Exhibit 10.4
NEOWARE SYSTEMS, INC.
2004 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION AWARD AGREEMENT
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Neoware Systems, Inc. (the "Company") hereby grants to _____________
(the "Optionee") an option (the "Option") to purchase a total of _________
shares of the Company's Common Stock, at the price and on the terms set forth
herein, and in all respects subject to the terms and provisions of the Neoware
Systems, Inc. 2004 Equity Incentive Plan (the "Plan") applicable to Incentive
Stock Options, which terms and provisions are incorporated by reference herein.
Unless otherwise defined herein, capitalized terms used but not defined herein
shall have the meanings given to them in the Plan.
1. NATURE OF THE OPTION. The Option is intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
2. DATE OF GRANT. The Option is granted as of ________ __, 200_ (the
"Date of Grant").
3. TERM OF OPTION. The Option shall have a term of ten years from the
Date of Grant and shall terminate at 5:00 p.m. on __________ __, 200_ unless it
is terminated at an earlier date pursuant to the provisions of this Agreement or
the Plan.
4. OPTION EXERCISE PRICE. The Option exercise price is $____ per Share.
5. EXERCISE OF OPTION.
5.1 VESTING. Subject to Sections 6.7.4(b) and 12 of the Plan,
and except as the Committee or the Board may accelerate the vesting of the
Option in its sole discretion, the Option shall become vested and will become
exercisable during its term only in accordance with the terms and provisions of
the Plan and this Award Agreement, over a period of four years, with the Option
becoming exercisable with respect to 25% of the shares subject to the Option on
the first, second, third and fourth anniversaries, respectively, of the Date of
Grant, until the Option is exercisable with respect to 100% of the shares;
provided that, subject to Section 6.7.4(b) of the Plan, vesting shall cease upon
the Optionee's termination of employment or other Service.
5.2 RIGHT TO EXERCISE. Subject to the vesting provisions of
Section 5.1 above and the termination provisions of Section 6.7 of the Plan, the
Option may be exercised in whole or in part at any time and from time to time
during the term of the Option. Any portion of the Option that is not vested is
not exercisable. The unvested portion of the Option may not be exercised until
it becomes vested in accordance with Section 5.1.
5.3 METHOD OF EXERCISE. The Option shall be exercisable by
written notice from the Optionee to the Company setting forth the Optionee's
election to exercise the Option and the number of shares in respect of which the
Option is being exercised. Such notice shall be signed by the Optionee,
delivered to the Company in a manner consistent with Section 13.13 of the Plan,
and accompanied by payment of the exercise price. The Option will be deemed to
be exercised upon the receipt by the Company of such notice and payment of the
exercise price. The Optionee shall have no right to vote or receive dividends
and shall have no other rights as a stockholder with respect to the shares with
respect to which the Option is exercised, notwithstanding the exercise of the
Option, until the issuance by the Company (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing the shares that are being issued
upon exercise of the Option. The Company will issue (or cause to be issued) such
stock certificates promptly following the exercise of the Option. The
certificate or certificates for the shares as to which the Option shall be
exercised shall be registered in the name of the Optionee and shall contain any
legend as may be required under the Plan and/or applicable law.
5.4 RESTRICTIONS ON EXERCISE. The Option may not be exercised
if the issuance of the shares upon such exercise would constitute a violation of
any applicable federal or state securities laws or other laws or regulations. As
a condition to the exercise of the Option, the Company may require the Optionee
to make any representations and warranties to the Company as may be required by
the Plan or any applicable law or regulation.
6. NON-TRANSFERABILITY OF OPTION. The Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution. During the Optionee's lifetime, the Option is
exercisable only by the Optionee. Subject to the foregoing and the terms of the
Plan, the terms of the Option will be binding upon the executors, administrators
and heirs of the Optionee.
7. EARLY DISPOSITION OF STOCK. The Optionee hereby agrees that if the
Optionee disposes of any Shares received under the Option within one year after
such Shares are transferred to the Optionee or two years after the Date of
Grant, the Optionee will notify the Company in writing within 30 days after the
date of such disposition. The Optionee acknowledges that disposition of the
Shares within the later of (a) one year after such Shares are transferred to the
Optionee or (b) two years after the Date of Grant would disqualify the Option
from treatment as an Incentive Stock Option.
8 CONVERSION TO NON-QUALIFIED OPTION. Notwithstanding anything to the
contrary set forth herein, the Option is being granted subject to the condition
that, if any amendment or restatement of the Plan adopted prior to the Date of
Grant for which stockholder approval is required for purposes of Section 422 of
the Code is not approved by the stockholders of the Company within 365 days of
the date on which the amendment or the restatement, as applicable, is adopted by
the Board, then the Option shall automatically be converted into a non-qualified
stock option.
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9. WITHHOLDING. The Company reserves the right to withhold, in
accordance with any applicable laws, from any consideration payable to the
Optionee any taxes required to be withheld by federal, state or local law as a
result of the grant or exercise of the Option or the sale or other disposition
of the shares issued upon exercise of the Option. If the amount of any
consideration payable to the Optionee is insufficient to pay such taxes or if no
consideration is payable to the Optionee, then upon the request of the Company,
the Optionee (or such other person entitled to exercise the Option) shall pay to
the Company an amount sufficient for the Company to satisfy any federal, state
or local tax withholding requirements the Company may incur as a result of the
grant or exercise of the Option or the sale or other disposition of the shares
issued upon the exercise of the Option. Unless otherwise determined by the
Board, the minimum required withholding obligation arising in connection with
the exercise of the Option may be settled with shares, including shares that
would otherwise be payable to the Optionee in connection with the exercise of
the Option.
10. THE PLAN. This Award Agreement is subject to, and the Company and
the Optionee agree to be bound by, all of the terms and conditions of the Plan
as it may be amended from time to time in accordance with the terms thereof.
Pursuant to the Plan, the Board is authorized to adopt rules and regulations not
inconsistent with the Plan as it shall deem appropriate and proper. A copy of
the Plan in its present form is attached hereto and a copy will be available for
inspection during business hours by the Optionee or the persons entitled to
exercise the Option at the Company's principal office.
11. ENTIRE AGREEMENT. This Award Agreement, together with the Plan,
represents the entire agreement between the parties.
12. GOVERNING LAW. This Award Agreement shall be construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
any conflicts of laws.
13. AMENDMENT. Subject to the provisions of the Plan, this Award
Agreement may only be amended by a writing signed by the Company and the
Optionee.
IN WITNESS WHEREOF, this Award Agreement has been executed by
the parties on this [date].
NEOWARE SYSTEMS, INC.
By:
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Name:
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Title:
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CERTIFICATION AND ACKNOWLEDGMENT
OF STOCK OPTION GRANT
UNDER
NEOWARE SYSTEMS, INC. 2004 EQUITY PLAN
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The Optionee hereby acknowledges receipt of the Stock Option Award Agreement
dated [date] ("Agreement"), and the Neoware Systems, Inc. 2004 Equity Plan
("Plan"), a copy of which is attached to the Agreement, and certifies and
represents that he or she has read and is familiar with the terms and provisions
of the Agreement and Plan, and hereby accepts the Option subject to all of the
terms and provisions of the Plan and Agreement. The Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board or the Committee concerning the Plan.
Signature:
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Name:
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Date: ________________
Please return this certification to ___________ within 10 days of receipt.
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