EXHIBIT 10.1
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PARAMETRIC TECHNOLOGY CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
1. PURPOSE
The purpose of the Parametric Technology Corporation 1997 Incentive
Stock Option Plan (the "Plan") is to attract and retain key employees and
consultants of the Company and its Affiliates, to provide an incentive for them
to achieve long-range performance goals, and to enable them to participate in
the long-term growth of the Company.
2. DEFINITIONS
"Affiliate" means any business entity in which the Company owns
directly or indirectly 50% or more of the total voting power or has a
significant financial interest as determined by the Committee.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor law.
"Committee" means one or more committees each comprised of not less
than two members of the Board appointed by the Board to administer the Plan or a
specified portion thereof. If a Committee is authorized to grant Options to a
Reporting Person or a "covered employee" within the meaning of Section 162(m) of
the Code, each member shall be a "Non- Employee Director" or the equivalent
within the meaning of Rule 16b-3 under the Exchange Act or an "outside director"
or the equivalent within the meaning of Section 162(m) of the Code,
respectively.
"Common Stock" or "Stock" means the Common Stock, $.01 par value, of
the Company.
"Company" means Parametric Technology Corporation.
"Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Committee, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, "Designated
Beneficiary" means the Participant's estate.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor law.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Committee
in good faith or in the manner established by the Committee from time to time.
"Incentive Stock Option" - See Section 6(a).
"Nonstatutory Stock Option" - See Section 6(a).
"Option" - Unless the context otherwise requires, an Incentive Stock
Option or a Nonstatutory Stock Option.
"Participant" means a person selected by the Committee to receive an
Option under the Plan.
"Reporting Person" means a person subject to Section 16 of the
Exchange Act.
3. ADMINISTRATION
The Plan shall be administered by the Committee, provided that the
Board may in any instance perform any of the functions of the Committee. The
Committee shall have authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing the operation of the Plan as it shall
from time to time consider advisable, and to interpret the provisions of the
Plan. The Committee's decisions shall be final and binding. To the extent
permitted by applicable law, the Committee may delegate to one or more executive
officers of the Company the power to grant Options to Participants who are not
Reporting Persons or covered employees and all determinations under the Plan
with respect thereto, provided that the Committee shall fix the maximum amount
of such Options for all such Participants and a maximum for any one Participant.
4. ELIGIBILITY
All employees and, in the case of Nonstatutory Stock Options,
consultants of the Company or any Affiliate, capable of contributing
significantly to the successful performance of the Company, other than a person
who has irrevocably elected not to be eligible, are eligible to be Participants
in the Plan. Incentive Stock Options may be granted only to persons eligible to
receive such Options under the Code.
5. STOCK AVAILABLE FOR OPTIONS
(a) AMOUNT. Subject to adjustment under subsection (b), Options may be
granted under the Plan for up to 6,000,000 shares of Common Stock. If any Option
expires or is terminated unexercised or is forfeited or settled in a manner that
results in fewer shares outstanding than were granted, the shares subject to
such Option, to the extent of such expiration, termination, forfeiture or
decrease, shall again be available for grant under the Plan. Common Stock issued
through the assumption or substitution of outstanding grants from an acquired
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company shall not reduce the shares available for grant under the Plan. Shares
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(b) ADJUSTMENT. In the event of any stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, or other transaction affecting the
Common Stock, then (subject in the case of Incentive Stock Options to any
limitation required under the Code) (i) the number and kind of shares in respect
of which Options may be granted under the Plan, (ii) the number and kind of
shares subject to outstanding Options, and (iii) the exercise price with respect
to any of the foregoing shall be proportionately adjusted to the extent required
equitably to preserve the benefits available hereunder, provided that the number
of shares subject to any Option shall always be a whole number, and if
considered appropriate, the Committee may make provision for a cash payment with
respect to an outstanding Option.
(c) LIMIT ON INDIVIDUAL GRANTS. The maximum number of shares of Common
Stock subject to Options that may be granted to any Participant in the aggregate
in any calendar year shall not exceed 1,000,000 shares, subject to adjustment
under subsection (b) above.
