EXHIBIT 99.4
Form of Non-Qualified Stock Option Agreement
ADVANCED LOGIC RESEARCH, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of _____________ 199__ (the "Grant
Date"), between ADVANCED LOGIC RESEARCH, INC., a _______________
corporation (the "Company"), and _____________________________
("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; and
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 _______________ (_______) 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.
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 (within the meaning of Section 105(d)(4) of
the Code), 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.
(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 of the Board of Directors which
administers the Plan (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 [25%] of the number of shares covered by
the option, at any time after one year from the Grant Date;
(b) As to an additional [25%] of the number of
shares covered by the option, at any time after two years from the
Grant Date;
(c) As to an additional [25%] of the number of
shares covered by the option, at any time after three years from
the Grant Date; and
(d) As to the remaining [25%] of the number of
shares covered by the option, at any time after four years 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, 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 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 (1) any
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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 1933, 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, 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
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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 subject to this option.
[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. (Note:
This paragraph can be expanded to include cash-out rights under
paragraph 11(b) of the Plan.)]
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 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.
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
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terms of employment of Optionee at any time and for any reason,
with or without cause.<F1>
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, 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.
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 or the applicable laws of descent and
distribution.
14. WITHHOLDING. Optionee agrees to 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.
<F1> This clause must be modified in cases where an existing
written employment agreement sets a higher standard for
termination.
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IN WITNESS WHEREOF, the Company has caused these presents to be
executed on its behalf by its President, and Optionee has
hereunto set his hand as of the day and year first above written.
ADVANCED LOGIC RESEARCH, INC.
By___________________________
_____________________________
___________________, Optionee
Address:_____________________
_____________________________
_____________________________
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