Exhibit 10.2
1997 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
OF
DISCAS, INC.
1. Purpose of Plan.
The purpose of this Incentive and Non-Incentive Stock Option Plan
("Plan") is to further the growth and development of Discas, Inc. (the
"Company") and any subsidiaries thereof by encouraging selected employees,
directors and other persons who contribute and are expected to contribute
materially to the Company's success to obtain a proprietary interest in the
Company through the ownership of stock, thereby providing such persons with an
added incentive to promote the best interests of the Company and affording the
Company a means of attracting to its service persons of outstanding ability.
2. Stock Subject to the Plan.
An aggregate of 450,000 shares of the Company's Common Stock,
$.0001 par value ("Common Stock") subject, however, to adjustment or change
pursuant to paragraph 12 hereof, shall be reserved for issuance upon the
exercise of options which may be granted from time to time in accordance with
the Plan ("Options"). Such shares may be, in whole or in part, as the committee
appointed by the Board of Directors to administer the Plan (hereinafter, the
"Committee") shall from time to time determine, authorized but unissued shares
or issued shares which have been reacquired by the Company. If, for any reason,
an Option shall lapse, expire or terminate without having been exercised in
full, the unpurchased shares covered thereby shall again be available for
purposes of the Plan.
3. Administration.
(a) The Board of Directors shall appoint the Committee from among
its members. Such Committee shall be composed of two or more Directors who
shall be "non-employee directors" as defined by Regulation 240.16b-3 under the
Securities Exchange Act of 1934, as amended, and "outside directors" as defined
in regulations under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). Such Committee shall have and may exercise any and all of
the powers relating to the administration of the Plan and the grant of Options
thereunder as are set forth in subparagraph 3(b) hereof as the Board of
Directors shall
confer and delegate. The Board of Directors shall have power at any time to
fill vacancies in, to change the membership of, or to discharge such Committee.
The Committee shall select one of its members as its chairman and shall hold
its meetings at such time and at such places as it shall deem advisable. A
majority of such Committee shall constitute a quorum and such majority shall
determine its action. Any action may be taken without a meeting by written
consent of all the members of the Committee. The Committee shall keep minutes
of its proceedings and shall report the same to the Board of Directors at the
meeting next succeeding.
(b) The Committee shall administer the Plan and, subject to the
provisions of the Plan, shall have sole authority in its discretion to
determine the persons to whom, and the time or times at which, Options shall be
granted, the number of shares to be subject to each such Option, the provisions
regarding exercisability of each Option, the expiration date of each Option,
whether the Option shall contain a "cashless exercise" provision, whether all
or any portion of the Options shall be incentive stock options ("Incentive
Options") qualifying under Section 422A of the Code or stock options which do
not so qualify ("Non-Incentive Options") and, for Non-Incentive Options,
whether the Non-Incentive Option shall have limited transferability as
permitted under the Plan. Both Incentive Options and Non-Incentive Options may
be granted to the same person at the same time provided each type of Option is
clearly designated. In making such determinations, the Committee may take into
account the nature of the services rendered by such persons, their present and
potential contribution to the Company's success and such other factors as the
Committee in its sole discretion may deem relevant. Subject to the express
provisions of the Plan, the Committee shall also have authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating
thereto, to determine the terms and provisions of the respective Option
Agreements, which shall be substantially in the forms attached hereto as
Exhibit A and Exhibit B, to amend the provisions of outstanding Options to
provide for accelerated exercisability or the extension of the expiration date
of such Options, and to make all other determinations necessary or advisable
for the administration of the Plan, all of which determinations shall be
conclusive and not subject to review.
(c) The Board of Directors, in its discretion, may grant the
authority to the Company's President and Chief Executive Officer and/or its
Chief Financial Officer to grant, and determine the terms of, a limited number
of options under the Plan each year to employees or consultants of the Company
or its subsidiaries who are neither executive officers nor directors of the
Company. In addition, the Board of Directors may administer the Plan, in lieu
of and with the same powers as the Committee, with respect to any Options
granted or to be granted under the Plan, provided that such administration is
consistent with the provisions of Section 162(m) of the Code.