6. STOCK OPTIONS
(a) GRANT OF OPTIONS. Subject to the provisions of the Plan, the
Committee may grant Options to purchase shares of Common Stock (i) complying
with the requirements of Section 422 of the Code or any successor provision and
any regulations thereunder ("Incentive Stock Options") and (ii) not intended to
comply with such requirements ("Nonstatutory Stock Options"). The Committee
shall determine the number of shares subject to each Option and the exercise
price therefor, which shall not be less than 100% of the Fair Market Value of
the Common Stock on the date of grant. No Incentive Stock Option may be granted
hereunder more than ten years after the effective date of the Plan.
(b) TERMS AND CONDITIONS. Each Option shall have a term no longer than
ten years from the date of grant and shall be exercisable at the time(s) and
subject to the terms and conditions set forth in the respective form of option
certificate included in Appendix I hereto or as the Committee may otherwise
specify in the applicable grant or thereafter. The Committee may impose such
conditions with respect to the exercise of Options, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.
(c) PAYMENT. No shares shall be delivered pursuant to any exercise of
an Option until payment in full of the exercise price therefor is received by
the Company. Such payment may be made in whole or in part in cash or, to the
extent permitted by the Committee at or after the grant of the Option, by
delivery of a note or shares of Common Stock owned by the Participant or by
retaining shares otherwise issuable pursuant to the Option, in each case valued
at their Fair Market Value on the date of delivery or retention, or such other
lawful consideration, including a payment commitment of a financial or brokerage
institution, as the Committee may determine.
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7. TERMINATION OF EMPLOYMENT OR ENGAGEMENT
If the Optionholder's status as an employee or consultant of (a) the
Company, (b) an Affiliate, or (c) a corporation (or parent or subsidiary
corporation of such corporation) issuing or assuming a stock option in a
transaction to which section 424(a) of the Code applies, is terminated for any
reason (voluntary or involuntary) and the period of exercisability for a
particular Option following such termination has not been specified by the
Board, each such Option then held by that Participant shall expire to the extent
not previously exercised ten (10) calendar days after such Participant's
employment or engagement is terminated, except that -
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(a) If the Participant is on military, sick leave or other bona
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fide leave of absence (such as temporary employment by the federal government),
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his or her employment or engagement with the Company will be treated as
continuing intact if the period of such leave does not exceed ninety (90) days,
or, if longer, so long as the Participant's right to reemployment or the
survival of his or her service arrangement with the Company is guaranteed either
by statute or by contract; otherwise, the Participant's employment or engagement
will be deemed to have terminated on the 91st day of such leave.
(b) If the Participant's employment is terminated by reason of
his or her retirement from the Company at normal retirement age, each Option
then held by the Participant, to the extent exercisable at retirement, may be
exercised by the Participant at any time within three (3) months after such
retirement unless terminated earlier by its terms.
(c) If the Participant's employment or engagement is terminated
by reason of his or her death, each Option then held by the Participant, to the
extent exercisable at the date of death, may be exercised at any time within one
year after that date (unless terminated earlier by its terms) by the person(s)
to whom the Participant's option rights pass by will or by the applicable laws
of descent and distribution.
(d) If the Participant's employment or engagement is terminated
by reason of his or her becoming permanently and totally disabled, each Option
then held by the Participant, to the extent exercisable upon the occurrence of
permanent and total disability, may be exercised by the Participant at any time
within one (1) year after such occurrence unless terminated earlier by its
terms. For purposes hereof, an individual shall be deemed to be "permanently and
totally disabled" if he or she 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 twelve (12) months. Any
determination of permanent and total disability shall be made in good faith by
the Company on the basis of a report signed by a qualified physician.
8. GENERAL PROVISIONS APPLICABLE TO OPTIONS
(a) LIMITATIONS ON TRANSFERABILITY. Options shall not be transferable
by the recipient other than by will or the laws of descent and distribution
and are exercisable during such person's lifetime only by such person or by
such person's guardian or legal representative; provided that the Committee
may in its discretion waive such restriction in any case.
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(b) DOCUMENTATION. Each Option under the Plan shall be evidenced by a
written stock option certificate delivered to the Participant specifying the
terms and conditions thereof and containing such other terms and conditions
not inconsistent with the provisions of the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or to comply with
applicable tax and regulatory laws and accounting principles.
(c) COMMITTEE DISCRETION. Options may be granted alone, in addition to
or in relation to any other Option. The terms of each Option need not be
identical, and the Committee need not treat Participants uniformly. Except as
otherwise provided by the Plan or a particular Option, any determination with
respect to an Option may be made by the Committee at the time of grant or at any
time thereafter.
