THIS DOCUMENT IS A CONFIRMING ELECTRONIC COPY OF THE FORM S-8 REGISTRATION
STATEMENT FILED IN PAPER ON DECEMBER 28, 1995.
As filed with the Securities and Exchange Commission on December 28, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
ONCOR, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 52-1310084
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
209 PERRY PARKWAY
GAITHERSBURG, MARYLAND 20877
(Address of principal executive offices) (Zip Code)
1992 STOCK OPTION PLAN
(Full title of the Plan)
JOHN L. COKER
VICE PRESIDENT, FINANCE AND ADMINISTRATION,
CHIEF FINANCIAL OFFICER, SECRETARY AND TREASURER
ONCOR, INC.
209 PERRY PARKWAY
GAITHERSBURG, MARYLAND 20877
(Name and address of agent for service)
(301) 963-3500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
<S> <C> <C> <C> <C>
Options to Purchase Common Stock 500,000 N/A N/A N/A
Common Stock, $0.01 par value 500,000 shares $4.83438 $2,421,900 $835.15
<FN>
(1) This Registration Statement shall also cover any
additional shares of Common Stock which become issuable
under the 1992 Stock Option Plan by reason of any stock
dividend, stock split, recapitalization or other similar
transaction effected without the receipt of
consideration which results in an increase in the number
of the outstanding shares of Common Stock of Oncor, Inc.
(2) Calculated solely for purposes of this offering under
Rule 457(h) of the Securities Act of 1933, as amended,
on the basis of the average of the high and low selling
prices per share of Common Stock of Oncor, Inc. on
December 19, 1995, as reported on the Nasdaq National
Market.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Oncor, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following
documents previously filed with the Securities and Exchange
Commission (the "SEC"):
a) The Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1994, filed with the SEC
on March 31, 1995;
b) The Registrant's Quarterly Reports on
Form 10-Q for the fiscal quarters
ended March 31, 1995, June 30, 1995
and September 30, 1995, filed with the
SEC on May 15, 1995, August 14, 1995
and November 14, 1995 respectively;
and
c) The Registrant's Registration No.
00-16177 on Form 8-A filed with the
SEC on August 31, 1987 pursuant to
Section 12 of the Securities Exchange
Act of 1934, as amended (the "1934
Act"), in which there is described the
terms, rights and provisions
applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information
statements filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the 1934 Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in
any subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Article 11 of the Registrant's Articles of
Incorporation, as amended, and Section 5.01 of the Registrant's
Bylaws, as amended, provide that the Registrant shall, to the
full extent permitted by law, indemnify all Registrant's
directors, officers, employees, or agents. Section 2-418 of the
Maryland General Corporation Law (the "Section") permits
indemnification of directors, officers, employees and agents of a
corporation under certain conditions and subject to certain
limitations. The Section provides generally that such persons may
be indemnified unless they engage in a material act or omission
in bad faith or that is the result of active and deliberate
dishonesty; they actually receive an improper personal benefit in
money, property or services; or, in the case of a criminal
proceeding, they have reasonable cause to believe that the act or
omission is unlawful. Provision is made for reimbursement of
reasonable expenses so long as it is finally determined that the
standards of conduct have been met.
II-3
<PAGE>
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit Number Exhibit
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference is made to the Registrant's
Registration Statement No. 00-16177 on Form 8-A which is incorporated herein by
reference pursuant to Item 3(c) of this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Accountants - Arthur Andersen LLP.
23.2 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 1992 Stock Option Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Notice of Grant of Non-Employee Director Automatic Stock Option.
99.5 Form of Non-Employee Director Automatic Stock Option Agreement.
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby
undertakes: (1) to file, during any period in which
offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "1933 Act") (ii) to reflect in the prospectus any
facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
this Registration Statement and (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any
material change to such information in this Registration
Statement; provided, however, that clauses (1)(i) and (1)(ii)
shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the 1934 Act that are incorporated by
reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof and (3) to remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the
termination of the Registrant's 1992 Stock Option Plan.
B. The undersigned Registrant hereby
undertakes that, for purposes of determining any
liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE>
C. Insofar as indemnification for
liabilities arising under the 1933 Act may be permitted
to directors, officers or controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the 1933
Act, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the Registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8, and has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of
Gaithersburg, State of Maryland, on this 26th day of December,
1995.
ONCOR, INC.
By: /s/ Stephen Turner
Stephen Turner
Chairman of the Board of Directors
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of
Oncor, Inc., a Maryland corporation, do hereby constitute and
appoint Stephen Turner and John L. Coker, and each of them, the
lawful attorneys-in-fact and agents with full power and authority
to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and either one of
them, determine may be necessary or advisable or required to
enable said corporation to comply with the Securities Act of
1933, as amended, and any rules or regulations or requirements of
the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and
each of the undersigned hereby ratifies and confirms that all
said attorneys and agents, or either one of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be
signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has
executed this Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this Registration Statement has been
signed below by the following persons in the capacities and on
the dates indicated.
Signature Title Date
/s/ Stephen Turner Chairman of the Board of Directors December 26, 1995
- ---------------------- and Chief Executive Officer
Stephen Turner
II-4
<PAGE>
(Principal Executive Officer)
Signature Title Date
/s/ John L. Coker Vice President - Finance and December 26, 1995
- ---------------------- Administration, Secretary,
John L. Coker Treasurer and Chief Financial
Officer (Principal Financial and
Accounting Officer)
/s/ Philip S. Schein, M.D. Director December 26, 1995
- -----------------------------------
Philip S. Schein, M.D.
/s/ Timothy J. Triche, M.D., Ph.D. Director December 26, 1995
- -----------------------------------
Timothy J. Triche, M.D., Ph.D.
/s/ William H. Taylor II, Ph.D. Director December 26, 1995
- -----------------------------------
William H. Taylor II, Ph.D.
/s/ George W. Scherer Director December 26, 1995
- -----------------------------------
George W. Scherer
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
ONCOR, INC.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially Numbered
Number Exhibit
Page
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference is made to
the Registrant's Registration Statement No. 00-16177 on Form 8-A which
is incorporated herein by reference pursuant to Item 3(c) of this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Accountants - Arthur Andersen LLP.
23.2 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 1992 Stock Option Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Notice of Grant of Non-Employee Director Automatic Stock Option.
99.5 Form of Non-Employee Director Automatic Stock Option Agreement.
</TABLE>
<PAGE>
EXHIBIT 4
Instruments Defining the Rights of Stockholders. Reference is made to the
Registrant's Registration Statement No. 00-16177 on Form 8-A which is
incorporate herein by reference pursuant to Item 3(c) of this
Registration Statement.
EXHIBIT 5
Opinion and consent of Brobeck, Phleger & Harrison
December 21, 1995
Oncor, Inc.
205 Perry Parkway
Gaithersburg, MD 20877
Re: Oncor, Inc. (the "Company")
Registration Statement for
500,000 Shares of Common Stock
Dear Ladies and Gentlemen:
We refer to your registration on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as
amended, of the 500,000 shares of Common Stock available for
issuance under the Company's 1992 Stock Option Plan. We advise you
that, in our opinion, when such shares have been issued and sold
pursuant to the applicable provisions of the Company's 1992 Stock
Option Plan and in accordance with the Registration Statement, such
shares will be validly issued, fully paid and nonassessable shares
of the Company's Common Stock.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON, LLP
EXHIBIT 23.1
Consent of Independent Accountants -
Arthur Anderson LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated February 28, 1995 included in Oncor, Inc.'s Form 10-
K for the year ended December 31, 1994 and to all references to
our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Washington, D.C.
December 26, 1995
<PAGE>
EXHIBIT 23.2
Consent of Brobeck, Phleger & Harrison
contained in Exhibit 5.
<PAGE>
EXHIBIT 24
Power of Attorney. Reference is made to
page II-4 of this Registration Statement.