4. Eligibility for Receipt of Options.
(a) Incentive Options. Incentive Options may be granted only to
employees (including officers) of the Company and/or any of its subsidiaries. A
director of the Company or any subsidiary who is not an employee of the Company
or of one of its subsidiaries is not eligible
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to receive Incentive Options under the Plan. Further, Incentive Options may not
be granted to any person who, at the time the Incentive Option is granted, owns
(or is considered as owning within the meaning of Section 425(d) of the Code)
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary (10% Owner), unless at the
time the Incentive Option is granted to the 10% Owner, the option price is at
least 110% of the fair market value of the Common Stock subject thereto and
such Incentive Option by its terms is not exercisable subsequent to five years
from the date of grant.
(b) Non-Incentive Options. Non-Incentive Options may be granted to
any employees (including employees who have been granted Incentive Options),
directors, consultants, agents, independent contractors and other persons whom
the Board of Directors (or Committee) determines will contribute to the
Company's success.
5. Option Price.
The purchase price of the shares of Common Stock under each Option
shall be determined by the Committee, which determination shall be conclusive
and not subject to review, but in no event shall the purchase price be less
than 100% of the fair market value of the Common Stock on the date of grant in
the case of Incentive Options (110% of fair market value in the case of
Incentive Options granted to a 10% Owner) and 80% of the fair market value of
the Common Stock on the date of the grant in the case of Non Incentive Options.
For purposes of the Plan, unless the Committee determines
otherwise, the "fair market value" of a share of Common Stock as of a certain
date shall be the closing sale price of the Common Stock on The Nasdaq Stock
Market or, if the Common Stock is not then traded on The Nasdaq Stock Market,
such exchange as the Common Stock is then traded, on the trading date
immediately preceding the date fair market value is being determined. The
Committee may make such other determination of fair market value, based on
other factors, as it shall deem appropriate.
For purposes of the Plan, the date of grant of an Option shall be
the date on which the Committee shall by resolution duly authorize such Option.
6. Term of Options.
The term of each Option shall be such number of years as the
Committee shall determine, subject to earlier termination as herein provided,
but in no event more than ten years from the date such Option is granted (five
years for 10% Owners).
7. Exercise of Options.
(a) Each Option shall be exercisable to the extent determined by
the Committee, but in no event shall an Option be exercisable until at least
six months from the date of grant, and the aggregate fair market value
(determined as of the time an Option is granted) of the shares of
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the Company's Common Stock purchasable upon exercise of the Option by an
employee during any calendar year may not exceed $100,000.
(b) An Option may not be exercised for fractional shares of the
Company's Common Stock.
(c) Except as provided in paragraphs 9, 10 and 11 hereof, no Option
shall be exercisable unless the holder thereof shall have been an employee,
director, consultant, agent, independent contractor or other person employed by
or engaged in performing services for the Company and/or a subsidiary
continuously from the date of grant to the date of exercise.
(d) The exercise of an Option shall be contingent upon receipt from
the holder thereof of a written representation that at the time of such
exercise it is the optionee's then present intention to acquire the Option
shares for investment and not with a view to the distribution or resale thereof
(unless a Registration Statement covering the shares purchasable upon exercise
of the Options shall have been declared effective by the Securities and
Exchange Commission) and upon receipt by the Company of cash, or a check to its
order, for the full purchase price of such shares. The Committee may, in its
discretion, include a "cashless exercise" provision in the applicable Option
Agreement, in which event the optionee will be permitted (i) to deliver
previously owned shares of Common Stock with a fair market value equal to the
exercise price in payment of the full purchase price of such shares, or (ii) to
request that the Company withhold shares of Common Stock issuable upon exercise
of such Option with a fair market value equal to the exercise price of the
shares being purchased under the Option (thereby reducing the number of shares
issuable upon exercise of the Option).
