EXHIBIT 99.5
Form of Non-Employee Director Automatic Stock Option Agreement
AUTOMATIC OPTION GRANT
ONCOR, INC.
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NON-STATUTORY STOCK OPTION AGREEMENT
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AGREEMENT made this _____ day of__________________,
199__ by and between Oncor, Inc., a corporation organized and
existing under the laws of the State of Maryland (the "Company"),
and ____________________________ (the "Optionee").
WITNESSETH:
RECITALS
A. The Company's Board of Directors (the "Board") has
adopted the Company's 1992 Stock Option Plan (the "Plan") for the
purpose of attracting and retaining the services of employees,
consultants and non-employee Board members who contribute to the
management, growth and financial success of the Company or its
parent or subsidiary corporations.
B. Optionee is a non-employee Board member who is
entitled to receive an option to acquire shares of the Company's
common stock (the "Common Stock") pursuant to the automatic
option grant program implemented for non-employee Board members
under the Plan. This Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection
with the automatic option grant made to such Optionee thereunder.
C. The granted option is intended to be a
non-statutory stock option which does not satisfy the requirements
of Section 422 of the Internal Revenue Code.
D. For purposes of this Agreement, the following
definitions shall be in effect:
Board Member: The Optionee shall be deemed to be a Board
Member for so long as such individual continues to serve as a
member of the Company's Board of Directors.
Fair Market Value: The Fair Market Value per share of
Common Stock on any date in question shall be determined in
accordance with the following provisions:
(i) If the Common Stock is not at the time listed
or admitted to trading on any stock exchange but is traded on the
over-the-counter market, the fair market value shall be the mean
between the highest bid and lowest asked prices (or, if such
information is available, the closing selling price) per share of
Common Stock on the date in question on the over-the-counter
market, as such prices are reported by the National Association
of Securities Dealers through its NASDAQ system or any successor
system. If there are no reported bid and asked prices (or closing
selling price) on the date in question, then the mean between the
highest bid price and lowest asked price (or the closing selling
price) on the last preceding date for which such quotations exist
shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market
value shall be the closing selling price per share of Common
Stock on the date in question on the stock exchange serving as
the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market value
shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.
TERMS
1. GRANT OF OPTION. Pursuant to the provisions of
Article Three of the Plan, there is hereby automatically granted
to Optionee, on , 199 (the "Grant Date"), a stock option to
purchase up to 50,000 shares of Common Stock (the "Option
Shares") upon the terms and conditions set forth in this
Agreement and in the Plan (including Article Three thereof). The
Option Shares shall be purchasable in accordance with such terms
and conditions at the purchase price of $ _______ per share (the
"Option Price").
2. OPTION TERM. This option shall have a maximum term
of five (5) years measured from the Grant Date and shall
accordingly expire at the close of business on _______, 199__
(the "Expiration Date"), unless sooner terminated in accordance
with Paragraph 5 or 7A of this Agreement.
3. LIMITED TRANSFERABILITY. This option shall not be
transferable or assignable by Optionee other than by will or by
the laws of inheritance following the Optionee's death.
Accordingly, this option may be exercised, during Optionee's
lifetime, only by Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this option, and
any levy of execution, attachment or similar process on this
option, shall be null and void.
2.
4. EXERCISABILITY. This option shall become
exercisable in four (4) installments as follows:
(i) The option shall become exercisable for
twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of six (6) months of continuous service as
a Board Member measured from the Grant Date.
(ii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon
the Optionee's completion of eighteen (18) months of continuous
service as a Board Member measured from the Grant Date.
(iii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon
the Optionee's completion of thirty (30) months of continuous
service as a Board Member measured from the Grant Date.
(iv) The option shall become exercisable for the
remaining twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of forty-two (42) months of continuous
service as a Board Member measured from the Grant Date.
Once this option becomes exercisable for one or more
installments of the Option Shares, those installments shall
accumulate, and this option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or Paragraph 7A
of this Agreement.
5. CESSATION OF BOARD MEMBERSHIP. Should the
Optionee's service as a Board Member cease while this option
remains outstanding, then the option term specified in Paragraph
2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date in accordance with the following
provisions:
(i) Should the Optionee cease service as a Board
Member for any reason (other than death) while holding this
option, then the period for exercising this option shall be
reduced to the twelve (12)-month period commencing with the date
of such cessation of service. During such limited period of
exercisability, this option may not be exercised for more than
the number of Option Shares (if any) for which it is exercisable
on the date the Optionee ceased service as a Board Member. Upon
the expiration of such twelve (12)-month period, the option shall
terminate and cease to be exercisable.
3.