EXHIBIT 99.1
1992 Stock Option Plan
ONCOR, INC.
1992 STOCK OPTION PLAN
AMENDED EFFECTIVE JUNE 7, 1995
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSES OF THE PLAN
A. This 1992 Stock Option Plan (the "Plan") was
implemented, as of March 17, 1992 (the "Effective Date"), to
promote the interests of Oncor, Inc., a Maryland corporation (the
"Company"), by providing a method whereby (i) key employees
(including officers and directors) of the Company (or its parent
or subsidiary corporations) who are responsible for the
management, growth and financial success of the Company (or its
parent or subsidiary corporations), (ii) the non-employee members
of the Company's Board of Directors and (iii) consultants and
other independent contractors who provide valuable services to
the Company (or its parent or subsidiary corporations) may be
offered the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Company as
an incentive for them to remain in the service of the Company (or
its parent or subsidiary corporations).
B. This Plan shall serve as the successor to
the Company's Incentive Stock Option Plan, as amended (the "ISO
Plan"), the Company's Non-Qualified Stock Option Plan, as amended
(the "NQSO Plan") and the Company's 1991 Non-Qualified Stock
Option Plan for Non-Employee Directors (the "Director Plan"), and
no further option grants shall be made under the ISO, NQSO and
Director Plans (such Plans to be hereinafter referred to as the
"Predecessor Plans") from and after the Effective Date of this
Plan. All options outstanding under the Predecessor Plans on such
Effective Date are hereby incorporated into this Plan and shall
accordingly be treated as outstanding options under this Plan.
However, each outstanding option so incorporated shall continue
to be governed solely by the express terms and conditions of the
instrument evidencing such grant, and no provision of this Plan
shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such incorporated options with
respect to their acquisition of shares of the Company's common
stock thereunder.
<PAGE>
C. For purposes of the Plan, the following provisions
shall be applicable in determining the parent and subsidiary
corporations of the Company:
Any corporation (other than the
Company) in an unbroken chain of corporations ending
with the Company shall be considered to be a PARENT
corporation of the Company, provided each such
corporation in the unbroken chain (other than the
Company) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of
the other corporations in such chain.
Each corporation (other than the
Company) in an unbroken chain of corporations beginning
with the Company shall be considered to be a SUBSIDIARY
of the Company, provided each such corporation (other
than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations
in such chain.
II. STRUCTURE OF THE PLAN
A. Stock Programs. The Plan shall be divided
into two separate components: the Discretionary Option Grant
Program specified in Article Two and the Automatic Option Grant
Program specified in Article Three. Under the Discretionary
Option Grant Program, eligible individuals may, at the discretion
of the Plan Administrator, be granted options to purchase shares
of common stock in accordance with the provisions of Article Two.
Under the Automatic Option Grant Program, each eligible member of
the Company's Board of Directors (the "Board") will automatically
receive periodic option grants to purchase shares of common stock
in accordance with the provisions of Article Three.
B. General Provisions. Unless the context
clearly indicates otherwise, the provisions of Articles One and
Four of the Plan shall apply to the Discretionary Option Grant
Program and the Automatic Option Grant Program and shall
accordingly govern the interests of all individuals under the
Plan.
III. ADMINISTRATION OF THE PLAN
A. The Discretionary Option Grant Program shall
be administered by one or more committees comprised of Board
members. The primary committee (the "Primary Committee") shall be
comprised of two or more non-employee Board members and shall
have sole and exclusive authority to grant stock options and
stock appreciation rights under the Discretionary Option Grant
Program to employee directors of the Company subject to the
short-swing profit restrictions of the Federal securities laws.
Stock options may be granted under the Discretionary Option Grant
Program to all other eligible employees and consultants by either
the Primary Committee or a second committee comprised of two or
more employee Board members (the "Secondary Committee"). The
members of the Primary
2.
<PAGE>
Committee and the Secondary Committee shall each serve for such
period of time as the Board may determine and shall be subject to
removal by the Board at any time.
B. No Board member shall be eligible to serve
on the Primary Committee if such individual has, within the
twelve (12)-month period immediately preceding the date he or she
is to be appointed to such Committee, received any option grant,
stock appreciation right or stock issuance under this Plan or any
other stock plan of the Company (or any parent or subsidiary
corporation), other than pursuant to the Automatic Option Grant
Program (or the predecessor Director Plan).
C. Subject to the limited authority provided
the Secondary Committee to effect option grants in accordance
with the provisions of Section III.A of this Article One, the
Primary Committee shall serve as the Plan Administrator and shall
have full power and authority (subject to the express provisions
of the Discretionary Option Grant Program) to establish such
rules and regulations as it may deem appropriate for the proper
administration of such program and to make such determinations
under the program and any outstanding option as it may deem
necessary or advisable. Decisions of the Plan Administrator shall
be final and binding on all parties with an interest in the Plan
or any outstanding option under this Discretionary Option Grant
Program.
D. Administration of the Automatic Option Grant
Program shall be self- executing in accordance with the express
terms and conditions of Article Three.
IV. ELIGIBILITY FOR OPTION GRANTS
A. The persons eligible to participate in the
Discretionary Option Grant Program under Article Two of the Plan
shall be limited to the following:
(i) officers and other key employees of the
Company (or its parent or subsidiary corporations) who
render services which contribute to the management,
growth and financial success of the Company (or its
parent or subsidiary corporations); and
(ii) those consultants or independent
contractors who provide valuable services to the
Company (or its parent or subsidiary corporations).
B. Non-employee members of the Board shall not
be eligible to participate in the Discretionary Option Grant
Program or in any other stock option, stock purchase, stock bonus
or other stock plan of the Company (or its parent or subsidiary
corporations). However, non-employee members of the Board shall
be eligible to receive automatic option grants pursuant to the
provisions of Article Three.
C. The Plan Administrator shall have full
authority to determine which eligible individuals are to receive
option grants under the Discretionary Option Grant
3.
<PAGE>
Program, the number of shares to be covered by each such grant,
whether the granted option is to be an incentive stock option
("Incentive Option") which satisfies the requirements of Section
422 of the Internal Revenue Code or a non-statutory option not
intended to meet such requirements, the time or times at which
each such option is to become exercisable, and the maximum term
for which the option is to remain outstanding.
V. STOCK SUBJECT TO THE PLAN
A. Shares of the Company's common stock, par
value $0.01 per share (the "Common Stock"), shall be available
for issuance under the Plan and shall be drawn from either the
Company's authorized but unissued shares of Common Stock or from
reacquired shares of Common Stock, including shares repurchased
by the Company on the open market. The maximum number of shares
of Common Stock which may be issued over the term of the Plan
shall not exceed Four Million Five Hundred Fifteen Thousand Six
Hundred and Four (4,515,604) shares, subject to adjustment from
time to time in accordance with the provisions of this Section V.
Such authorized share reserve is comprised of (i) the number of
shares remaining available for issuance under the Predecessor
Plans as of the Effective Date, including the shares subject to
the outstanding options incorporated into this Plan and any other
shares which would have been available for future option grant
under the Predecessor Plans, plus (ii) additional increases of
Two Million Five Hundred Thousand (2,500,000) shares of Common
Stock. Accordingly, to the extent one or more outstanding options
under the Predecessor Plans which have been incorporated into
this Plan are subsequently exercised, the number of shares issued
with respect to each such option shall reduce, on a
share-for-share basis, the number of shares available for
issuance under this Plan.
B. In no event may any one individual
participating in the Plan be granted stock options and direct
stock issuances for more than 800,000 shares of Common Stock in
the aggregate over the remaining term of the Plan, subject to
adjustment from time to time in accordance with the provisions of
this Section V. For purposes of such limitation, no stock options
or direct stock issuances granted prior to January 1, 1994 shall
be taken into account.