(d) DIVIDENDS AND CASH OPTIONS. In the discretion of the Committee,
any Option under the Plan may provide the Participant with (i) dividends or
dividend equivalents payable (in cash or in the form of Options under the Plan)
currently or deferred with or without interest, and (ii) cash payments in lieu
of or in addition to an Option.
(e) CHANGE IN CONTROL. In order to preserve a Participant's rights
under an Option in the event of a change in control (as defined by the
Committee) of the Company, the Committee in its discretion may, at the time an
Option is granted or at any time thereafter, take one or more of the following
actions: (i) provide for the acceleration of any time period relating to the
exercise of the Option, (ii) provide for payment to the Participant of cash or
other property with a Fair Market Value equal to the value that would have been
received upon the exercise of the Option had the Option been exercised upon the
change in control, (iii) adjust the terms of the Option in a manner determined
by the Committee to reflect the change in control, (iv) cause the Option to be
assumed, or new rights substituted therefor, by another entity, or (v) make such
other provision as the Committee may consider equitable to Participants and in
the best interests of the Company.
(f) LOANS. The Committee may authorize the making of loans or cash
payments to Participants in connection with the grant or exercise of any Option
under the Plan, which loans may be secured by any security, including Common
Stock, underlying such Option (provided that the loan shall not exceed the Fair
Market Value of the security subject to such Option), and which may be forgiven
upon such terms and conditions as the Committee may establish at the time of
such loan or at any time thereafter.
(g) WITHHOLDING TAXES. The Participant shall pay to the Company, or
make provision satisfactory to the Committee for payment of, any taxes required
by law to be withheld in respect of Options under the Plan no later than the
date of the event creating the tax liability. The Company and its Affiliates
may, to the extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the Participant. In the Committee's
discretion, the Participant may pay any taxes due with respect to an Option in
whole or in part in shares of Common Stock, including shares retained from the
Option creating the tax obligation, valued at their Fair Market Value on the
date of retention or delivery.
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(h) FOREIGN NATIONALS. Options may be granted to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Committee
considers necessary or advisable to achieve the purposes of the Plan or to
comply with applicable laws.
(i) AMENDMENT OF OPTION. The Committee may amend, modify or terminate
any outstanding Option in any respect, including converting an Incentive Stock
Option to a Nonstatutory Stock Option, provided that the Participant's consent
to such action shall be required unless the Committee determines that the
action, taking into account any related action, would not materially and
adversely affect the Participant. The Committee shall not, without further
approval of the stockholders of the Company, authorize the amendment of any
outstanding option to reduce the option price. Furthermore, no option shall be
canceled and replaced with options having a lower option price or base price
without approval of the stockholders of the Company.
9. MISCELLANEOUS
(a) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right to
be granted an Option. Each employee of the Company or any of its Affiliates is
an employee-at-will (that is to say that either the Participant or the Company
or any Affiliate may terminate the employment relationship at any time for any
reason or no reason at all) unless, and only to the extent, provided in a
written employment agreement for a specified term executed by the chief
executive officer of the Company or his duly authorized designee or the
authorized signatory of any Affiliate. Neither the adoption, maintenance, nor
operation of the Plan nor any Option hereunder shall confer upon any employee of
the Company or of any Affiliate any right with respect to the continuance of
his/her employment by the Company or any such Affiliate nor shall they interfere
with the right of the Company (or Affiliate) to terminate any employee at any
time or otherwise change the terms of employment, including, without limitation,
the right to promote, demote or otherwise re-assign any employee from one
position to another within the Company or any Affiliate.
(b) EFFECT OF GRANT. Participant shall not earn any Options granted
hereunder until such time as all the conditions put forth herein which are
required to be met in order to exercise the Option have been fully satisfied.
(c) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Option, no Participant or Designated Beneficiary shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed under the Plan until he or she becomes the holder thereof.
(d) EFFECTIVE DATE. Subject to the approval of the stockholders of the
Company, the Plan shall be effective on the date of its approval by the Board.
(e) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, subject to any stockholder approval
that the Board determines to be necessary or advisable.
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(f) GOVERNING LAW. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of Massachusetts.
