EXHIBIT 99.3
Form of Non-Qualified Stock Option Agreement
ADVANCED LOGIC RESEARCH, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of December 15, 1993 (the "Grant
Date") between ADVANCED LOGIC RESEARCH, INC., a Delaware
corporation (the "Company"), and [FIRSTNAME] [LASTNAME]
("Optionee").
WITNESSETH:
WHEREAS, the Company has adopted the Advanced Logic Research,
Inc. Flexible Stock Incentive Plan (the "Plan"), which Plan is
incorporated in this Agreement by reference and made a part of it;
WHEREAS, the Company recognizes the past efforts by Optionee
on behalf of the Company and its affiliates and desires to motivate
Optionee in Optionee's work for the Company and its affiliates; and
WHEREAS, the Company has determined that it would be to the
advantage and in the interest of the Company and its shareholders
to grant the options provided for in the Agreement to Optionee as a
reward and an incentive for increased efforts on behalf of the
Company and its affiliates;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties to this Agreement hereby agree
as follows:
1. OPTION GRANT. 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 [# of Shs] shares of the Common Stock of the Company (the
"Stock"). The purchase 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.
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3. LIMITS ON OPTION PERIOD. The Option Period may end
before the Terminal Date, as follows:
(a) If Optionee ceases to be a bona fide employee of the
Company or an affiliate for any reason other than cause, disability
(within the meaning of subparagraph (c)) or death during the Option
Period, the Option Period shall terminate three months after the
date of such cessation of employment 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 of
Optionee's cessation of employment.
(b) If Optionee should die while in the employ of the
Company or its affiliates, 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's employment is terminated by reason of
disability, as defined below, the Option Period shall end one year
after the date of Optionee's cessation of employment 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 of Optionee's cessation of employment. 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 has 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
Committee of the Board of Directors that administers the Plan (the
"Committee") may require.
(d) If Optionee is on a leave of absence from the
Company or an affiliate because of his disability, or for the
purpose of serving the government of the country in which the
principal place of employment of Optionee is located, either in a
military or civilian capacity, or for such other purpose or reason
as may be approved by the Committee, Optionee shall not be deemed
during the period of such absence, by virtue of such absence alone,
to have terminated employment with the Company or an affiliate
except as the Committee may otherwise expressly provide.
(e) If Optionee's employment with the Company or an
affiliate terminates for cause during the Option Period, the Option
Period shall terminate on the date of such Optionee's termination
of employment and shall not thereafter be exercisable to any
extent.
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4. VESTING OF RIGHT TO EXERCISE OPTIONS. The shares covered
by this option shall vest in accordance with the following
schedule:
(a) As to 33.33% of the number of shares covered by the
option, at any time after one year from the Grant Date;
(b) As to the remaining 66.67% of the number of shares
covered by the option, 2.78% of the number of shares covered by the
option shall vest each month beginning 13 months from the Grant
Date. All the shares covered by the option shall have vested 36
months from the Grant Date.
Any portion of the option not exercised shall accumulate
and be exercisable at any time during the Option Period prior to
the Terminal Date. No partial exercise of this option may be for
less than five percent 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 or 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 option 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 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 (including Stock withheld
upon the exercise of an option to pay the purchase price of the
shares of Stock as to which the option is exercised), or a full-
recourse, interest-bearing note including such terms as the Board
determines appropriate. If accepted by the Committee in its
discretion, such consideration also may be paid through a broker-
dealer sale and remittance procedure pursuant to which Optionee
(i) shall provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sales of the purchased
shares and remit to the Company, out of the sale proceeds available
on the settlement date, sufficient funds to cover the aggregate
option price payable for the purchased shares plus all applicable
Federal and State income and employment taxes required to be
withheld by the Company in connection with such purchase and (ii)
shall provide written directives to the Company to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
Page 3 of 6
(b) If required by the Company, Optionee shall give the
Company satisfactory assurance in writing, signed by Optionee or
his 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 (i) 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
("the Securities Act"), and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (ii) 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.
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 Road,
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, the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), 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, his right to purchase
such undelivered 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 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 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 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.
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7. STOCK APPRECIATION RIGHTS. Optionee shall have the right
to surrender all or any part of this option and receive a payment
with respect to each share of Stock as to which this option is
surrendered equal to the difference between the per-share exercise
price of this option and the per-share fair market value of the
Stock on the date of such surrender, such payment to be in shares
of Stock valued at fair market value on the date of surrender or in
cash, or partly in such shares and partly in cash, as specified by
Optionee in this request; provided, however, that the Committee
shall have the sole discretion to consent to or disapprove the
election of Optionee to surrender all or a part of this option for
cash or a combination of Stock and cash.
8. LIMITATIONS ON TRANSFER. This option shall, during
Optionee's lifetime, be exercisable only by him, and neither this
option nor any right hereunder shall be transferable by Optionee by
operation of law or otherwise other than by will, the laws of
descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"), or Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
the rules thereunder, or otherwise as permitted by Rule 16b-3
("Rule 16b-3") of the Exchange Act. 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.
9. NO SHAREHOLDER RIGHTS. Neither Optionee nor any person
entitled to exercise Optionee's rights in the event of his death
shall have any of the rights of a shareholder 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.
10. NO EFFECT ON TERMS OF EMPLOYMENT. Notwithstanding any
prior express or implied agreement to the contrary, except for a
written employment agreement, the Company shall have the right to
terminate or change the terms of employment of Optionee at any time
and for any reason, with or without cause.
11. 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
Road, Irvine, California 92718, and any notice to be given to
Optionee shall be addressed to him at the address given by him
beneath his 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 or wrapper
addressed as aforesaid, registered or certified and deposited
(postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United
States.
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12. COMMITTEE DECISIONS CONCLUSIVE. All decisions of
the Committee which administers the Plan upon any question arising
under the Plan or under this Agreement shall be conclusive.
13. 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, the applicable laws of descent and
distribution, or pursuant to a qualified domestic relations order
as defined by the Internal Revenue Code, or Title I of ERISA, or
the rules thereunder, or otherwise as permitted by Rule 16b-3.
14. WITHHOLDING. Optionee will make appropriate
arrangements with the Company and his employer for satisfaction of
any applicable federal, state or local income tax withholding
requirements or social security requirements.
15. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
ADVANCED LOGIC RESEARCH, INC.
_______________________________________
Ronald J. Sipkovich,
Chief Financial Officer
_______________________________________
[FirstName] [LastName], Optionee
S.S #: [SS]
Address: [Address1]
[Address2]
[Address3]
[City], [State] [Zip]
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EXHIBIT "C"
THE PLAN AGREEMENTS
EXHIBIT "C"