C. Should one or more outstanding options under
this Plan (including outstanding options under the Predecessor
Plans incorporated into this Plan) expire or terminate for any
reason prior to exercise in full (including any option cancelled
in accordance with the cancellation-regrant provisions of Section
IV of Article Two of the Plan), then the shares subject to the
portion of each option not so exercised shall be available for
subsequent option grant under the Plan. Shares subject to any
option cancelled in accordance with Section V of Article Two or
Section III of Article Three and shares repurchased by the
Company pursuant to its repurchase rights under the Plan shall
not be available for subsequent option grant under the Plan.
4.
<PAGE>
D. In the event any change is made to the
Common Stock issuable under the Plan by reason of any stock
split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding
Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the number and/or
class of shares issuable under the Plan, (ii) the number and/or
class of shares and price per share in effect under each
outstanding option under the Discretionary Option Grant Program,
(iii) the number and/or class of shares per non-employee Board
member for which automatic option grants are subsequently to be
made under the Automatic Option Grant Program, (iv) the number
and/or class of shares and price per share in effect under each
automatic grant outstanding under the Automatic Option Grant
Program and (v) the number and/or class of shares and price per
share in effect under each outstanding option incorporated into
this Plan from the Predecessor Plans. Such adjustments to the
outstanding options are to be effected in a manner which shall
preclude the enlargement or dilution of rights and benefits under
such options.
5.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to this Article Two
shall be authorized by action of the Primary or Secondary
Committee making the grant and may, at the applicable Committee's
discretion, be either Incentive Options or non-statutory options.
Individuals who are not Employees may only be granted
non-statutory options under this Article Two. Each granted option
shall be evidenced by one or more instruments in the form
approved by the Plan Administrator to evidence option grants made
under this Article Two. Each such instrument shall, however,
comply with the terms and conditions specified below, and each
instrument evidencing an Incentive Option shall, in addition, be
subject to the applicable provisions of Section II of this
Article Two.
A. Option Price.
1. The option price per share shall be
fixed by the Primary or Secondary Committee making the option
grant. In no event, however, shall the option price per share be
less than fifty percent (50%) of the fair market value per share
of Common Stock on the date of the option grant.
2. The option price shall become
immediately due upon exercise of the option and shall, subject to
the provisions of Section VI of this Article Two and the
instrument evidencing the grant, be
payable as follows:
- full payment in cash or check drawn
to the Company's order;
- full payment in shares of Common
Stock held by the optionee for the requisite period
necessary to avoid a charge to the Company's earnings
for financial reporting purposes and valued at fair
market value on the Exercise Date (as such term is
defined below);
- full payment through a combination
of shares of Common Stock held by the optionee for the
requisite period necessary to avoid a charge to the
Company's earnings for financial reporting purposes and
valued at fair market value on the Exercise Date and
cash or cash equivalent; or
- full payment through a broker-dealer
sale and remittance procedure pursuant to which the
optionee (I) shall provide irrevocable written
instructions to a designated brokerage firm to effect
the immediate sale of the purchased shares and remit to
the Company, out of the sale proceeds available on the
settlement date,
6.
<PAGE>
sufficient funds to cover the aggregate option price
payable for the purchased shares plus all applicable
Federal and State income and employment taxes required
to be withheld by the Company in connection with such
purchase and (II) shall provide written directives to
the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in
order to complete the sale transaction.
For purposes of this subparagraph 2, the
Exercise Date shall be the date on which written notice of the
option exercise is delivered to the Company. Except to the extent
the sale and remittance procedure is utilized in connection with
the exercise of the option, payment of the option price for the
purchased shares must accompany such notice.
3. The fair market value per share of Common
Stock on any relevant date under the Plan shall be determined in
accordance with the following provisions:
- If the Common Stock is not at the
time listed or admitted to trading on any national stock
exchange but is traded on the over-the-counter market,
the fair market value shall be the mean between the
highest bid and lowest asked prices (or, if such
information is available, the closing selling price) per
share of Common Stock on the date in question on the
over-the-counter market, as such prices are reported by
the National Association of Securities Dealers through
its NASDAQ system or any successor system. If there are
no reported bid and asked prices (or closing selling
price) for the Common Stock on the date in question,
then the mean between the highest bid price and lowest
asked price (or the closing selling price) on the last
preceding date for which such quotations exist shall be
determinative of fair market value.
- If the Common Stock is at the time
listed or admitted to trading on any national stock
exchange, then the fair market value shall be the
closing selling price per share of Common Stock on the
date in question on the stock exchange determined by the
Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If
there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market
value shall be the closing selling price on the exchange
on the last preceding date for which such quotation
exists.
B. Term and Exercise of Options.
Each option granted under this Article Two shall
be exercisable at such time or times, during such period, and for
such number of shares as shall be determined by the Primary or
Secondary Committee making the grant and set forth in the
instrument evidencing such grant. No such option, however, shall
have a maximum term in excess of ten (10) years from the grant
date. During the lifetime of the optionee, the option shall be
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exercisable only by the optionee and shall not be assignable or
transferable by the optionee otherwise than by will or by the
laws of descent and distribution following the optionee's death.
C. Termination of Service.
1. Except to the extent otherwise provided
pursuant to Section VII of this Article Two, the following
provisions shall govern the exercise period applicable to any
outstanding options under this Article II which are held by the
optionee at the time of his or her cessation of Service or death.
- Should the optionee cease to remain
in Service for any reason other than death or permanent
disability, then the period for which each outstanding
option held by such optionee is to remain exercisable
shall be limited to the three (3)-month period following
the date of such cessation of Service.
- In the event such Service terminates
by reason of permanent disability (as defined in Section
22(e)(3) of the Internal Revenue Code), then the period
for which each outstanding option held by the optionee
is to remain exercisable shall be limited to the twelve
(12)-month period following the date of such cessation
of Service.
- Should the optionee die while in
Service or during the three (3)- month period following
his or her cessation of Service, then the period for
which each of his or her outstanding options is to
remain exercisable shall be limited to the twelve
(12)-month period following the date of the optionee's
death. During such limited period, the option may be
exercised by the personal representative of the
optionee's estate or by the person or persons to whom
the option is transferred pursuant to the optionee's
will or in accordance with the laws of descent and
distribution.
- Under no circumstances, however,
shall any such option be exercisable after the specified
expiration date of the option term.
- Each such option shall, during such
limited exercise period, be exercisable for any or all
of the shares for which the option is exercisable on the
date of the optionee's cessation of Service. Upon the
expiration of such limited exercise period or (if
earlier) upon the expiration of the option term, the
option shall terminate and cease to be exercisable.
- Should the optionee's Service
terminate under the circumstances specified in
subparagraph (A) or (B) below, then all outstanding
options held by such optionee under the Discretionary
Option Grant Program shall immediately terminate and
cease to be exercisable upon such termination of
Service:
8.
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(A) The optionee's Service is
involuntarily terminated by the Company by reason of
such individual's proven dishonesty, his or her
commission of any willful act of violence to the injury
of the Company, his or her breach of any fiduciary duty
owed to the Company, or his or her failure to perform,
in a competent manner reasonably satisfactory to the
Company, the services for which such individual was
retained; or
(B) The optionee voluntarily terminates
his or her Service, but the Company could have
involuntarily terminated the optionee's Service at such
time for one or more of the reasons specified in
subparagraph (A) above.
The acts of misconduct specified in
this subsection for the immediate termination of the
outstanding options held by such optionee are not
intended to be, and are accordingly not inclusive of,
all acts or omissions which the Company may deem to
constitute misconduct or other grounds for the
involuntary termination of the optionee's (or any other
individual's) Service, whether or not such other acts or
omissions would otherwise result in the termination of
such individual's outstanding options under the
Discretionary Option Grant Program.