(e) The holder of an Option shall have none of the rights of a
stockholder with respect to the shares purchasable upon exercise of the Option
until a certificate for such shares shall have been issued to the holder upon
due exercise of the Option.
(f) The proceeds received by the Company upon exercise of an Option
shall be added to the Company's working capital and be available for general
corporate purposes.
8. Transferability of Options.
No Option granted pursuant to the Plan shall be transferable
otherwise than by will or the laws of descent or distribution and an Option may
be exercised during the lifetime of the holder only by such holder, provided,
however, that the Committee may provide for transferability of a Non-Incentive
Option to an optionee's family members or family trusts.
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9. Termination of Employment or Engagement.
In the event the employment of the holder of an Option shall be
terminated by the Company or a subsidiary for any reason other than by reason
of death or disability, or the engagement of a non-employee holder of a
Non-Incentive Option shall be terminated by the Company or a subsidiary for any
reason, such holder may, within three months from the date of such termination,
exercise such Option to the extent such Option was exercisable by such holder
at the date of such termination. Notwithstanding the foregoing, no Option may
be exercised subsequent to the date of its expiration. Absence on leave
approved by the employer corporation shall not be considered an interruption of
employment for any purpose under the Plan. In addition, at the discretion of
the Committee, the exercisability of an outstanding Non-Incentive Option may be
extended to a date determined by the Committee but not beyond ten years from
the date of grant.
Nothing in the Plan or in any Option Agreement granted hereunder
shall confer upon any Optionholder any right to continue in the employ of the
Company or any subsidiary or obligate the Company or any subsidiary to continue
the engagement of any Optionholder or interfere in any way with the right of
the Company or any such subsidiary to terminate such Optionholder's employment
or engagement at any time.
10. Disability of Holder of Option.
If the employment of the holder of an Option shall be terminated by
reason of such holder's disability, such holder may, within twelve months from
the date of such termination, exercise such option to the extent such Option
was exercisable by such holder at the date of such termination. Notwithstanding
the foregoing, no Option may be exercised subsequent to the date of its
expiration.
11. Death of Holder of Option.
If the holder of any Option shall die while in the employ of, or
while performing services for, the Company or one or more of its subsidiaries
(or within six months following termination of employment due to disability),
the Option theretofore granted to such person may be exercised, but only to the
extent such Option was exercisable by the holder at the date of death (or, with
respect to employees, the date of termination of employment due to disability)
by the legatee or legatees of such person under such person's Last Will, or by
such person's personal representative or distributees, within twelve months
from the date of death but in no event subsequent to the expiration date of the
Option.
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12. Adjustments Upon Changes in Capitalization.
If at any time after the date of grant of an Option, the Company
shall by stock dividend, split-up, combination, reclassification or exchange,
or through merger or consolidation or otherwise, change its shares of Common
Stock into a different number or kind or class of shares or other securities or
property, then the number of shares covered by such Option and the price per
share thereof shall be proportionately adjusted for any such change by the
Committee whose determination thereon shall be conclusive.
