock of the Company if, as a consequence
thereof,
capital stock representing more than 50% of the Company's
total
voting power is sold or disposed of, in one or a series of
related
transactions, to a person, firm or other entity not
controlling,
controlled by, or under common control with the Company.
4. If employment with the Company terminates at a time when the
Employee
is entitled to exercise all or a part of the option, for any
reason other
than death, the option shall expire as of thirty (30) days after
written
notice of termination; provided that if the termination of
employment is
by reason of retirement (under a pension or retirement plan of
the
Company or subsidiary), this option may be exercised by the
Employee
within twelve months after the date of retirement but only to
the extent
exercisable on said date of retirement. A leave of absence
approved in
writing by the Human Resources Manager and the President shall
not be
termination of employment for purposes of the Plan.
5. In the event of death of the Employee during employment or
after
retirement at a time when this option is otherwise exercisable,
the
option may be exercised within twelve months after such death,
and only:
a. By the executor or administrator of the estate of the
Employee
or the person or persons to whom rights under the
option have
passed by will or the laws of descent and
distribution; and
b. To the extent that the Employee was entitled to do so
at the
date of death.
6. The option may not, under any circumstances, be exercised
after
expiration of ten (10) years from the granting date.
7. No fractional share may be purchased under this option
except in
combination with a fraction or fractions under another option or
options
granted under the Program, and then only to the extent that such
combination equals a full share.
8. Nothing herein confers upon the Employee any right to
continue in the
employ of the Company or of any subsidiary.
9. This option shall not be transferable or assignable, in
whole or in
part, except (a) by will or by the laws of descent and
distribution or
(b) as may be approved by the Committee. Subject to the
foregoing, this
option may not be assigned, transferred (except as aforesaid),
pledged,
or hypothecated in any way, whether by operation of law or
otherwise, and
shall not be subject to execution, attachment, or similar
process. Any
attempt at assignment, transfer, pledge, hypothecation, or other
disposition of this option contrary to the provisions hereof,
and the
levy of any attachment or similar process upon this option,
shall be null
and void and without effect.
10. The shares of common stock issuable to Optionee upon
exercise of
this option ("Option Stock") are expressly subject to the terms
of the
Bylaws of the corporation as may be amended by the Shareholders
from time
to time. No transfer of Option Stock may be made except in
accordance
with the provisions of the Bylaws. By accepting this option,
Optionee
hereby agrees that, as an express condition to receiving shares
of common
stock issuable upon exercise of this option, Optionee and his
spouse will
execute whatever documents the Company requires so as to bind
the
Optionee and his spouse, and the shares of common stock issuable
upon
exercise of this option, to the terms of the Bylaws.
11. All terms and conditions of this option agreement are
subject to and
shall be interpreted according to the terms of the Lunar
Corporation
Amended and Restated Stock Option Plan (attached hereto).
12. Prior to the exercise of this option and as a condition to
the
Company's obligation to deliver shares upon such exercise, the
Optionee
shall make arrangements satisfactory to the Company for the
payment of
any applicable federal or other withholding taxes payable as a
result
thereof.
13. The option may be exercised only by delivering to the
Secretary or
other designated employee of the Company a written notice of
exercise,
specifying the number of common shares with respect to which the
option
is then being exercised, and accompanied by payment of the full
purchase
price of the shares being purchased in cash, or by the surrender
of other
common shares of the Company held by the Employee having a then
fair
market value equal to the purchase price, or a combination
thereof, plus
payment in cash of the full amount of any taxes which the
Company
believes are required to be withheld and paid with respect to
such
exercise, and in the event the option is being exercised by a
person or
persons other than the Employee, such appropriate tax clearance,
proof of
the right of such person or persons to exercise the option, and
other
pertinent data as the Company may deem necessary.
14. The Company shall issue a certificate or certificates for
shares
purchased upon exercise of the option; however, the Company
shall not be
required to issue or deliver any certificate for shares
purchased pending
compliance with all applicable federal and state securities and
other
laws (including any registration requirements) and compliance
with rules
and practices of any stock exchange upon which the Company's
common
shares are listed.
15. In the event that there is any change in the number of
issued common
shares of the Company without new consideration to the Company
(such as
by stock dividends or stock split-ups), then (i) the number of
shares at
the time unexercised under this option shall be changed in
proportion to
such change in issued shares; and (ii) the option price for the
unexercised portion of the option granted shall be adjusted so
that the
aggregate consideration payable to the Company upon the purchase
of all
shares not theretofore purchased shall not be changed.
If the outstanding common shares of the Company shall be
combined, or be
changed into another kind of stock of the Company or into
securities of
another corporation, whether through recapitalization,
reorganization,
sale, merger, consolidation, etc., the Company shall cause
adequate
provision to be made whereby the person or persons entitled to
exercise
this option shall thereafter be entitled to receive, upon due
exercise of
any portion of the option, the securities equivalent to those
which that
person would have been entitled to receive for common shares
acquired
through exercise of the same portion of such option immediately
prior to
the effective date of such recapitalization, reorganization,
sale,
merger, consolidation, etc. If appropriate, due adjustment
shall be made
in the per-share or per-unit price of the securities purchased
on
exercise of this option following said recapitalization,
reorganization,
sale, merger, consolidation, etc.
16. Upon written request, the Company agrees to furnish the
Optionee a
copy of its annual financial statements within 120 days after
the end of
each fiscal year.
17. Neither this option, shares issued upon its exercise, any
excess of
market value over option price, nor any other rights, benefits,
values,
or interest resulting from the granting of this option shall be
considered as compensation for purposes of any pension or
retirement
plan, insurance plan, investment or stock purchase plan, or any
other
employee benefit plan of the Company or any of its subsidiaries.
18. Every notice or other communication relating to this
Agreement shall
be in writing and shall be mailed to or delivered to the party
for whom
it is intended in each case properly addressed, if to the
Company at its
principal place of business, Attention: Corporate President, or
if
mailed or delivered to the Optionee at his address set forth
below his
signature to this Agreement (or to such other address as may
hereafter be
designated in writing by either party to this Agreement to the
other).
IN WITNESS WHEREOF, the Company has caused this option to be
executed by its duly authorized officers as of the granting date
above set forth.
_________________________________________________
President and Date
Chief Executive Officer
_________________________________________________
Attest
_________________________________________________
Secretary Date