2. The Plan Administrator (or the Primary or
Secondary Committee making the option grant) shall have complete
discretion, exercisable either at the time the option is granted
or at any time while the option remains outstanding, to permit
one or more options held by the optionee under this Article Two
to be exercised, during the limited period of exercisability
provided under subparagraph 1 above, not only with respect to the
number of shares for which each such option is exercisable at the
time of the optionee's cessation of Service but also with respect
to one or more subsequent installments of purchasable shares for
which the option would otherwise have become exercisable had such
cessation of Service not occurred.
3. For purposes of the foregoing provisions of
this Section I.C (and for all other purposes under the Plan):
- The optionee shall be deemed to
remain in the SERVICE of the Company for so long as such
individual renders services on a periodic basis to the
Company (or any parent or subsidiary corporation) in the
capacity of an Employee, a non-employee member of the
Board or an independent consultant or advisor.
- The optionee shall be considered to
be an EMPLOYEE for so long as such individual remains in
the employ of the Company or one or more of its parent
or subsidiary corporations, subject to the control and
direction of the employer entity not only as to the work
to be performed but also as to the manner and method of
performance.
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D. Shareholder Rights.
An optionee shall have no shareholder rights
with respect to any shares covered by the option until such
individual shall have exercised the option, paid the option price
for the purchased shares and been issued a stock certificate for
such shares.
E. Repurchase Rights.
1. The Primary or Secondary Committee
making the option grant shall have the discretion to authorize
the issuance of unvested shares of Common Stock under such grant.
Should the optionee cease Service while holding such unvested
shares, the Company shall have the right to repurchase any or all
of those unvested shares at the option price paid per share. The
terms and conditions upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall
be established by the Primary or Secondary Committee making the
option grant and set forth in the instrument evidencing such
repurchase right.
2. All of the Company's outstanding
repurchase rights shall automatically terminate, and all shares
subject to such terminated rights shall immediately vest in full,
upon the occurrence of any Corporate Transaction under Section
III of this Article Two, except to the extent: (i) any such
repurchase right is to be assigned to the successor corporation
(or parent thereof) in connection with the Corporate Transaction
or (ii) such termination is precluded by other limitations
imposed by the Primary or Secondary Committee making the option
grant at the time the repurchase right is issued.
3. The Plan Administrator (or the
Primary or Secondary Committee making the option grant) shall
have the discretionary authority, exercisable either before or
after the optionee's cessation of Service, to cancel the
Company's outstanding repurchase rights with respect to one or
more shares purchased or purchasable by the optionee under the
granted option and thereby accelerate the vesting of such shares
in connection with the optionee's cessation of Service.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall
be applicable to all Incentive Options granted under this Article
Two. Incentive Options may only be granted to individuals who are
Employees of the Company. Options which are specifically
designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.
A. Option Price. The option price per share
of the Common Stock subject to an Incentive Option
shall in no event be less than one hundred percent
(100%) of the fair market value of such Common Stock on
the grant date.
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B. Sequential Exercise. No Incentive Option
granted under the ISO Plan prior to January 1, 1987 may
be exercised while there remains outstanding (within
the meaning of subsection (c)(7) of such Section 422)
any other pre-1987 Incentive Option which was granted
at an earlier date to the optionee to purchase stock in
the Company or in any other corporation which was on
the grant date of the later option either a parent or
subsidiary corporation of the Company or a predecessor
corporation of any of such corporations.
C. Dollar Limitation. The following dollar
limitations shall be in effect for Incentive Options
granted under the Plan:
(i) Pre-1987 Grants. The aggregate
fair market value (determined as of the respective date
or dates of grant) of the Common Stock for which
Incentive Options could have been granted under the ISO
Plan to any Employee in any one calendar year prior to
the 1987 calendar year must not have exceeded the sum
of One Hundred Thousand Dollars ($100,000.00), plus any
unused Carryover to such pre-1987 calendar year. For
purposes of the preceding limitation, the term
"Carryover" means one-half (1/2) of the amount by which
the sum of One Hundred Thousand Dollars ($100,000.00)
exceeded the aggregate fair market value (determined as
of the respective date or dates of grant) of the Common
Stock for which the Employee was previously granted
Incentive Options under the ISO Plan in each calendar
year after 1980 and prior to 1987. The unused Carryover
was available for each of the three (3) pre-1987
calendar years immediately following the calendar year
in which the Carryover arose and increased the basic
$100,000.00 limitation otherwise applicable to the
Employee for each such pre-1987 calendar year by an
amount equal to the Carryover, less the portion thereof
used in prior calendar years. Incentive Options granted
the Employee during any pre-1987 calendar year were
first applied against the basic $100,000.00 limitation
in effect for such calendar year and then applied
against any of the Employee's unused Carryovers to such
calendar year, in the order in which such Carryovers
arose in prior calendar years.
(ii) Post-1986 Grants. The aggregate
fair market value (determined as of the respective date
or dates of grant) of the Common Stock for which one or
more options granted after December 31, 1986 to any
Employee under this Plan (or any other option plan of
the Company or its parent or subsidiary corporations)
may for the first time become exercisable as incentive
stock options under the Federal tax laws during any one
post-1986 calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000.00). To the extent
the Employee holds two or more such post-1986 options
which become exercisable for the first time in the same
calendar year, the foregoing limitation on the
exercisability of such options as incentive stock
options under the Federal tax laws shall be applied on
the basis of the order in which such options are
granted.
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D. 10% Shareholder. If any individual to whom
the Incentive Option is granted is the owner of stock
(as determined under Section 424(d) of the Internal
Revenue Code) possessing 10% or more of the total
combined voting power of all classes of stock of the
Company or any one of its parent or subsidiary
corporations, then the option price per share shall not
be less than one hundred and ten percent (110%) of the
fair market value per share of Common Stock on the grant
date, and the option term shall not exceed five (5)
years, measured from such grant date.
Except as modified by the preceding provisions
of this Section II, the provisions of Articles One, Two and Four
of the Plan shall apply to all Incentive Options granted
hereunder.
III. CORPORATE TRANSACTIONS
A. In the event of any of the following
shareholder-approved transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which
the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change
the State of the Company's incorporation,
(ii) the sale, transfer or other
disposition of all or substantially all of the assets
of the Company in liquidation or dissolution of the
Company, or
(iii) any reverse merger in which the
Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding
securities are transferred to holders different from
those who held such securities immediately prior to
such merger,
then the exercisability of each option
outstanding under this Article Two shall automatically accelerate
so that each such option shall, immediately prior to the
specified effective date for the Corporate Transaction, become
fully exercisable with respect to the total number of shares of
Common Stock at the time subject to such option and may be
exercised for all or any portion of such shares. However, an
outstanding option under this Article Two shall not so accelerate
if and to the extent: (i) such option is, in connection with the
Corporate Transaction, to be assumed by the successor corporation
or parent thereof or replaced with a comparable option to
purchase shares of the capital stock of the successor corporation
or parent thereof, (ii) such option is to be replaced by a
comparable cash incentive program of the successor corporation
based on the option spread at the time of the Corporate
Transaction, or (iii) the acceleration of such option is subject
to other limitations imposed by the Primary or Secondary
Committee making the option grant at the time of such grant. The
determination of comparability under clause (i) or (ii) above
shall
12.
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be made by the Plan Administrator, and its determination shall be
final, binding and conclusive.
B. Upon the consummation of the Corporate
Transaction, all outstanding options under this Article Two shall
terminate and cease to be outstanding, except to the extent
assumed by the successor corporation or its parent company.
C. Each outstanding option under this Article
Two which is assumed in connection with the Corporate Transaction
or is otherwise to continue in effect shall be appropriately
adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would
have been issuable, in consummation of such Corporate
Transaction, to an actual holder of the same number of shares of
Common Stock as are subject to such option immediately prior to
such Corporate Transaction. Appropriate adjustments shall also be
made to the option price payable per share, provided the
aggregate option price payable for such securities shall remain
the same. In addition, the class and number of securities
available for issuance under the Plan following the consummation
of the Corporate Transaction shall be appropriately adjusted.