13. Acceleration of Exercisability Upon Change in Control.
Upon the occurrence of a "change in control" of the Company (as
defined below), all outstanding Options shall become immediately fully
exercisable. For purposes of the Plan, a "change in control" of the Company
shall mean (i) the acquisition at any time by a "person" or "group" (as such
terms are used Sections 13(d) and 14(d)(2) of the Exchange Act of beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities representing 50% or more of the combined voting power
in the election of directors of the then outstanding securities of the Company
or any successor or the Company; (ii) the termination of service of directors,
for any reason other than death, disability or retirement from the Board of
Directors, during any period of two consecutive years or less, of individuals
who at the beginning of such period constituted a majority of the Board of
Directors, unless the election of or nomination for election of each new
director during such period was approved by a vote of at least two-thirds of
the directors still in office who were directors at the beginning of the
period; (iii) approval by the stockholders of the Company of any merger,
consolidation, or statutory share exchange as a result of which the Common
Stock shall be changed, converted or exchanged (other than a merger,
consolidation or share exchange with a wholly-owned Subsidiary) or liquidation
of the Company or any sale or disposition of 80% or more of the assets or
earning power or the Company; or (iv) approval by the stockholders of the
Company of any merger, consolidation, or statutory share exchange to which the
Company is a party as a result of which the persons who were stockholders
immediately prior to the effective date of the merger, consolidation or share
exchange shall have beneficial ownership of less than 50% of the combined
voting power in the election of directors of the surviving corporation;
provided, however, that no change in control shall be deemed to have occurred
if, prior to such time as a change in control would otherwise be deemed to have
occurred, the Company's Board of Directors deems otherwise.
14. Vesting of Rights Under Options.
Neither anything contained in the Plan nor in any resolution
adopted or to be adopted by the Committee, the Board of Directors or the
stockholders of the Company shall constitute the vesting of any rights under
any Option. The vesting of such rights shall take place only when a written
Option Agreement, substantially in the form of the Incentive Stock Option
Agreement attached hereto as Exhibit A or the Non-Incentive Stock Option
Agreement attached
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hereto as Exhibit B, shall be duly executed and delivered by and on behalf of
the Company and the person to whom the Option shall be granted.
15. Termination and Amendment.
The Plan, which was adopted by the Board of Directors on February
22, 1997 is subject to stockholder approval, and shall terminate on February
22, 2007 and no Option shall be granted under the Plan after such date. The
Board of Directors may at any time prior to such date terminate the Plan or
make such modifications or amendments thereto as it shall deem advisable,
provided, however, that shareholder approval shall be required:
i) to increase the number of shares reserved for issuance under the
Plan;
ii) to materially increase the benefits accruing to participants
under the Plan;
iii) to materially modify the requirements of eligibility for
participation in the Plan; or
iv) if otherwise required to comply with the incentive stock option
provisions of Section 162(m) of the Code or the listed company
requirements of The Nasdaq Stock Market or of a national
securities exchange on which the Common Stock is then traded,
and, provided, further, that no modification or amendment shall adversely
affect the rights of a holder of an Option previously granted under the Plan
without such holder's written consent.
16. Lock-Up.
To the extent requested by the managing underwriter in respect of a
proposed offering of securities of the Company, the holder of any securities,
or options to purchase securities, of the Company shall refrain from selling or
offering to sell any securities of the Company within the latter of two years
after the effective date of the registration statement covering such securities
of the Company and six months from issuance, or such lesser period as may be
requested by the managing underwriter.
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EXHIBIT A
DISCAS, INC.
INCENTIVE STOCK OPTION AGREEMENT
----------------------
To:
We are pleased to notify you that by the determination of the Stock
Option Committee (hereinafter the "Committee") an incentive stock option to
purchase ____ shares of the Common Stock of Discas, Inc. (herein called the
"Company") at a price of $ _____ per share has this ____ day of __________ been
granted to you under the Company's 1997 Incentive and Non-Incentive Stock
Option Plan (herein called the "Plan"). This option may be exercised only upon
the terms and conditions set forth below.
1. Purpose of Option.
The purpose of the Plan under which this incentive stock option has
been granted is to further the growth and development of the Company and its
subsidiaries by encouraging key employees, directors, consultants, agents,
independent contractors and other persons who contribute and are expected to
contribute materially to the Company's success to obtain a proprietary interest
in the Company through the ownership of stock, thereby providing such persons
with an added incentive to promote the best interests of the Company, and
affording the Company a means of attracting to its service persons of
outstanding ability.
2. Acceptance of Option Agreement.
Your execution of this incentive stock option agreement will indicate
your acceptance of and your willingness to be bound by its terms; it imposes no
obligation upon you to purchase any of the shares subject to this option. Your
obligation to purchase shares can arise only upon your exercise of the option
in the manner set forth in paragraph 4 hereof.