(ii) Should the Optionee die while serving as a
Board Member, then the personal representative of the Optionee's
estate (or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with
the laws of inheritance) shall have the right to exercise this
option for any or all of the Option Shares for which this option
is exercisable on the date the Optionee ceased service as a Board
Member. Such right shall lapse, and this option shall cease to be
exercisable, upon the expiration of the twelve (12)-month period
measured from the date of Optionee's death.
(iii) In no event may this option be exercised at
any time after the specified Expiration Date.
6. ADJUSTMENT IN OPTION SHARES. In the event any
change is made to the Company's outstanding Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without receipt
of consideration by the Company, appropriate adjustments shall
automatically be made to the class and/or number of securities
subject to this option and the Option Price payable per share in
order to reflect such transaction or change and thereby preclude
the dilution or enlargement of benefits hereunder.
7. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE
TAKE-OVER.
A. In the event of any of the following stockholder-
approved transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the
Company's incorporation,
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company in liquidation or
dissolution of the Company, or
(iii) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to holders
different from those who held such securities immediately prior
to such merger,
this option (if outstanding at the time) shall
automatically accelerate so that such option shall, immediately
prior to the specified effective date for the Corporate
4.
Transaction, become fully exercisable for all of the Option
Shares and may be exercised for all or any portion of such
shares. Upon the consummation of the Corporate Transaction, this
option shall terminate and cease to be outstanding.
B. Should there occur any Change in Control of the
Company, then this option (if outstanding at the time) shall
automatically accelerate so that such option shall, immediately
prior to the specified effective date for the Change in Control,
become fully exercisable for all the Option Shares and may be
exercised for all or any portion of such shares at any time prior
to the Expiration Date or sooner termination of the option term
under Paragraph 5 or Paragraph 7A of this Agreement. For purposes
of this Agreement, a Change in Control shall be deemed to occur
in the event:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of securities possessing more than forty
percent (40%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer
which the Board does not recommend the Company's stockholders to
accept; or
(ii) there is a change in the composition of the
Board over a period of twenty-four (24) consecutive months or
less such that a majority of the Board members (rounded up to the
next whole number) cease, by reason of one or more proxy contests
for the election of Board members, to be comprised of individuals
who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least
two-thirds of the Board members described in clause (A) who were
still in office at the time such election or nomination was
approved by the Board.
C. Should a Hostile Take-Over of the Company occur at
any time after this option has been outstanding for a period of
at least six (6) months measured from the Grant Date, then this
option (if outstanding at the time) shall automatically be
cancelled upon the effective date of such Hostile Take-Over, and
the Optionee shall, in exchange, receive a cash distribution from
the Company. Such distribution shall be in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock
at the time subject to this option (whether or not the option is
at the time otherwise exercisable for such shares) over (ii) the
aggregate Option Price payable for such shares. The cash
distribution shall be made to the Optionee within five (5) days
following the effective date of the Hostile Take-Over, and
neither the approval of the Plan Administrator nor the consent of
the Board shall be required in connection with such cancellation
and distribution. For purposes of this Paragraph 7C, the
following definitional provisions shall be in effect:
5.
A Hostile Take-Over shall be deemed to occur in the
event (i) any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than forty percent (40%)
of the total combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer which the Board
does not recommend the Company's stockholders to accept and (ii)
more than fifty percent (50%) of the securities so acquired in
such tender or exchange offer are accepted from holders other
than officers and directors of the Company who participate in
this Plan.
The Take-Over Price per share shall be deemed to be
equal to the greater of (a) the Fair Market Value per share of
Common Stock on the date of cancellation or (b) the highest
reported price per share paid in effecting the Hostile Take-Over.
D. This Agreement shall not in any way affect the
right of the Company to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
8. PRIVILEGE OF STOCK OWNERSHIP. Optionee shall not
have any stockholder rights with respect to the Option Shares
until such individual shall have exercised the option, paid the
Option Price for the purchased shares and been issued a stock
certificate for such shares.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option for one or more
Option Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, the
Optionee's executor, administrator, heir or legatee, as the case
may be) must take the following actions:
(i) Execute and deliver to the Secretary of the
Company a written notice of exercise (the "Exercise Notice"), in
substantially the form of Exhibit I attached hereto, in which
there is specified the number of Option Shares for which the
option is exercised.
(ii) Pay the aggregate Option Price for the
purchased shares in one or more of the following alternative
forms:
6.
- full payment in cash or check made payable to
the Company's order;
- full payment in shares of Common Stock held
by the Optionee for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date;
- full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date and cash or
check payable to the Company's order; or
- full payment through a broker-dealer sale
and remittance procedure pursuant to which the Optionee (I) shall
provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale 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 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.