(g) COMPLETE AGREEMENT The Plan constitutes the complete understanding
of the parties regarding the subject matter hereof and supersedes all prior
contemporaneous agreements of the parties, whether written or oral. This Plan
may be amended, altered, or modified only by a writing, specifying such
amendment, alteration or modification, signed by both parties.
_______________________________________
Adopted at the November 14, 1996 Board of Directors Meeting.
Approved at the 1997 Annual Meeting of Stockholders.
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APPENDIX I
No. __________ _________ Shares
PARAMETRIC TECHNOLOGY CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
Incentive Stock Option Certificate
Parametric Technology Corporation (the "Company"), a Massachusetts
corporation, hereby grants to the person named below an option to purchase
shares of Common Stock, $0.01 par value, of the Company (the "Option") under
and subject to the Company's 1997 Incentive Stock Option Plan (the "Plan")
exercisable on the following terms and conditions set forth below and those
attached hereto and in the Plan:
Name of Optionholder: ____________________________
Address: ____________________________
____________________________
Social Security No. ____________________________
Number of Shares: __________________
Option Price: __________________
Date of Grant: __________________
Exercisability Schedule: After , 19 , as to ______ shares,
after , 19 , as to ______ additional shares,
after , 19 , as to ______ additional shares,
after , 19 , as to ______ additional shares,
after , 19 , as to ______ additional shares.
Expiration Date: __________________
This Option is intended to be treated as an Incentive Stock Option under
section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
By acceptance of this Option, the Optionholder agrees to the terms and
conditions set forth above and those attached hereto and in the Plan.
OPTIONHOLDER PARAMETRIC TECHNOLOGY CORPORATION
By:___________________________ By: ____________________________
PARAMETRIC TECHNOLOGY CORPORATION 1997 INCENTIVE STOCK OPTION PLAN
INCENTIVE STOCK OPTION TERMS AND CONDITIONS
1. Plan Incorporated by Reference. This Option is issued pursuant to
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the terms of the Plan and may be amended as provided in the Plan. Capitalized
terms used and not otherwise defined in this certificate have the meanings given
to them in the Plan. This certificate does not set forth all of the terms and
conditions of the Plan, which are incorporated herein by reference. The
Committee administers the Plan and its determinations regarding the operation of
the Plan are final and binding. Copies of the Plan may be obtained upon written
request without charge from the Corporate Counsel of the Company.
2. Option Price. The price to be paid for each share of Common Stock
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issued upon exercise of the whole or any part of this Option is the Option Price
set forth on the face of this certificate.
3. Exercisability Schedule. This Option may be exercised at any time
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and from time to time for the number of shares and in accordance with the
exercisability schedule set forth on the face of this certificate, but only for
the purchase of whole shares. This Option may not be exercised as to any shares
after the Expiration Date.
4. Method of Exercise. To exercise this Option, the Optionholder shall
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deliver written notice of exercise to the Company specifying the number of
shares with respect to which the Option is being exercised accompanied by
payment of the Option Price for such shares in cash, by certified check or in
such other form, including shares of Common Stock of the Company valued at their
Fair Market Value on the date of delivery or a payment commitment of a financial
or brokerage institution, as the Committee may approve. Promptly following such
notice, the Company will deliver to the Optionholder a certificate representing
the number of shares with respect to which the Option is being exercised.
5. No Right To Employment. No person shall have any claim or right to be
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granted an Option. Each employee of the Company or any of its Affiliates is an
employee-at-will (that is to say that either the Participant or the Company or
any Affiliate may terminate the employment relationship at any time for any
reason or no reason at all) unless, and only to the extent, provided in a
written employment agreement for a specified term executed by the chief
executive officer of the Company or his duly authorized designee or the
authorized signatory of any Affiliate. Neither the adoption, maintenance, nor
operation of the Plan nor any Option hereunder shall confer upon any employee of
the Company or of any Affiliate any right with respect to the continuance of
his/her employment by the Company or any such Affiliate nor shall they interfere
with the right of the Company (or Affiliate) to terminate any employee at any
time or otherwise change the terms of employment, including, without limitation,
the right to promote, demote or otherwise re-assign any employee from one
position to another within the Company or any Affiliate.
6. Effect of Grant. Participant shall not earn any Options granted
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hereunder until such time as all the conditions put forth herein and in the Plan
which are required to be met in order to exercise the Option have been fully
satisfied.