3. When Option May Be Exercised.
(a) The option granted you hereunder may not be exercised for a period
of six months from the date of its grant by the Committee as set forth above.
Thereafter, this option shall be exercisable as follows:
(i) at the end of one year from the date of grant, up to 25% of
the total shares subject to the option;
(ii) at the end of the second year from the date of grant, up to
50%;
(iii) at the end of the third year from the date of grant, up to
75%;
(iv) at the end of the fourth year from the date of grant, up to
100%.
This option may not be exercised for less than ten shares at any one time (or
the remaining shares then purchasable if less than ten) and expires at the end
of ten years from the date of grant whether or not it has been duly exercised
(hereinafter, the "Option Expiration Date"), unless sooner terminated as
provided in paragraphs 5, 6 or 7 hereof.
4. How Option May Be Exercised.
This option is exercisable by a written notice signed by you and
delivered to the Company at its executive offices, signifying your election to
exercise the option. The notice must state the number of shares of Common Stock
as to which your option is being exercised, must contain a statement by you (in
a form acceptable to the Company) that such shares are being acquired by you
for investment and not with a view to their distribution or resale (unless a
Registration Statement covering the shares purchasable has been declared
effective by the Securities and Exchange Commission) and must be accompanied by
cash or a check to the order of the Company for the full purchase price of the
shares being purchased, unless exercised pursuant to the following "cash
exercise" provision.
In lieu of paying for the shares purchasable under this option by cash
or check, you may (i) deliver previously owned shares of Common Stock with a
fair market value equal to the full purchase price of the shares being
purchased under this option, or (ii) request that the Company withhold shares
of Common Stock issuable upon exercise of this option with a fair market value
equal to the full purchase price of the shares being purchased under this
option (thereby reducing the number of shares issuable upon exercise of this
option). For purposes of this option, unless the Committee determines
otherwise, the "fair market value" of a share of Common Stock as of a certain
date shall be the closing sale price of the Common Stock on The Nasdaq Stock
Market or, if the Common Stock is not then traded on The Nasdaq Stock Market,
such exchange as the Common Stock is then traded, on the trading date
immediately preceding the date fair market value is being determined. The
Committee may make such other determination of fair market value, based on
other factors, as it shall deem appropriate.
2
If notice of the exercise of this option is given by a person or
persons other than you, the Company may require, as a condition to the exercise
of this option, the submission to the Company of appropriate proof of the right
of such person or persons to exercise this option.
Certificates for shares of the Common Stock so purchased will be
issued as soon as practicable. The Company, however, shall not be required to
issue or deliver a certificate for any shares until it has complied with all
requirements of the Securities Act of 1933, the Securities Exchange Act of
1934, any stock exchange on which the Company's Common Stock may then be listed
and all applicable state laws in connection with the issuance or sale of such
shares or the listing of such shares on said exchange. Until the issuance of
the certification for such shares, you or such other person as may be entitled
to exercise this option shall have none of the rights of a stockholder with
respect to shares subject to this option.
5. Termination of Employment.
If your employment with the Company (or a subsidiary thereof) is
terminated for any reason other than by death or disability, you may exercise,
within three months from the date of such termination, that portion of the
option which was exercisable by you at the date of such termination, provided,
however, that such exercise occurs no later than the Option Expiration Date.
6. Disability.
If your employment with the Company (or a subsidiary thereof) is
terminated by reason of your disability, you may exercise, within twelve months
from the date of such termination, that portion of this option which was
exercisable by you at the date of such termination, provided, however, that
such exercise occurs no later than the Option Expiration Date.
7. Death.
If you die while employed by the Company (or a subsidiary thereof) or
within six months after termination of your employment due to disability, that
portion of this option which was exercisable by you at the date of your death
may be exercised by your legatee or legatees under your Will, or by your
personal representatives or distributees, within twelve months from the date of
your death, but in no event after the Option Expiration Date.
