EXHIBIT 4.1
MANCHESTER EQUIPMENT CO., INC.
AMENDED AND RESTATED
1996 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
1. Purpose of Plan.
The purpose of this Amended and Restated 1996 Incentive and
Non-Incentive Stock Option Plan ("Plan") is to further the growth and
development of Manchester Equipment Co., Inc. ("Company") and any direct and
indirect subsidiaries thereof (collectively, "Subsidiaries" and each, singly, a
"Subsidiary") 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 this Plan.
An aggregate of 1,100,000 shares of the Company's Common Stock, par
value $.01 per share ("Common Stock"), subject, however, to adjustment or change
pursuant to Article 10 hereof, shall be reserved for issuance upon the exercise
of options which may be granted from time to time in accordance with this Plan
("Options"). Such shares may be, in whole or in part, 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 this Plan.
3. Administration.
(a) The Board of Directors of the Company shall have and may exercise
any and all of the powers relating to the administration of this
Plan and the grant of Options hereunder as are set forth herein.
(b) The Board shall administer this Plan and, subject to the
provisions of this 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 and whether all or any portion of
such Options shall be incentive stock options ("Incentive
Options") qualifying under Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"), or stock options which do not
so qualify ("Non-Incentive Options"). 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 Board may take into account the
nature of the services rendered by such persons, their present
and potential contributions to the Company's success and such
other factors as the Board in its sole discretion may deem
relevant. Subject to the express provisions of this Plan, the
Board shall also have the authority to interpret this 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, subject to the rights granted
to the Company and the Board hereunder, substantially in the
forms attached hereto as Exhibit A and Exhibit B, with such
changes thereto as may be necessary to reflect the terms and
conditions of the grant in question, and to make all other
determinations necessary or advisable for the administration of
this Plan, all of which determinations shall be conclusive and
not subject to review.
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.
The aggregate Fair Market Value (as defined in Article 5 of this
Plan), determined as of the time the Incentive Option is granted,
of the shares of the Company's Common Stock purchasable hereunder
exercisable for the first time by an employee during any calendar
year may not exceed $100,000.
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 to receive Incentive Options under this 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 424(d) of the Code) stock
possessing more than 10% of the total combined voting powers of
all classes of stock of the Company or any Subsidiary (a "10%
Owner"), unless at the time the Incentive Option is granted to a
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 determines will contribute to the Company's
success.
(c) Notwithstanding the forgoing, the maximum aggregate number of
shares with respect to which Options, whether Incentive or
Non-Incentive, may be granted to any person eligible therefor
under this Plan within any one calendar year is 200,000 shares.
5. Option Price.
The purchase price of the shares of Common Stock under each Option
shall be determined by the Board, which determination shall be conclusive and
not subject to review, but in no event shall such purchase price be less than
(i) 100% of the fair market value of the Common Stock on the date of grant of
Incentive Options (110% of the fair market value of Common Stock on the date of
grant where the grant of Incentive Options is made to a 10% Owner), and (ii) 85%
of the fair market value of the Common Stock on the date of grant for
Non-Incentive Options.
In determining the fair market value of the Common Stock as of a
specified date ("Fair Market Value"), the Board shall consider, if the Common
Stock is: (a) publicly traded and listed on the New York Stock Exchange or
another national securities exchange or The Nasdaq Stock Market, the closing
sale price of the Common Stock on the business day immediately preceding the
date as of which the Fair Market Value is being determined, or on the next
preceding date on which such Common Stock is traded if no Common Stock was
traded on such immediately preceding business day, or, if the Common Stock is
not so listed on a national securities exchange or The Nasdaq Stock Market, but
publicly traded, the representative closing sale price in the over-the-counter
market as quoted by the National Quotation Bureau or a recognized dealer in the
Common Stock, on the date immediately preceding the date as of which the Fair
Market Value is being determined, or on the next preceding date on which such
Common Stock is traded if no Common Stock was traded on such immediately
preceding business day; or (b) not publicly traded, the fair market value as
determined by the Board in good faith based on such factors as it shall deem
appropriate. The Board may also consider such other factors as it shall deem
appropriate.
For purposes of this Plan, the date of grant of an Option shall be the
date on which the Board shall by resolution duly authorize such Option.