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date
shall be the date on which the Exercise Notice shall have been
delivered to the Company. Except to the extent the sale and
remittance procedure specified above may be utilized to exercise
this option, payment of the Option Price for the purchased shares
must accompany such notice.
C. As soon as practical after the exercise of this
option in accordance with the provisions of this Agreement, the
Company shall mail or deliver to Optionee (or to the other person
or persons exercising this option) a stock certificate
representing the purchased shares.
D. In no event may this option be exercised for any
fractional shares.
10. LEGALITY OF ISSUANCE. The Company shall not be
obligated to sell or issue any Option Shares pursuant to this
Agreement if such sale or issuance might, in the
7.
opinion of the Company and the Company's counsel, constitute a
violation by the Company of any applicable law or regulation.
11. BINDING EFFECT. Subject to the limitations set
forth in Paragraph 3 of this Agreement, this Agreement shall be
binding upon, and shall inure to the benefit of, (i) the
executors, administrators, heirs, legal representatives and
assigns of the Optionee and (ii) the successors and assigns of
the Company.
12. NO IMPAIRMENT OF RIGHTS. Nothing in this Agreement
or in the Plan shall be deemed to impair or otherwise restrict the
rights of the Company or the stockholders to remove the Optionee
from the Board at any time pursuant to the provisions of applicable
law.
13. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Maryland
applicable to contracts entered into and wholly to be performed
within the State of Maryland by residents of such State.
14. NOTICES. All notices and other communications
under this Agreement shall be in writing. Unless and until the
Optionee is notified in writing to the contrary, all notices,
communications and documents directed to the Company and related
to this Agreement, if not delivered by hand, shall be mailed,
addressed as follows:
Oncor, Inc.
209 Perry Parkway
Gaithersburg, Maryland 20877
Unless and until the Company is notified in
writing to the contrary, all notices, communications and
documents intended for the Optionee and related to this
Agreement, if not delivered by hand, shall be mailed to
Optionee's last known address as shown on the Company's books.
Notices and communications shall be mailed by
first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All
mailings and deliveries related to this Agreement shall be deemed
received only when actually received, unless properly mailed by
registered mail, return receipt requested, in which event they
shall be deemed received two days after the date of mailing.
15. CONSTRUCTION. This Agreement and the option
evidenced hereby are issued pursuant to the automatic grant
program for non-employee Board members in effect under Article
Three of the Plan and shall be subject to the express terms and
provisions of the Plan applicable to such automatic grants. Such
terms and provisions are hereby incorporated into this Agreement
and made a part hereof as if expressly included in this
Agreement.
8.
16. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option shall
not become exercisable in whole or in part, whether in accordance
with the normal exercise provisions of Paragraph 4 or the special
acceleration provisions of Paragraphs 7A and 7B, nor shall this
option be eligible for cancellation pursuant to the cash-out
distribution provisions of Paragraph 7C, unless and until the
Plan, including the automatic option grant program pursuant to
which this option grant has been issued, is approved by the
Company's stockholders. If such stockholder approval is not
obtained prior to ____________________________________, 1992,
then this option shall terminate and cease to be outstanding,
without ever becoming exercisable for any of the Option Shares.
Should any Corporate Transaction, Change in Control or Hostile
Take-Over be effected prior to stockholder approval of the Plan,
then this option shall terminate upon the effective date of such
event and shall not be eligible either for acceleration under
Paragraphs 7A or 7B or for cash-out under Paragraph 7C.
IN WITNESS WHEREOF, Oncor, Inc. has caused this
Agreement to be executed on its behalf by its duly-authorized
officer and the Optionee has executed this Agreement, all on the
day and year first above written.
ONCOR, INC.
By ___________________________
Title _______________________
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OPTIONEE
Address ______________________
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9.
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Oncor, Inc. (the "Company") that I
elect to purchase ________ shares of the Company's Common Stock
(the "Purchased Shares") pursuant to that certain option (the
"Option") granted to me on ________________, 199___ to purchase
up to 50,000 shares of such Common Stock at an option price of
$____________ per share (the "Option Price").
Concurrently with the delivery of this Exercise Notice
to the Secretary of the Company, I shall pay to the Company the
Option Price for the Purchased Shares in accordance with the
provisions of my agreement with the Company evidencing the Option
and shall deliver whatever additional documents may be required
by such agreement as a condition for exercise.
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Date Optionee
Address: _________________________
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Print name in exact manner it is to appear on the
stock certificate:
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Address to which certificate is to be sent, if
different from address above:
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Social Security Number: _________________________