8. Non-Transferability of Option.
This option shall not be transferable except by Will or the laws of
descent and distribution, and may be exercised during your lifetime only by
you.
9. Adjustments upon Changes in Capitalization.
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If at any time after the date of grant of this option, the Company
shall, by stock dividend, split-up, combination, reclassification or exchange,
or through merger or consolidation, or otherwise, change its shares of Common
Stock into a different number or kind or class of shares or other securities or
property, then the number of shares covered by this option and the price of
each such share shall be proportionately adjusted for any such change by the
Committee, whose determination shall be conclusive.
10. Acceleration of Exercisability Upon Change in Control.
Upon the occurrence of a "change in control" of the Company (as
defined below), this option shall become immediately fully exercisable. For
purposes of this option, a "change in control" of the Company shall mean (i)
the acquisition at any time by a "person" or "group" (as such terms are used
Sections 13(d) and 14(d)(2) of the Exchange Act of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities representing 50% or more of the combined voting power in the
election of directors of the then outstanding securities of the Company or any
successor or the Company; (ii) the termination of service of directors, for any
reason other than death, disability or retirement from the Board of Directors,
during any period of two consecutive years or less, of individuals who at the
beginning of such period constituted a majority of the Board of Directors,
unless the election of or nomination for election of each new director during
such period was approved by a vote of at least two-thirds of the directors
still in office who were directors at the beginning of the period; (iii)
approval by the stockholders of the Company of any merger, consolidation, or
statutory share exchange as a result of which the Common Stock shall be
changed, converted or exchanged (other than a merger, consolidation or share
exchange with a wholly-owned Subsidiary) or liquidation of the Company or any
sale or disposition of 80% or more of the assets or earning power or the
Company; or (iv) approval by the stockholders of the Company of any merger,
consolidation, or statutory share exchange to which the Company is a party as a
result of which the persons who were stockholders immediately prior to the
effective date of the merger, consolidation or share exchange shall have
beneficial ownership of less than 50% of the combined voting power in the
election of directors of the surviving corporation; provided, however, that no
change in control shall be deemed to have occurred if, prior to such time as a
change in control would otherwise be deemed to have occurred, the Company's
Board of Directors deems otherwise.
11. Lock-Up.
To the extent requested by the managing underwriter in respect of a
proposed offering of securities of the Company, you shall refrain from selling
or offering to sell any securities of the Company within the latter of two
years after the effective date of the registration statement covering such
securities of the Company and six months from issuance, or such lesser period
as may be so requested by the managing underwriter.
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12. Subject to Terms of the Plan.
This incentive stock option agreement shall be subject in all
respects to the terms and conditions of the Plan and in the event of any
question or controversy relating to the terms of the Plan, the decision of the
Committee shall be conclusive.
Sincerely yours,
DISCAS, INC.
By:
---------------------------
President
Agreed to and accepted this
____ day of __________ , .
- ----------------------------------
Signature of Optionee
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EXHIBIT B
DISCAS, INC.
NON-INCENTIVE STOCK OPTION AGREEMENT
----------------------
To:
We are pleased to notify you that by the determination of the Stock
Option Plan Committee (herein called the "Committee") a non-incentive stock
option to purchase ____ shares of the Common Stock of Discas, Inc. (herein
called the "Company") at a price of $ _____ per share has this day of ________
been granted to you under the Company's 1997 Incentive and Non-Incentive Stock
Option Plan (herein called the "Plan"). This option may be exercised only upon
the terms and conditions set forth below.
1. Purpose of Option.
The purpose of the Plan under which this non-incentive stock option
has been granted is to further the growth and development of the Company and
its subsidiaries by encouraging key employees, directors, consultants, agents,
independent contractors and other persons who contribute and are expected to
contribute materially to the Company's success to obtain a proprietary interest
in the Company through the ownership of stock, thereby providing such persons
with an added incentive to promote the best interests of the Company, and
affording the Company a means of attracting to its service persons of
outstanding ability.