D. The grant of options under this Article Two
shall in no way affect the right of the Company to adjust,
reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority
to effect, at any time and from time to time, with the consent of
the affected optionees, the cancellation of any or all
outstanding options under this Article Two (including outstanding
options under the ISO and NQSO Plans incorporated into this Plan)
and to grant in substitution new options under the Plan covering
the same or different numbers of shares of Common Stock but
having an option price per share not less than fifty percent
(50%) of the fair market value of the Common Stock on the new
grant date (or one hundred percent (100%) of such fair market
value in the case of an Incentive Option).
V. STOCK APPRECIATION RIGHTS
A. Provided and only if the Plan Administrator
determines in its discretion to implement the stock appreciation
right provisions of this Section V, the Plan Administrator may
grant one or more optionees the right, exercisable upon such
terms and conditions as the Plan Administrator may establish, to
surrender all or part of an unexercised option under this Article
Two in exchange for a distribution from the Company in an amount
equal to the excess of (i) the fair market value (on the option
surrender date) of the number of shares in which the optionee is
at the time vested under the surrendered
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option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.
B. No surrender of an option shall be effective
hereunder unless it is approved by the Plan Administrator. If the
surrender is so approved, then the distribution to which the
optionee shall accordingly become entitled under this Section V
may be made in shares of Common Stock valued at fair market value
on the option surrender date, in cash, or partly in shares and
partly in cash, as the Plan Administrator shall in its sole
discretion deem appropriate.
C. If the option surrender is rejected by the
Plan Administrator, the optionee shall retain whatever rights the
optionee had under the surrendered option (or surrendered portion
thereof) on the option surrender date and may exercise such
rights at any time prior to the later of (i) five (5) business
days after the receipt of the rejection notice or (ii) the last
day on which the option is otherwise exercisable in accordance
with the terms of the instrument evidencing such option, but in
no event may such rights be exercised more than ten (10) years
after the grant date of the option.
D. One or more officers of the Company subject
to the short-swing profit restrictions of the Federal securities
laws may, in the Plan Administrator's sole discretion, be granted
limited stock appreciation rights in tandem with their
outstanding options under this Discretionary Option Grant
Program. Upon the occurrence of a Hostile Take-Over, each
outstanding option with such a limited stock appreciation right
in effect for at least six (6) months shall automatically be
cancelled, and the optionee shall in return be entitled to a cash
distribution from the Company in an amount equal to the excess of
(i) the Take-Over Price of the shares of Common Stock at the time
subject to the cancelled option (whether or not the option is
otherwise at the time exercisable for such shares) over (ii) the
aggregate exercise price payable for such shares. The cash
distribution payable upon such cancellation shall be made within
five (5) days following the consummation of the Hostile
Take-Over. Neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such
option cancellation and cash distribution.
E. For purposes of Section V.D, the
following definitions shall be in effect:
A Hostile Take-Over shall be deemed to
occur in the event (i) any person or related group of
persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than forty percent (40%) of the total
combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer which
the Board does not recommend the Company's shareholders
to accept and (ii) more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer
are accepted from holders other than officers and
directors of the Company who participate in the Plan.
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The Take-Over Price per share shall be
deemed to be equal to the greater of (a) the fair
market value per share on the date of cancellation, as
determined pursuant to the valuation provisions of
Section I.A.3 of this Article Two, or (b) the highest
reported price per share paid in effecting such Hostile
Take-Over. However, if the cancelled option is an
Incentive Option, the Take-Over Price shall not exceed
the clause (a) price per share.
F. The shares of Common Stock subject to any
option surrendered or cancelled for an appreciation distribution
pursuant to this Section V shall NOT be available for subsequent
option grant under the Plan.
VI. EXTENSION OF EXERCISE PERIOD
The Plan Administrator shall have full power
and authority to extend the period of time for which any option
granted under this Article Two is to remain exercisable following
the optionee's cessation of Service or death from the limited
period in effect under Section I.C.1 of this Article Two to such
greater period of time as the Plan Administrator shall deem
appropriate; provided, however, that in no event shall such
option be exercisable after the specified expiration date of the
option term.
15.
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ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
I. ELIGIBILITY
A. Successor Program. The automatic option
grant program established pursuant to the provisions of this
Article Three shall serve as a successor to the special stock
option program previously in effect for non-employee Board
members under the Director Plan. No further grants shall be made
under the Director Plan, and all outstanding option grants under
the Director Plan are hereby incorporated into this Plan and
shall accordingly be treated as outstanding options under this
Plan. However, each such option grant incorporated into this Plan
shall continue to be governed solely by the express terms and
conditions of the instrument evidencing such grant, and no
provision of this Article Three automatic option grant program
shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such incorporated option grants
with respect to their acquisitions of shares of the Company's
Common Stock thereunder or the exercise of their outstanding
stock appreciation rights thereunder.
B. Eligible Optionees. The individuals eligible
for automatic option grants under this Article Three shall
include each non-employee Board member initially elected or
appointed after the Effective Date, plus each continuing
non-employee Board member.
C. Limitation. Except for the option grants to
be made pursuant to the provisions of this Article Three,
non-employee Board members shall not be eligible to receive any
additional option grants or stock issuances under this Plan or
any other stock plan of the Company (or its subsidiary
corporations).
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. Grant Dates. Option grants will be made under
this Article Three on ------------- the dates specified below:
(i) Each individual who initially
becomes a non-employee Board member at any time after
the Effective Date, whether through election at an
Annual Shareholders Meeting or through appointment by
the Board, shall automatically be granted, at the time
of such initial election or appointment, a non-statutory
stock option to purchase 50,000 shares of Common Stock
upon the terms and conditions of this Article Three.
(ii) On the date of each Annual
Stockholders Meeting, beginning with the 1995 Annual
Stockholders Meeting, each non-employee Board member who
is re-elected at such Annual Meeting and who has
completed three (3) consecutive
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years of service as a non-employee Board member as of
the date of such Annual Meeting shall automatically be
granted a non-statutory option under the Plan to
purchase 50,000 shares of Common Stock. There shall be
no limit on the number of 50,000 share options grants
any non-employee Board member may receive every three-
(3) year period over his or her continued Board service.
As such, a non-employee Board member would receive an
option grant at the Annual Meeting at which he or she is
elected to the Board for the fourth consecutive year,
the seventh consecutive year, the tenth consecutive
year, and so on.
The 50,000-share limitation on the automatic
option grant to be made to each eligible non-employee Board
member shall be subject to periodic adjustment pursuant to the
applicable provisions of Section V.C of Article One.
B. Exercise Price. The exercise price per share
shall be equal to one hundred percent (100%) of the fair market
value per share of Common Stock on the automatic grant date.
C. Payment.
The exercise price shall be payable in one of
the alternative forms specified below:
- full payment in cash or check made
payable to the Company's order;
- full payment in shares of Common
Stock held for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting
purposes and valued at fair market value on the Exercise
Date (as such term is defined below);
- full payment in a combination of
shares of Common Stock held for the requisite period
necessary to avoid a charge to the Company's earnings
for financial reporting purposes and valued at fair
market value on the Exercise Date and cash or check
payable to the Company's order; or
- full payment through a broker-dealer
sale and remittance procedure pursuant to which the
optionee (I) shall provide irrevocable written
instructions to a designated brokerage firm to effect
the immediate sale of the purchased shares and remit to
the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate
option price payable for the purchased shares and (II)
shall provide written directives to the Company to
deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the
sale transaction.
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For purposes of this subparagraph, the
Exercise Date shall be the date on which written notice of the
option exercise is delivered to the Company, and the fair market
value per share of Common Stock on any relevant date shall be
determined in accordance with the provisions of Section I.A.3 of
Article Two. Except to the extent the sale and remittance
procedure is utilized for the exercise of the option, payment of
the exercise price for the purchased shares must accompany the
exercise notice.
