1
Exhibit 99.2
ADVANCED LOGIC RESEARCH, INC.
DIRECTORS' NON-QUALIFIED STOCK OPTION AGREEMENT
This agreement is made as of _______________, 199__ (the "Grant Date"),
between ADVANCED LOGIC RESEARCH, INC., a Delaware corporation (the "Company"),
and _________________ ("Optionee") (the "Agreement").
WITNESSETH:
WHEREAS, the Company has adopted the Advanced Logic Research, Inc.
Directors' Non-Qualified Stock Option Plan (the "Plan"), which Plan is
incorporated in this Agreement by reference and made a part of it;
WHEREAS, the Company desires to provide additional incentives and
rewards for Optionee's work as a director of the Company; and
WHEREAS, the Company has determined that it would be to the advantage
and in the interest of the Company and its stockholders to grant the options
provided for in the Agreement to Optionee for that purpose.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties to this Agreement hereby agree as follows:
1. Option Grant. Subject to obtaining approval of the Plan by the
Company's stockholders, the Company hereby grants to Optionee the right and
option to purchase from the Company on the terms and conditions hereinafter set
forth, all or any part of an aggregate of ( ) shares of the Common
Stock of the Company (the "Stock"). The exercise price of the stock subject to
this option shall be $ per share.
2. Option Period. This option shall be exercisable only during the
Option Period, and during such Option Period, the exercisability of the option
shall be subject to the limitations of paragraph 3 and the vesting provisions of
paragraph 4. The Option Period shall commence on the Grant Date and, except as
provided in paragraph 3, shall end on the Terminal Date which shall be ten years
and one month from the Grant Date.
3. Limits on Option Period. The Option Period may end before the
Terminal Date, as follows:
a. If Optionee ceases to be a director on the Company's Board of
2
Directors (the "Board") for any reason other than cause, disability (within the
meaning of subparagraph (c)) or death during the Option Period, the Option
Period shall terminate one year after the date Optionee ceases to be a director
or on the Terminal Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under paragraph 4 on the date
Optionee ceases to be a director.
b. If Optionee should die while serving on the Company's Board,
the Option Period shall end one year after the date of death or on the Terminal
Date, whichever shall first occur, and Optionee's executor or administrator or
the person or persons to whom Optionee's rights under this option shall pass by
will or by the applicable laws of descent and distribution may exercise the
entire unexercised portion of this option (or any lesser amount).
c. If Optionee ceases to be a director by reason of disability,
as defined below, the Option Period shall end one year after the date Optionee
ceases to be a director or on the Terminal Date, whichever shall first occur,
and the option shall be exercisable only to the extent exercisable under
paragraph 4 on the date Optionee ceases to be a director. For purposes of this
subparagraph (c), an individual is permanently and totally disabled if he is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which as lasted or can be expected to last for a continuous period of
not less than 12 months. An individual shall not be considered to be permanently
and totally disabled unless he furnishes proof of the existence thereof in such
form and manner, and at such times, as the Board may require.
d. If Optionee is removed from the Board for cause during the
Option Period, the Option Period shall terminate on the date of such Optionee's
removal as a director and shall not thereafter be exercisable to any extent.
4. Vesting of Right to Exercise Options. The shares covered by this
option shall vest as to one hundred percent (100%) of the number of shares
covered by the option, at any time after six months from the Grant Date. No
partial exercise of this option may be for less than five percent (5%) of the
total number of shares then available under this option to purchase shares of
Stock. In no event shall the Company be required to issue fractional shares.
5. Method of Exercise. Optionee may exercise the option with respect
to all of any part of the shares of Stock then subject to such exercise as
follows:
a. By giving the Company written notice of such exercise,
specifying the number of such shares as to which this option is exercised. Such
notice shall be accompanied by an amount equal to the exercise price of such
shares, in the form of any one or combination of the following: cash; a
certified check, bank draft, postal or express money order payable to the order
of the Company in lawful money of
2.