6. Term of Options; Termination.
(a) The term of each Option shall be such number of years as the
Board shall determine, subject to earlier termination as provided
herein and in the Option Agreement (and each Incentive Option
being subject to the limitations set forth in Section 4(a) of
this Plan with respect to grants to 10% Owners), but in no event
shall the term of any Option be more than ten years from the date
of grant. No Option may be exercised following termination
thereof.
(b) If an Incentive Option holder's employment with the Company or a
Subsidiary is terminated for any reason other than by reason of
death or disability (within the meaning of Section 22(e)(3) of
the Code), such holder's Incentive Option shall terminate on the
earlier of (i) three (3) months from the date of such termination
of employment, or (ii) the expiration date of the term of such
Option. Absence on leave approved by the employer corporation
shall not be considered an interruption of employment for any
purpose under this Plan.
(c) If an Incentive Option holder's employment with the Company or a
Subsidiary is terminated by reason of such holder's disability
within the meaning of Section 22(e)(3) of the Code, subject to
paragraph 6(d) hereof, such holder's Incentive Option shall
terminate on the earlier of (i) one (1) year from the date of
such termination, or (ii) the expiration date of the term of such
Option.
(d) If an Incentive Option holder dies while in the employ of the
Company or a Subsidiary (or within one (1) year following
termination of employment due to disability within the meaning of
Section 22(e)(3) of the Code), such holder's Incentive Option
shall terminate on the earlier of (i) one (1) year from the date
of death, or (ii) the expiration date of the term of the Option.
To the extent such Incentive Option was exercisable by such
holder at the date of death (or the date of termination of
employment due to disability within the meaning of Section
22(e)(3) of the Code), such Option may be exercised by the
legatee or legatees of such person under such person's Last Will,
or by such person's personal representative or distributees,
within one (1) year from the date of death but in no event
subsequent to the expiration date of the Incentive Option.
7. Exercise of Options.
(a) Incentive and Non-Incentive Options shall be exercisable within
the times or upon the events determined by the Board as set forth
in the Option Agreements.
(b) An Option may not be exercised for fractional shares of the
Company's Common Stock.
(c) If an Option holder ceases to be an employee, director,
consultant, agent, independent contractor or other person
employed by or engaged in performing services for the Company
and/or a Subsidiary, the Option held by such person shall be
exercisable after the date of termination of employment or
engagement only to the extent such Option was exercisable by such
holder at the date of termination. In no event shall such option
be exercisable following the expiration of its term or earlier
termination.
(d) The exercise of an Option shall be contingent upon receipt by the
Company from the holder of such Option of a written
representation that at the time of such exercise it is the
Optionholder'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. In addition, the holder
of such Option must agree to refrain from selling or offering to
sell any securities of the Company for such reasonable period of
time after the effective date of any registration statement
relating to an underwritten offering of securities of the
Company, as may be requested by the managing underwriter of such
underwritten offering, and approved by the Board of Directors.
The Company shall be under no obligation to register the Shares
with the Securities and Exchange Commission or to effect
compliance with the Securities Act of 1933 or with the
registration or qualification requirement of any state securities
laws or stock exchange.
(e) Payment for the shares of Common Stock may be made (i) in cash or
by check to the order of the Company; (ii) by surrender of shares
of Common Stock having a Fair Market Value equal to the exercise
price of the Option; or (iii) by any combination of the foregoing
where approved by the Board in its sole discretion; provided,
however, in the event of payment for the shares of Common Stock
by method (ii) above, the shares of Common Stock so surrendered,
if originally issued to the Optionholder upon exercise of an
Option(s) granted by the Company, shall have been held by the
Optionholder for more than six months.
(f) The holder of an Option shall have none of the rights of a
shareholder 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.
(g) 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. Non-Transferability of Incentive Options.
No Incentive Option granted pursuant to this Plan shall be transferable
otherwise than by will or the laws of descent or distribution and an Incentive
Option may be exercised during the lifetime of the Option holder only by such
Option holder.
9. No Right of Employment.
Nothing in this Plan or in any Option Agreement granted hereunder
shall: (a) confer upon any Option holder 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 Option holder; or (b) interfere in any way with
the right of the Company or any such Subsidiary to terminate such Option
holder's employment or engagement at any time.
10. 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
Board, whose determination thereon shall be conclusive. In the event that a
fraction of a share results from the foregoing adjustment, said fraction shall
be eliminated and the price per share of the remaining shares subject to the
Option adjusted accordingly.