2. Acceptance of Option Agreement.
Your execution of this non-incentive stock option agreement will
indicate your acceptance of and your willingness to be bound by its terms; it
imposes no obligation upon you to purchase any of the shares subject to this
option. Your obligation to purchase shares can arise only upon your exercise of
the option in the manner set forth in paragraph 4 hereof.
3. When Option May Be Exercised.
The option granted you hereunder may not be exercised for a period of
six months from the date of its grant by the Committee as set forth above.
Thereafter, this option shall be exercisable as follows:
(i) at the end of one year from the date of grant, up to 25% of
the total shares subject to the option;
(ii) at the end of the second year from the date of grant, up to
50%;
(iii) at the end of the third year from the date of grant, up to
75%;
(iv) at the end of the fourth year from the date of grant, up to
100%.
This option may not be exercised for less than ten shares at any one
time (or the remaining shares then purchasable if less than ten) and expires at
the end of five years from the date of grant whether or not it has been duly
exercised (hereinafter, the "Option Expiration Date"), unless sooner terminated
as provided in paragraphs 5, 6 or 7 hereof.
4. How Option May Be Exercised.
This option is exercisable by a written notice signed by you and
delivered to the Company at its executive offices, signifying your election to
exercise the option. The notice must state the number of shares of Common Stock
as to which your option is being exercised, must contain a statement by you (in
a form acceptable to the Company) that such shares are being acquired by you
for investment and not with a view to their distribution or resale (unless a
Registration Statement covering the shares purchased has been declared
effective by the Securities and Exchange Commission) and must be accompanied by
cash or a check to the order of the Company for the full purchase price of the
shares being purchased, plus such amount, if any, as is required for
withholding taxes. Notwithstanding the foregoing, this option may also be
exercised pursuant to the following "cashless exercise" provision.
Insert the following "cashless exercise" provision, if granted by the
Committee:] [In lieu of paying for the shares purchasable under this option by
cash or check, you may (i) deliver previously owned shares of Common Stock with
a fair market value equal to the full purchase price of the shares being
purchased under this option, or (ii) request that the Company withhold shares
of Common Stock issuable upon exercise of this option with a fair market value
equal to the full purchase price of the shares being purchased under this
option (thereby reducing the number of shares issuable upon exercise of this
option). For purposes of this option, unless the Committee determines
otherwise, the "fair market value" of a share of Common Stock as of a certain
date shall be the closing sale price of the Common Stock on The Nasdaq Stock
Market or, if the Common Stock is not then traded on The Nasdaq Stock Market,
such exchange as the Common Stock is then traded, on the trading date
immediately preceding the date fair market value is being determined. The
Committee may make such other determination of fair market value, based on
other factors, as it shall deem appropriate.
If notice of the exercise of this option is given by a person or
persons other than you, the Company may require, as a condition to the exercise
of this option, the submission to the Company of appropriate proof of the right
of such person or persons to exercise this option.
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Certificates for shares of the Common Stock so purchased will be
issued as soon as practicable. The Company, however, shall not be required to
issue or deliver a certificate for any shares until it has complied with all
requirements of the Securities Act of 1933, the Securities Exchange Act of
1934, any stock exchange on which the Company's Common Stock may then be listed
and all applicable state laws in connection with the issuance or sale of such
shares or the listing of such shares on said exchange. Until the issuance of
the certificate for such shares, you or such other person as may be entitled to
exercise this option shall have none of the rights of a stockholder with
respect to shares subject to this option.
5. Termination of Employment or Engagement.
If your employment with the Company (or a subsidiary thereof) is
terminated for any reason other than by death or disability, or if a you are
not an employee of the Company and your engagement by the Company (or a
subsidiary) is terminated for any reason, you may exercise, within three months
from the date of such termination, that portion of this option which was
exercisable by you at the date of such termination, provided, however, that
such exercise occurs prior to the Option Expiration Date.