D. Option Term. Each automatic grant under this
Article Three shall have ------------- a maximum term of five (5)
years measured from the automatic grant date.
E. Exercisability. The option shall become
exercisable for the option shares in a series of four (4)
installments as follows:
(i) The option shall become exercisable for
twenty-five percent (25%) of the option shares upon the
optionee's completion of (6) continuous months of Board
service measured from the automatic grant date.
(ii) The option shall become exercisable
for an additional twenty-five percent (25%) of the
option shares upon the optionee's completion of
eighteen (18) continuous months of Board service
measured from the automatic grant date.
(iii) The option shall become exercisable
for an additional twenty-five percent (25%) of the
option shares upon the optionee's completion of thirty
(30) continuous months of Board service measured from
the automatic grant date.
(iv) The option shall become exercisable
for the final twenty- five percent (25%) of the option
shares upon the optionee's completion of forty-two (42)
continuous months of Board service measured from the
automatic grant date.
As the option becomes exercisable for
one or more installments of the option shares, the installments
shall accumulate, and the option shall remain exercisable for the
accumulated installments until the expiration or sooner
termination of the option term.
The option, however, shall not become
exercisable for any additional option shares following the
optionee's cessation of Board service, except to the extent the
option is otherwise to become exercisable in accordance with the
provisions of Section III of this Article Three.
F. Non-Transferability. During the lifetime
of the optionee, the option shall be exercisable only by the
optionee and shall not be assignable or transferable by the
optionee otherwise than by will or by the laws of descent and
distribution following the optionee's death.
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G. Termination of Board Membership.
1. Should the optionee cease to serve
as a Board member for any reason (other than death) while holding
an automatic option grant under this Article Three, then such
optionee shall have a twelve (12)-month period following the date
of such cessation of Board service in which to exercise such
option for any or all of the shares of Common Stock for which the
option is exercisable at the time of the optionee's cessation of
Board service.
2. Should the optionee die while
serving as a Board member, then the option may subsequently be
exercised, for any or all of the shares of Common Stock for which
the option is exercisable at the time of the optionee's cessation
of Board service, by the personal representative of the
optionee's estate or by the person or persons to whom the option
is transferred pursuant to the optionee's will or in accordance
with the laws of descent and distribution. Any such exercise
must, however, occur within twelve (12) months after the date of
the optionee's death.
3. In no event shall any automatic
grant under this Article Three remain exercisable after the
specified expiration date of the five (5)-year option term. Upon
the expiration of the applicable exercise period in accordance
with subparagraphs 1 and 2 above or (if earlier) upon the
expiration of the five (5)-year option term, the automatic grant
shall terminate and cease to be exercisable.
H. Shareholder Rights. The holder of an
automatic option grant under this Article Three shall have no
shareholder rights with respect to any shares covered by such
option until such individual shall have exercised the option,
paid the exercise price for the purchased shares and been issued
a stock certificate for such shares.
I. Remaining Terms. The remaining terms and
conditions of each automatic option grant shall be as set forth
in the prototype Non-Statutory Stock Option Agreement attached as
Exhibit A to the Plan.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE
TAKE-OVER
A. In the event of any of the following
shareholder-approved transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which
the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change
the State of the Company's incorporation,
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(ii) the sale, transfer or other
disposition of all or substantially all of the assets
of the Company in liquidation or dissolution of the
Company, or
(iii) any reverse merger in which the
Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding
securities are transferred to holders different from
those who held such securities immediately prior to
such merger,
then the exercisability of each automatic
option grant outstanding under this Article Three shall
automatically accelerate so that each such option shall,
immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable with respect to
the total number of shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of such
shares. Upon the consummation of the Corporate Transaction, all
automatic option grants under this Article Three shall terminate
and cease to be outstanding.
B. In connection with any Change in Control of
the Company, each automatic option grant at the time outstanding
under this Article Three shall automatically accelerate so that
each such option shall, immediately prior to the specified
effective date for the Change in Control, become fully
exercisable with respect to the total number of shares of Common
Stock at the time subject to such option and may be exercised for
all or any portion of such shares at any time prior to the
expiration or sooner termination of the option term. For purposes
of this Article Three, a Change in Control shall be deemed to
occur in the event:
(i) any person or related group of
persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than forty percent (40%) of the total
combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer which
the Board does not recommend the Company's shareholders
to accept; or
(ii) there is a change in the
composition of the Board over a period of twenty-four (24)
consecutive months or less such that a majority of the
Board members (rounded up to the next whole number)
cease, by reason of one or more proxy contests for the
election of Board members, to be comprised of
individuals who either (A) have been Board members
continuously since the beginning of such period or (B)
have been elected or nominated for election as Board
members during such period by at least two-thirds of
the Board members described in clause (A) who were
still in office at the time such election or nomination
was approved by the Board.
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C. Upon the occurrence of a Hostile Take-Over,
each automatic option grant which has been outstanding under this
Article Three for a period of at least six (6) months shall
automatically be cancelled in return for a cash distribution from
the Company in an amount equal to the excess of (i) the Take-Over
Price of the shares of Common Stock at the time subject to the
cancelled option (whether or not the option is otherwise at the
time exercisable for such shares) over (ii) the aggregate
exercise price payable for such shares. The cash distribution
payable upon such cancellation shall be made to the option holder
within five (5) days following the consummation of the Hostile
Take-Over. Neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such
option cancellation and cash distribution.
D. For purposes of this Section III,
the following definitions shall be in effect:
A Hostile Take-Over shall be deemed to
occur in the event (i) any person or related group of
persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than forty percent (40%) of the total
combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer which
the Board does not recommend the Company's shareholders
to accept and (ii) more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer
are accepted from holders other than officers and
directors of the Company who participate in this Plan.
The Take-Over Price per share shall be
deemed to be equal to the greater of (a) the fair
market value per share on the date of cancellation, as
determined pursuant to the valuation provisions of
Section I.A.3 of Article Two, or (b) the highest
reported price per share paid in effecting such Hostile
Take-Over.
D. The shares of Common Stock subject to each
option cancelled in connection with the Hostile Take-Over shall
NOT be available for subsequent issuance under this Plan.
E. The automatic option grants outstanding under
this Article Three shall in no way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets.
21.
<PAGE>
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
The provisions of this Automatic Option Grant
Program, including any automatic option grants outstanding under
this Article Three, may not be amended at intervals more
frequently than once every six (6) months, other than to the
extent necessary to comply with applicable Federal income tax
laws and regulations.
22.
<PAGE>
ARTICLE FOUR
MISCELLANEOUS
I. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive
power and authority to amend or modify the Plan in any or all
respects whatsoever. However, (i) no such amendment or
modification shall, without the consent of the holders, adversely
affect their rights and obligations with respect to options at
the time outstanding under the Plan and (ii) any amendment made
to the Automatic Option Grant Program (or any options outstanding
thereunder) shall be effected in compliance with the limitation
of Section IV of Article Three. In addition, the Board shall not,
without the approval of the Company's shareholders, (i)
materially increase the maximum number of shares issuable under
the Plan, except for permissible adjustments under Section V.C of
Article One, (ii) materially modify the eligibility requirements
for the grant of options under the Plan or (iii) otherwise
materially increase the benefits accruing to participants under
the Plan.
II. TAX WITHHOLDING
A. The Company's obligation to deliver shares
or cash upon the exercise of stock options or stock appreciation
rights granted under the Discretionary Option Grant Program shall
be subject to the satisfaction of all applicable Federal, State
and local income and employment tax withholding requirements.
III. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan, as successor to the Company's
ISO, NQSO and Director Plans, was initially adopted by the Board
of Directors on the Effective Date and approved by the Company's
shareholders on May 27, 1992. The Plan was amended by the Board
effective June 3, 1994, and such amendment was approved by the
shareholders on June 3, 1994. The Plan was further amended by the
Board effective June 7, 1995 to (i) increase the number of shares
authorized for issuance thereunder and (ii) amend the automatic
grant program in Article III to provide for additional grants of
options for 50,000 shares every three years. The shareholders
approved the amendments on June 7, 1995. Options may be granted
under this Plan at any time from and after the Effective Date of
the Plan and before the date fixed herein for termination of the
Plan.
B. The provisions of this amended Plan shall
apply only to options and stock appreciation rights granted under
the Plan from and after the June 7, 1995 effective date of the
amendments. All stock options and stock appreciation rights
issued and outstanding under the Plan immediately prior to such
effective date shall continue to be governed by the terms and
conditions of the Plan (and the respective instruments evidencing
each such option or stock appreciation right) as in effect on the
date each such option or
23.
<PAGE>
stock appreciation right was previously granted, and nothing in
this restatement shall be deemed to affect or otherwise modify
the rights or obligations of the holders of such options or stock
appreciation rights with respect to their acquisition of shares
of Common Stock under such options or their exercise of such
stock appreciation rights.
C. Each option issued and outstanding under the
Predecessor Plans immediately prior to the Effective Date of this
Plan shall be incorporated into this Plan and treated as an
outstanding option under this Plan, but each such option shall
continue to be governed solely by the terms and conditions of the
instrument evidencing such grant, and nothing in this Plan shall
be deemed to affect or otherwise modify the rights or obligations
of the holders of such options with respect to their acquisition
of shares of Common Stock thereunder.
D. The sale and remittance procedure authorized
for the exercise of outstanding options under this Plan shall be
available for all options granted under this Plan on or after the
Effective Date and for all non-statutory options outstanding
under the Predecessor Plans and incorporated into this Plan. The
Plan Administrator may also allow such procedure to be utilized
in connection with one or more disqualifying dispositions of
Incentive Option shares effected after the Effective Date,
whether such Incentive Options were granted under this Plan or
the ISO Plan.
E. Unless sooner terminated in accordance with
Section III of Article Two and Section III of Article Three, the
Plan shall terminate upon the earlier of (i) the expiration of
the ten (10) year period measured from the date of the Board's
initial adoption of the Plan or (ii) the date on which all shares
available for issuance under the Plan shall have been issued or
cancelled pursuant to the exercise, surrender or cash-out of the
options granted hereunder. If the date of termination is
determined under clause (i) above, then options outstanding on
such date shall thereafter continue to have force and effect in
accordance with the provisions of the instruments evidencing such
options.
F. Options may be granted under this Plan to
purchase shares of Common Stock in excess of the number of shares
then available for issuance under the Plan, provided each option
granted is not to become exercisable, in whole or in part, at any
time prior to shareholder approval of an amendment authorizing a
sufficient increase in the number of shares issuable under the
Plan.
III. USE OF PROCEEDS
Any cash proceeds received by the Company from
the sale of shares pursuant to options granted under the Plan
shall be used for general corporate purposes.
24.
<PAGE>
IV. REGULATORY APPROVALS
The implementation of the Plan, the granting of
any option hereunder, and the issuance of stock upon the exercise
or surrender of any such option shall be subject to the
procurement by the Company of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the stock issued pursuant to it.
V. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Company in
establishing or amending the Plan, nor any action taken by the
Plan Administrator (or the Primary or Secondary Committee)
hereunder, nor any provision of the amended Plan shall be
construed so as to grant any individual the right to remain in
the employ or service of the Company (or any parent or subsidiary
corporation) for any period of specific duration, and the Company
(or any parent or subsidiary corporation retaining the services
of such individual) may terminate such individual's employment or
service at any time and for any reason, with or without cause.
25.
EXHIBIT 99.2
Form of Notice of Grant of Stock Option
ONCOR, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option
grant (the "Option") to purchase shares of the Common Stock of
Oncor, Inc. (the "Company"):
Optionee:
---------
Grant Date:
----------
Type of Option:
--------------
Option Price:
------------
Number of Optioned Shares:
-------------------------
Expiration Date:
---------------
Exercise Schedule: The Option will initially become
exercisable upon the Optionee's completion of twelve (12) months
of service (as defined in the attached Stock Option Agreement)
measured from the Grant Date as follows:
Exercise Dates No. of Shares
-------------- -------------
The Option shall not become exercisable for any additional
Optioned Shares following the Optionee's cessation of Service,
except as may be otherwise provided in the Stock Option Agreement
attached hereto as Exhibit A.
Optionee understands that the Option is granted subject
to and in accordance with the express terms and conditions of the
Oncor, Inc. 1992 Stock Option Plan (the "Plan"), a copy of which
may be obtained upon request from the Secretary of the Company.
Optionee agrees to be bound by the terms and conditions of the
Plan and the terms and conditions of the Option as set forth in
the Stock Option Agreement.
No Employment or Service Contract: Nothing in the
Stock Option Agreement or the Plan shall confer upon the Optionee
the right to continue in the Service of the Company for any period
of specific duration or interfere with or otherwise restrict in any
way the rights of the Company or the Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service
at any time for any reason whatsoever, with or without cause.
<PAGE>
ONCOR, INC.
By: _________________________
Title: ______________________
_____________________________
Optionee
Address:
SSN:
Dated: _____________________, 1995
Exhibit A: Stock Option Agreement
2.
EXHIBIT 99.3
Form of Stock Option Agreement
EXHIBIT A
---------
ONCOR, INC.
-----------
STOCK OPTION AGREEMENT
----------------------
WITNESSETH:
-----------
RECITALS
- --------
A. The Board of Directors of the Company has adopted
the Company's 1992 Stock Option Plan (the "Plan") for the purpose
of attracting and retaining the services of selected key employees
(including officers and directors), non-employee Board members
and consultants and other independent contractors who contribute
to the financial success of the Company or its parent or subsidiary
corporations.
B. Optionee is an individual who is to render
valuable services to the Company or its parent or subsidiary
corporations, and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection
with the Company's grant of a stock option to Optionee.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms
and conditions set forth in this Agreement, the Company hereby
grants to Optionee, as of the grant date (the "Grant Date")
specified in the accompanying Notice of Grant of Stock Option
(the "Grant Notice"), a stock option to purchase up to that
number of shares of the Company's Common Stock (the "Optioned
Shares") as is specified in the Grant Notice. The Optioned
Shares shall be purchasable from time to time during the option
term at the option price per share (the "Option Price") specified
in the Grant Notice.
2. Option Term. This option shall have a maximum
term of ten (10) years measured from the Grant Date and shall
accordingly expire at the close of business on the expiration
date (the "Expiration Date") specified in the Grant Notice,
unless sooner terminated in accordance with Paragraph 5, 6 or 21.
3. Limited Transferability. This option shall be
neither transferable nor assignable by Optionee other than by
will or by the laws of descent and distribution following the
Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee.
4. Exercisability. This option shall become
exercisable for the Option Shares in one or more installments as
is specified in the Grant Notice. As the option becomes
exercisable for the Option Shares in one or more such installments,
the
<PAGE>
installments shall accumulate and the option shall remain
exercisable for the accumulated installments until the Expiration
Date or the sooner termination of the option term under Paragraph
5 or Paragraph 6 of this Agreement.
5. Accelerated Termination. The option term
specified in Paragraph 2 shall terminate (and this option shall
cease to be exercisable) prior to the Expiration Date should one
of the following provisions become applicable:
A. Except to the extent otherwise provided in
subparagraphs (ii) through (iv) below, should Optionee cease to
remain in the Service of the Company at any time during the
option term, then the period for exercising this option shall be
reduced to a three (3)-month period commencing with the date of
such cessation of Service, but in no event shall this option be
exercisable at any time after the Expiration Date. Upon the
expiration of such three (3)-month period or (if earlier) upon
the Expiration Date, this option shall terminate and cease to be
outstanding.