3
the United States; or, if permitted by the Board, shares of Stock valued at fair
market value in accordance with procedures established by the Board, or a
full-recourse, interest-bearing note including such terms as the Board
determines appropriate.
b. If required by the Company, Optionee shall give the Company
satisfactory assurance in writing, signed by Optionee or Optionee's legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof, provided that such
assurance shall be deemed inapplicable to (1) any sale of such shares by such
Optionee made in accordance with the terms of a registration statement covering
such sale, which has heretofore been (or may hereafter be) filed and become
effective under the Securities Act of 1933, as amended, and with respect to
which no stop order suspending the effectiveness thereof has been issued, and
(2) any other sale of such shares with respect to which in the opinion of
counsel for the Company, such assurance is not required to be given in order to
comply with the provisions of the Securities Act of 1993, as amended.
As soon as practicable after receipt of the notice required in
paragraph 5(a) and satisfaction of the conditions set forth in paragraph 5(b),
the Company shall, without transfer or issue tax and without other incidental
expense to Optionee, deliver to Optionee at the office of the Company, at 9401
Jeronimo, Irvine, California 92718, attention of the Corporate Secretary, or
such other place as may be mutually acceptable to the Company and Optionee, a
certificate or certificates of such shares of Stock; provided, however, that the
time of such delivery may be postponed by the Company for such period as may be
required for it with reasonable diligence to comply with applicable registration
requirements under the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, any applicable listing requirements of any
national securities exchange, and requirements under any other law or regulation
applicable to the issuance or transfer of such shares. If Optionee fails to
accept delivery of and pay for all or any part of the number of shares specified
in such notice upon tender or delivery thereof, Optionee's right to purchase
such shares may be terminated by the Company at its election.
6. Corporate Transactions. If there should be any change in the Stock
subject to this option, through merger, consolidation, reorganization,
reincorporation, or other similar change in the corporate structure of the
Company, the Company may make appropriate adjustments in order to preserve, but
not to increase, the benefits to Optionee, including adjustments in the number
of shares subject to this option and in the exercise price per share. If there
shall be any change in the Stock subject to the option herein granted, through
recapitalization, stock split, stock dividend (in excess of two percent) or
other similar change in the corporate structure of the Company, adjustments
shall automatically occur to preserve but not increase the benefits to the
Optionee, including adjustments in the number of shares subject to this option
and in the exercise price per share. Any adjustment made pursuant to this
paragraph 6 as a consequence of a change in the corporate structure of the
Company shall not entitle Optionee to acquire
3.
4
a number of shares of Stock of the Company or shares of stock of any successor
company greater than the number of shares Optionee would receive if, prior to
such change, Optionee had actually held a number of shares of Stock equal to the
number of shares then subject to this option.
7. Limitations on Transfer. This option shall, during Optionee's
lifetime, be exercisable only by Optionee, and neither this option nor any right
hereunder shall be transferable by Optionee by operation of law or otherwise
other than by will or the laws of descent and distribution. In the event of any
attempt by Optionee to alienate, assign, pledge, hypothecate, or otherwise
dispose of this option or of any right hereunder, except as provided for in this
Agreement, or in the event of the levy of any attachment, execution, or similar
process upon the rights or interest hereby conferred, the Company at its
election may terminate this option by notice to Optionee and this option shall
thereupon become null and void.
8. No Stockholder Rights. Neither Optionee nor any person entitled to
exercise Optionee's rights in the event of Optionee's death shall have any of
the rights of a stockholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.
9. Notice. Any notice required to be given under the terms of this
Agreement shall be addressed to the Company in care of its Corporate Secretary
at the office of the Company at 9401 Jeronimo, Irvine, California 92718, and any
notice to be given to Optionee shall be addressed to Optionee at the address
given by Optionee beneath Optionee's signature to this Agreement, or such other
address as either party to this Agreement may hereafter designate in writing to
the other. Any such notice shall be deemed to have been duly given when enclosed
in a properly sealed envelope addressed as aforesaid, registered or certified
and deposited (postage and registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United States.
10. Board Decisions Conclusive. All decisions of the Board upon any
question arising under the Plan or under this Agreement shall be conclusive.
11. Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company. Where the context
permits, "Optionee" as used in this Agreement shall include Optionee's executor,
administrator or other legal representative or the person or persons to whom
Optionee's rights pass by will or the applicable laws of descent and
distribution.
12. Withholding. Optionee agrees to make appropriate arrangements with
the Company for satisfaction of any applicable federal, state or local income
tax withholding requirements or social security requirements.
4.
5
13. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first written above.
ADVANCED LOGIC RESEARCH, INC.
By_______________________________
_________________________________
_______________________, Optionee
Address: _________________________________
_________________________________
5.