7. Recapitalization, Mergers, Etc. As provided in the Plan, in the event
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of corporate transactions affecting the Company's outstanding Common Stock, the
Committee shall equitably adjust the number and kind of shares subject to this
Option and the exercise price hereunder or make provision for a cash payment.
If such transaction involves a consolidation or merger of the Company with
another entity, the sale or exchange of all or substantially all of the assets
of the Company or a reorganization or liquidation of the Company, then in lieu
of the foregoing, the Committee may upon written notice to the Optionholder
provide that this Option shall terminate on a date not less than 20 days after
the date of such notice unless theretofore exercised. In connection with such
notice, the Committee may in its discretion accelerate or waive any deferred
exercise period.
8. Option Not Transferable. This Option is not transferable by the
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Optionholder otherwise than by will or the laws of descent and distribution, and
is exercisable, during the Optionholder's lifetime, only by the Optionholder.
The naming of a Designated Beneficiary does not constitute a transfer.
9. Termination of Employment or Engagement. If the Optionholder's status
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as an employee or consultant of (a) the Company, (b) an Affiliate, or (c) a
corporation (or parent or subsidiary corporation of such corporation) issuing or
assuming a stock option in a transaction to which section 424(a) of the Code
applies, is terminated for any reason (voluntary or
involuntary) and the period of exercisability for a particular Option following
such termination has not been specified by the Board, each such Option then held
by that Participant shall expire to the extent not previously exercised ten (10)
calendar days after such Participant's employment or engagement is terminated,
except that -
- ------ ----
(a) If the Participant is on military, sick leave or other bona fide leave of
---- ----
absence (such as temporary employment by the federal government), his or her
employment or engagement with the Company will be treated as continuing intact
if the period of such leave does not exceed ninety (90) days, or, if longer, so
long as the Participant's right to reemployment or the survival of his or her
service arrangement with the Company is guaranteed either by statute or by
contract; otherwise, the Participant's employment or engagement will be deemed
to have terminated on the 91st day of such leave.
(b) If the Participant's employment is terminated by reason of his or her
retirement from the Company at normal retirement age, each Option then held by
the Participant, to the extent exercisable at retirement, may be exercised by
the Participant at any time within three (3) months after such retirement unless
terminated earlier by its terms.
(c) If the Participant's employment or engagement is terminated by reason of his
or her death, each Option then held by the Participant, to the extent
exercisable at the date of death, may be exercised at any time within one year
after that date (unless terminated earlier by its terms) by the person(s) to
whom the Participant's option rights pass by will or by the applicable laws of
descent and distribution.
(d) If the Participant's employment or engagement is terminated by reason of his
or her becoming permanently and totally disabled, each Option then held by the
Participant, to the extent exercisable upon the occurrence of permanent and
total disability, may be exercised by the Participant at any time within one (1)
year after such occurrence unless terminated earlier by its terms. For purposes
hereof, an individual shall be deemed to be "permanently and totally disabled"
if he or she 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 twelve (12) months. Any determination of
permanent and total disability shall be made in good faith by the Company on the
basis of a report signed by a qualified physician.
10. Compliance with Securities Laws. It shall be a condition to the
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Optionholder's right to purchase shares of Common Stock hereunder that the
Company may, in its discretion, require (a) that the shares of Common Stock
reserved for issuance upon the exercise of this Option shall have been duly
listed, upon official notice of issuance, upon any national securities exchange
or automated quotation system on which the Company's Common Stock may then be
listed or quoted, (b) that either (i) a registration statement under the
Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in
the opinion of counsel for the Company, the proposed purchase shall be exempt
from registration under that Act and the Optionholder shall have made such
undertakings and agreements with the Company as the Company may reasonably
require, and (c) that such other steps, if any, as counsel for the Company shall
consider necessary to comply with any law applicable to the issue of such shares
by the Company shall have been taken by the Company or the Optionholder, or
both. The certificates representing the shares purchased under this Option may
contain such legends as counsel for the Company shall consider necessary to
comply with any applicable law.
11. Payment of Taxes. The Optionholder shall pay to the Company, or make
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provision satisfactory to the Company for payment of, any taxes required by law
to be withheld with respect to the exercise of this Option. The Committee may,
in its discretion, require any other Federal or state taxes imposed on the sale
of the shares to be paid by the Optionholder. In the Committee's discretion,
such tax obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the exercise of this Option, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to the Optionholder.