11. Vesting of Rights Under Options.
Nothing contained in this Plan or in any resolution adopted or to be
adopted by the Board or the shareholders 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 hereto as Exhibit B (with such
changes to such Exhibits as may be necessary to reflect the terms and conditions
of the grant in question), shall be duly executed and delivered by and on behalf
of the Company and the person to whom the Option shall be granted, subject,
however, in either event, to the rights granted to the Company and the Committee
hereunder and to the terms and conditions of the Option Agreement.
12. Withholding Taxes.
Whenever under this Plan shares are to be issued in satisfaction of the
exercise of Options granted hereunder, the Company shall have the right to
require the recipient to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such shares.
13. Restrictions on Shares.
At the discretion of the Board, the Company may reserve to itself or
its assignee(s) in the Option Agreement (a) a right of first refusal to purchase
any shares that an Optionholder (or a subsequent transferee) may propose to
transfer to a third party and (b) a right to repurchase any or all shares held
by an Optionholder upon the Optionee's termination of employment or service with
the Company or a subsidiary for any reason within a specified time as determined
by the Board at the time of grant at (i) the Optionholder's original purchase
price, (ii) the Fair Market Value of such shares as determined by the Board in
good faith, or (iii) a price determined by a provision set forth in the Option
Agreement.
14. Termination and Amendment.
The Board may at any time terminate, amend or modify this Plan in any
respect (including, but not limited to, any form of grant, agreement or
instrument to be executed pursuant to this Plan); provided, however, that
shareholder approval shall be required to be obtained by the Company if required
to comply with the Incentive Option provisions or 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 shares of Common Stock are traded, or other
applicable provisions of state or federal law or self-regulatory agencies;
provided, further, that no termination, amendment or modification of this Plan
may materially adversely affect the rights of a holder of an Option previously
granted under this Plan without the written consent of such Optionholder.
15. Term of Plan.
This Plan was originally adopted by the Board of Directors on October
1, 1996 and approved by the shareholders of the Company on October 1, 1996. No
Option shall be granted pursuant to this Plan on or after September 30 , 2006,
but Options theretofore granted may extend beyond that date and the terms of
this Plan shall continue to apply to such Options and to any shares of Common
Stock acquired upon exercise thereof.
16. Applicable Law.
The validity, interpretation and enforcement of this Plan shall be
governed in all respects by the laws of the State of New York and the United
States of America.
17. Issuance of Shares.
The Shares, when issued and paid for pursuant to the Options granted
hereunder, shall be fully paid and non-assessable Shares.
18. Partial Invalidity.
The invalidity or illegality of any provision herein shall not be
deemed to affect the validity of any other provision.
EXHIBIT A
---------
INCENTIVE STOCK OPTION AGREEMENT
---------------
To:
We are pleased to notify you that by the determination of the Board of
Directors (hereinafter called the "Board") an incentive stock option to purchase
________ shares of the Common Stock of Manchester Equipment Co., Inc. (herein
called the "Company") at a price of $______ per share has this ____ day of
_______________, been granted to you under the Company's Amended and Restated
1996 Incentive and Non-Incentive Stock Option Plan, as amended (herein called
the "Plan"). This option may be exercised only upon the terms and conditions set
forth below.
A. Purpose of Option.
The purpose of this Plan under which this incentive stock
option has been granted is to further the growth and development of the Company
and its direct and indirect 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.
1. 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 the option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in Article 3 hereof.
2. When Option May Be Exercised.
The option granted you hereunder may not be exercised for a period of [one
year] from the date of its grant by the Board 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%] of such shares;
(iii) at the end of the [third year] from the date of grant, up to
[75%] of such shares;
(iv) at the end of the [fourth year] from the date of grant, up to
[100%] of such shares.
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,
unless sooner terminated as provided in Articles 5, 6 and 7 hereof.
3. 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
payment as set forth in Article 4 hereof for the full purchase price of the
share being purchased. No share shall be issued until full payment therefor has
been made.
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
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 shareholder with
respect to shares subject to this option.
You shall promptly advise the Company of any sale of shares of Common Stock
issued upon exercise of this option which occurs within one (1) year from the
date of the exercise of this option relating to the issuance of such shares.
4. Payment of Options.
Payment for the shares of Common Stock may be made (i) in cash or by check
to the order of the Company; (ii) by surrender of shares of Common Stock having
a Fair Market Value equal to the exercise price of the Option; or (iii) by any
combination of the foregoing where approved by the Board in its sole discretion;
provided, however, in the event of payment for the shares of Common Stock by
method (ii) above, the shares of Common Stock so surrendered, if originally
issued to you upon exercise of an option(s) granted by the Company, shall have
been held by you for more than six months.