6. Disability.
If your employment with the Company (or a subsidiary thereof) is
terminated by reason of your disability, you may exercise, within twelve months
from the date of such termination, that portion of this option which was
exercisable by you at the date of such termination, provided, however, that
such exercise occurs prior to the Option Expiration Date.
7. Death.
If you die while employed by the Company (or a subsidiary thereof) or
within six months after termination of your employment due to disability, that
portion of this option which was exercisable by you at the date of your death
may be exercised by your legatee or legatees under your Will, or by your
personal representatives or distributees, within twelve months from the date of
your death, but in no event after the Option Expiration Date.
8. Non-Transferability of Option.
This option shall not be transferable except by Will or the laws of
descent and distribution, and may be exercised during your lifetime only by
you.
9. Adjustments upon Changes in Capitalization.
If at any time after the date of grant of this option, the Company
shall, by stock dividend, split-up, combination, reclassification or exchange,
or through merger or consolidation, or otherwise, change its shares of Common
Stock into a different number or kind or class of shares
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or other securities or property, then the number of shares covered by this
option and the price of each such share shall be proportionately adjusted for
any such change by the Committee, whose determination shall be conclusive.
10. Acceleration of Exercisability Upon Change in Control.
Upon the occurrence of a "change in control" of the Company (as
defined below), this option shall become immediately fully exercisable. For
purposes of this option, a "change in control" of the Company shall mean (i)
the acquisition at any time by a "person" or "group" (as such terms are used
Sections 13(d) and 14(d)(2) of the Exchange Act of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities representing 50% or more of the combined voting power in the
election of directors of the then outstanding securities of the Company or any
successor or the Company; (ii) the termination of service of directors, for any
reason other than death, disability or retirement from the Board of Directors,
during any period of two consecutive years or less, of individuals who at the
beginning of such period constituted a majority of the Board of Directors,
unless the election of or nomination for election of each new director during
such period was approved by a vote of at least two-thirds of the directors
still in office who were directors at the beginning of the period; (iii)
approval by the stockholders of the Company of any merger, consolidation, or
statutory share exchange as a result of which the Common Stock shall be
changed, converted or exchanged (other than a merger, consolidation or share
exchange with a wholly-owned Subsidiary) or liquidation of the Company or any
sale or disposition of 80% or more of the assets or earning power or the
Company; or (iv) approval by the stockholders of the Company of any merger,
consolidation, or statutory share exchange to which the Company is a party as a
result of which the persons who were stockholders immediately prior to the
effective date of the merger, consolidation or share exchange shall have
beneficial ownership of less than 50% of the combined voting power in the
election of directors of the surviving corporation; provided, however, that no
change in control shall be deemed to have occurred if, prior to such time as a
change in control would otherwise be deemed to have occurred, the Company's
Board of Directors deems otherwise.
11. Lock-Up.
To the extent requested by the managing underwriter in respect of a
proposed offering of securities of the Company, you shall refrain from selling
or offering to sell any securities of the Company within the latter of two
years after the effective date of the registration statement covering such
securities of the Company and six months form issuance, or such lesser period
as may be so requested by the managing underwriter.
12. Subject to Terms of the Plan.
This non-incentive stock option agreement shall be subject in all
respects to the terms and conditions of the Plan and in the event of any
question or controversy relating to the terms of the Plan, the decision of the
Committee shall be conclusive.
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13. Tax Status.
This option does not qualify as an "incentive stock option" under
the provisions of Section 422A of the Internal Revenue Code of 1986, as
amended, and the income tax implications of your receipt of a non-incentive
stock option and your exercise of such an option should be discussed with your
tax counsel.
Sincerely yours,
DISCAS, INC.
By:
---------------------------
President
Agreed to and accepted this
____ day of __________ , 199 .
- ----------------------------------
Signature of Optionee
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