12. Notice of Sale of Shares Required. The Optionholder agrees to notify
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the Company in writing within 30 days of the disposition of any shares purchased
upon exercise of this Option if such disposition occurs within two years of the
date of the grant of this Option or within one year after such purchase.
Adopted November 14, 1996
No._________ _________ Shares
PARAMETRIC TECHNOLOGY CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
Nonstatutory Stock Option Certificate
Parametric Technology Corporation (the "Company"), a Massachusetts
corporation, hereby grants to the person named below an option to purchase
shares of Common Stock, $0.01 par value, of the Company (the "Option") under and
subject to the Company's 1997 Incentive Stock Option Plan (the "Plan")
exercisable on the following terms and conditions set forth below and those
attached hereto and in the Plan:
Name of Optionholder: ____________________________
Address: ____________________________
____________________________
Social Security No. ____________________________
Number of Shares: __________________
Option Price: __________________
Date of Grant: __________________
Exercisability Schedule: After , 19 , as to ______ shares,
after , 19 , as to ______ additional shares,
after , 19 , as to ______ additional shares,
after , 19 , as to ______ additional shares,
after , 19 , as to ______ additional shares.
Expiration Date: __________________
This Option shall not be treated as an Incentive Stock Option under
section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
By acceptance of this Option, the Optionholder agrees to the terms and
conditions set forth above and those attached hereto and in the Plan.
OPTIONHOLDER PARAMETRIC TECHNOLOGY CORPORATION
By: ____________________________ By: ____________________________
PARAMETRIC TECHNOLOGY CORPORATION 1997 INCENTIVE STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION TERMS AND CONDITIONS
1. Plan Incorporated by Reference. This Option is issued pursuant to the
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terms of the Plan and may be amended as provided in the Plan. Capitalized terms
used and not otherwise defined in this certificate have the meanings given to
them in the Plan. This certificate does not set forth all of the terms and
conditions of the Plan, which are incorporated herein by reference. The
Committee administers the Plan and its determinations regarding the operation of
the Plan are final and binding. Copies of the Plan may be obtained upon written
request without charge from the Corporate Counsel of the Company.
2. Option Price. The price to be paid for each share of Common Stock
------------
issued upon exercise of the whole or any part of this Option is the Option Price
set forth on the face of this certificate.
3. Exercisability Schedule. This Option may be exercised at any time and
-----------------------
from time to time for the number of shares and in accordance with the
exercisability schedule set forth on the face of this certificate, but only for
the purchase of whole shares. This Option may not be exercised as to any shares
after the Expiration Date.
4. Method of Exercise. To exercise this Option, the Optionholder shall
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deliver written notice of exercise to the Company specifying the number of
shares with respect to which the Option is being exercised accompanied by
payment of the Option Price for such shares in cash, by certified check or in
such other form, including shares of Common Stock of the Company valued at their
Fair Market Value on the date of delivery or a payment commitment of a financial
or brokerage institution, as the Committee may approve. Promptly following such
notice, the Company will deliver to the Optionholder a certificate representing
the number of shares with respect to which the Option is being exercised.
5. No Right To Employment. No person shall have any claim or right to be
----------------------
granted an Option. Each employee of the Company or any of its Affiliates is an
employee-at-will (that is to say that either the Participant or the Company or
any Affiliate may terminate the employment relationship at any time for any
reason or no reason at all) unless, and only to the extent, provided in a
written employment agreement for a specified term executed by the chief
executive officer of the Company or his duly authorized designee or the
authorized signatory of any Affiliate. Neither the adoption, maintenance, nor
operation of the Plan nor any Option hereunder shall confer upon any employee of
the Company or of any Affiliate any right with respect to the continuance of
his/her employment by the Company or any such Affiliate nor shall they interfere
with the right of the Company (or Affiliate) to terminate any employee at any
time or otherwise change the terms of employment, including, without limitation,
the right to promote, demote or otherwise re-assign any employee from one
position to another within the Company or any Affiliate.
6. Effect of Grant. Participant shall not earn any Options granted
----------------
hereunder until such time as all the conditions put forth herein and in the Plan
which are required to be met in order to exercise the Option have been fully
satisfied.