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, this option shall terminate
three (3) months from the date of such termination of employment (but in no
event shall you be able to exercise this option after ten years from the date
this option was granted to you), provided, however, you shall only be entitled
to exercise that portion of this option which was exercisable by you at the date
of such termination of employment.
6. Disability.
If your employment with the Company (or a subsidiary thereof) is terminated
by reason of your disability, you may exercise, within one (1) year 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 within ten years from the date this option was granted to you.
7. Death.
If you die while employed by the Company (or a subsidiary thereof) or
within one (1) year 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 Last Will, or by your
personal representatives or distributees, within one (1) year from the date of
your death, provided, however, that such exercise occurs within ten years from
the date this option was granted to you.
8. Non-Transferability of Option.
This option shall not be transferable except by Last 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 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 Board
whose determination shall be conclusive. Any fraction of a share resulting from
any adjustment shall be eliminated and the price per share of the remaining
shares subject to this options adjusted accordingly.
10. Subject to Terms of this Plan.
This incentive stock option agreement shall be subject in all respects to
the terms and conditions of this Plan and in the event of any question or
controversy relating to the terms of this Plan, the decision of the Board shall
be conclusive.
Sincerely yours,
MANCHESTER EQUIPMENT CO., INC.
By:
Barry R. Steinberg, President
Agreed to and accepted this
day of , 199 .
Signature of Optionholder
EXHIBIT B
---------
NON-INCENTIVE STOCK OPTION AGREEMENT
---------------
To:
We are pleased to notify you that by the determination of the
Board of Directors (hereinafter called the "Board") a non-incentive stock option
to purchase _______ shares of the Common Stock of Manchester Equipment Co., Inc.
(herein called the "Company") at a price of $_______ per share has this ___ day
of ______________, been granted to you under the Company's 1996 Amended and
Restated Incentive and Non-Incentive Stock Option Plan, as amended (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 this Plan under which this non-incentive stock option has
been granted is to further the growth and development of the Company and its
direct and indirect 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 the option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in Article 4 hereof.
3. When Option May Be Exercised.
The option granted you hereunder shall be exercisable as follows:
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 [indicate term of option, not to exceed ten years] years from the date of
grant whether or not it has been duly exercised, unless sooner terminated as
provided in Article 6 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
payment as set forth in Article 5 hereof for the full purchase price of the
shares being purchased, plus such amount, if any, as is required for withholding
taxes. No share shall be issued until full payment therefor has been made.
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
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 shareholder with
respect to shares subject to this option.
5. Payment of Options.
Payment for the shares of Common Stock may be made (i) in cash or by check
to the order of the Company, (ii) by surrender of shares of Common Stock having
a Fair Market Value equal to the exercise price of the Option; or (iii) by any
combination of the foregoing where approved by the Board in its sole discretion;
provided, however, in the event of payment for the shares of Common Stock by
method (ii) above, the shares of Common Stock so surrendered, if originally
issued to you upon exercise of an option(s) granted by the Company, shall have
been held by you for more than six months.
6. Termination of Employment or Engagement.
If your employment or engagement with the Company (or a subsidiary thereof)
is terminated for any reason, [insert terms upon which non-incentive option
holder's options shall lapse and expire.] [Insert terms upon which non-incentive
options shall survive the termination of a holder's employment or engagement,
but in such event the option shall be exercisable only to the extent exercisable
on the date of such termination and in no event shall the option be exercisable
after the expiration date of this option.] [If the option survives the death of
the option holder, add language that it may be exercised by the holder's legatee
or legatees under his Last Will, or by his personal representatives or
distributees.]
7. 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 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 Board
whose determination shall be conclusive. Any fraction of a share resulting from
any adjustment shall be eliminated and the price per share of the remaining
shares subject to this option adjusted accordingly.
8. Subject to Terms of this Plan.
This non-incentive stock option agreement shall be subject in all respects
to the terms and conditions of this Plan and in the event of any question or
controversy relating to the terms of this Plan, the decision of the Board shall
be conclusive.
9. Tax Status.
This option does not qualify as an "incentive stock option" under the
provisions of Section 422 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,
MANCHESTER EQUIPMENT CO., INC.
By:
Barry R. Steinberg, President
Agreed to and accepted this
day of , 199 .
Signature of Optionholder