7. Recapitalization, Mergers, Etc. As provided in the Plan, in the event
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of corporate transactions affecting the Company's outstanding Common Stock, the
number and kind of shares subject to this Option and the exercise price
hereunder shall be equitably adjusted. If such transaction involves a
consolidation or merger of the Company with another entity, the sale or exchange
of all or substantially all of the assets of the Company or a reorganization or
liquidation of the Company, then in lieu of the foregoing, the Committee may
upon written notice to the Optionholder provide that this Option shall terminate
on a date not less than 20 days after the date of such notice unless theretofore
exercised. In connection with such notice, the Committee may in its discretion
accelerate or waive any deferred exercise period.
8. Option Not Transferable. This Option is not transferable by the
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Optionholder otherwise than by will or the laws of descent and distribution, and
is exercisable, during the Optionholder's lifetime, only by the Optionholder.
The naming of a Designated Beneficiary does not constitute a transfer.
9. Termination of Employment or Engagement. If the Optionholder's status
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as an employee or consultant of (a) the Company, (b) an Affiliate, or (c) a
corporation (or parent or subsidiary corporation of such corporation) issuing or
assuming a stock option in a transaction to which section 424(a) of the Code
applies, is terminated for any reason (voluntary or involuntary) and the period
of exercisability for a particular Option following such termination has not
been specified by the Board, each such Option then held by that Participant
shall expire to the extent not previously exercised ten (10) calendar days after
such Participant's employment or engagement is terminated, except that -
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(a) If the Participant is on military, sick leave or other bona fide
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leave of absence (such as temporary employment by the federal government), his
or her employment or engagement with the Company will be treated as continuing
intact if the period of such leave does not exceed ninety (90) days, or, if
longer, so long as the Participant's right to reemployment or the survival of
his or her service arrangement with the Company is guaranteed either by statute
or by contract; otherwise, the Participant's employment or engagement will be
deemed to have terminated on the 91st day of such leave.
(b) If the Participant's employment is terminated by reason of his or her
retirement from the Company at normal retirement age, each Option then held by
the Participant, to the extent exercisable at retirement, may be exercised by
the Participant at any time within three (3) months after such retirement unless
terminated earlier by its terms.
(c) If the Participant's employment or engagement is terminated by reason
of his or her death, each Option then held by the Participant, to the extent
exercisable at the date of death, may be exercised at any time within one year
after that date (unless terminated earlier by its terms) by the person(s) to
whom the Participant's option rights pass by will or by the applicable laws of
descent and distribution.
(d) If the Participant's employment or engagement is terminated by reason
of his or her becoming permanently and totally disabled, each Option then held
by the Participant, to the extent exercisable upon the occurrence of permanent
and total disability, may be exercised by the Participant at any time within one
(1) year after such occurrence unless terminated earlier by its terms. For
purposes hereof, an individual shall be deemed to be "permanently and totally
disabled" if he or she 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 twelve (12) months. Any determination
of permanent and total disability shall be made in good faith by the Company on
the basis of a report signed by a qualified physician.
10. Compliance with Securities Laws. It shall be a condition to the
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Optionholder's right to purchase shares of Common Stock hereunder that the
Company may, in its discretion, require (a) that the shares of Common Stock
reserved for issuance upon the exercise of this Option shall have been duly
listed, upon official notice of issuance, upon any national securities exchange
or automated quotation system on which the Company's Common Stock may then be
listed or quoted, (b) that either (i) a registration statement under the
Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in
the opinion of counsel for the Company, the proposed purchase shall be exempt
from registration under that Act and the Optionholder shall have made such
undertakings and agreements with the Company as the Company may reasonably
require, and (c) that such other steps, if any, as counsel for the Company shall
consider necessary to comply with any law applicable to the issue of such shares
by the Company shall have been taken by the Company or the Optionholder, or
both. The certificates representing the shares purchased under this Option may
contain such legends as counsel for the Company shall consider necessary to
comply with any applicable law.
11. Payment of Taxes. The Optionholder shall pay to the Company, or make
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provision satisfactory to the Company for payment of, any taxes required by law
to be withheld with respect to the exercise of this Option. The Committee may,
in its discretion, require any other Federal or state taxes imposed on the sale
of the shares to be paid by the Optionholder. In the Committee's discretion,
such tax obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the exercise of this Option, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to the Optionholder.
Adopted November 14, 1996