B. Should Optionee die while in Service or during
the three (3)-month period following Optionee's cessation of
Service, then the personal representative of the Optionee's estate
or the person or persons to whom the option is transferred pursuant
to the Optionee's will or in accordance with the law of descent and
distribution shall have the right to exercise this option. Such
right shall lapse, and this option shall cease to remain
exercisable, upon the earlier of (A) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or
(B) the Expiration Date. Upon the expiration of such twelve
(12)-month period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding.
C. Should Optionee become permanently disabled (as
defined in Section 22(e)(3) of the Internal Revenue Code) and
cease by reason thereof to remain in Service at any time during
the option term, then the Optionee shall have a period of twelve
(12) months (commencing with the date of such cessation of
Service) during which to exercise this option; provided, however,
that in no event shall this option be exercisable at any time
after the Expiration Date. Upon the expiration of such limited
period of exercisability or (if earlier) upon the Expiration
Date, this option shall terminate and cease to be outstanding.
D. Should the Optionee's Service terminate under the
circumstances specified in subparagraph (A) or (B) below, then
this option shall immediately terminate and cease to be
exercisable upon such termination of Service:
(i) The Optionee's Service is involuntarily
terminated by the Company by reason of his or her proven
dishonesty, his or her commission of any willful act of violence
to the injury of the Company, his or her breach of any fiduciary
duty owed to the Company, or his or her
2.
<PAGE>
failure to perform, in a competent manner reasonably satisfactory
to the Company, the Services for which the Optionee was retained;
or
(ii) The Optionee voluntarily terminates his
or her Service, but the Company could have involuntarily terminated
the Optionee's Service at such time for one or more of the reasons
specified in subparagraph (A) above.
The acts of misconduct specified in this subsection for
the immediate termination of this option are not intended to be,
and are accordingly not inclusive of, all acts or omissions which
the Company may deem to constitute misconduct or other grounds
for the involuntary termination of the Optionee's (or any other
individual's) Service, whether or not such other acts or
omissions would otherwise result in the termination of this
option.
E. During the limited period of exercisability
applicable in accordance with subparagraphs (i) through (iii)
above, this option may not be exercised for more than the number
of Optioned Shares (if any) for which this option is, at the time
of the Optionee's cessation of Service, exercisable in accordance
with either the normal exercise provisions specified in the Grant
Notice or the special acceleration provisions of Paragraph 6 of
this Agreement.
F. For purposes of this Paragraph 5 and for all other
purposes under this Agreement, the following definitional
provisions shall be in effect:
(i) The Optionee shall be deemed to remain in
Service for so long as the Optionee continues to render periodic
services to the Company or any parent or subsidiary corporation,
whether as an Employee, a non-employee member of the Company's
Board of Directors or an independent consultant or advisor.
(ii) The Optionee shall be deemed to be an
Employee and to continue in the Company's employ for so long as
the Optionee remains in the employ of the Company or one or more
of its parent or subsidiary corporations, subject to the control
and direction of the employer entity as to both the work to be
performed and the manner and method of performance.
(iii) A corporation shall be considered to be
a subsidiary corporation of the Company if it is a member of an
unbroken chain of corporations beginning with the Company,
provided each such corporation in the chain (other than the last
corporation) owns, at the time of determination, stock possessing
50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
3.
<PAGE>
(iv) A corporation shall be considered to
be a parent corporation of the Company if it is a member of an
unbroken chain ending with the Company, provided each such
corporation in the chain (other than the Company) owns, at the
time of determination, stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
6. Corporate Transaction.
---------------------
A. In the event of one or more of the following
transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the
Company's incorporation,
(ii) the sale, transfer or other disposition
of all or substantially all of the assets of the Company in
liquidation or dissolution of the Company, or
(iii) any reverse merger in which the Company
is the surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to holders
different from those who held such securities immediately prior
to such merger,
then this option, to the extent it is at such time outstanding
but not otherwise fully exercisable, shall automatically
accelerate so that such option shall, immediately prior to the
specified effective date for the Corporate Transaction, become
fully exercisable with respect to the Optioned Shares and may be
exercised for all or any portion of such shares. No such
acceleration of this option, however, shall occur if and to the
extent: (i) the option is, in connection with the Corporate
Transaction, to be assumed by the successor corporation or parent
thereof or replaced with a comparable option to purchase shares
of the capital stock of the successor corporation or parent
thereof or (ii) the option is to be replaced by a comparable cash
incentive program of the successor corporation based on the
option spread at the time of the Corporate Transaction (the
excess of the fair market value of the shares of Common Stock
subject to the option at such time over the Option Price payable
for such shares). The determination of comparability under
clause (i) or (ii) shall be made by the Plan Administrator, and
its determination shall be final, binding and conclusive.
B. This option, to the extent not previously
exercised, shall terminate upon the consummation of the Corporate
Transaction and cease to be exercisable, unless it is expressly
assumed by the successor corporation or parent thereof.
4.
<PAGE>
C. The exercisability of this option as an incentive
stock option under the Federal tax laws (if designated as such in
the Grant Notice) shall, in connection with any such Corporate
Transaction, be subject to the applicable dollar limitation of
Paragraph 18.
D. This Agreement shall not in any way affect the
right of the Company to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
7. Adjustment in Optioned Shares.
-----------------------------
A. In the event any change is made to the Common
Stock issuable under the Plan by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of
shares, or other change affecting the outstanding Common Stock as
a class without receipt of consideration, then appropriate
adjustments shall be made to (i) the total number of Optioned
Shares subject to this option and (ii) the Option Price payable
per share in order to reflect such change and thereby preclude a
dilution or enlargement of benefits hereunder.
B. If this option is to be assumed or is otherwise
to remain outstanding after a Corporate Transaction, then this
option shall be appropriately adjusted to apply and pertain to
the number and class of securities which would have been issuable
to the Optionee in the consummation of such Corporate Transaction
had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to
the Option Price payable per share, provided the aggregate Option
Price payable hereunder shall remain the same.
8. Privilege of Stock Ownership. The holder of
this option shall not have any of the rights of a shareholder with
respect to the Optioned Shares until such individual shall have
exercised the option, paid the Option Price for the purchased
shares and been issued a stock certificate for such shares.
9. Manner of Exercising Option.
---------------------------
A. In order to exercise this option with respect to
all or any part of the Optioned Shares for which this option is
at the time exercisable, Optionee (or in the case of exercise
after Optionee's death, the Optionee's executor, administrator,
heir or legatee, as the case may be) must take the following
actions:
(i) Execute and deliver to the Secretary of
the Company a written notice of exercise (the "Exercise Notice"),
in substantially the form of Exhibit I attached hereto, in which
there is specified the number of Optioned Shares for which the
option is exercised.
5.
<PAGE>
(ii) Pay the aggregate Option Price for the
purchased shares in one or more of the following alternative
forms:
1. full payment in cash or cash
equivalents;
2. full payment in shares of Common Stock
of the Company held by the Optionee for the requisite period
necessary to avoid a charge to the Company's earnings for
financial reporting purposes and valued at Fair Market Value on
the Exercise Date (as such terms are defined below);
3. full payment in a combination of shares
of Common Stock of the Company held by the Optionee for the
requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date and cash or cash equivalents;
4. full payment effected through a broker-
dealer sale and remittance procedure pursuant to which the
Optionee (I) shall provide irrevocable written instructions to a
designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to
cover the aggregate Option Price payable for the purchased shares
plus all applicable Federal and State income and employment taxes
required to be withheld by the Company by reason of such purchase
and (II) shall provide written directives to the Company to
deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction.
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the option
(if other than the Optionee) have the right to exercise this
option.
B. For purposes of this Agreement, the Fair Market
Value of a share of Common Stock on any relevant date shall be
determined in accordance with subparagraphs (i) and (ii) below,
and the Exercise Date shall be the date on which the executed
Exercise Notice is delivered to the Company. Except to the
extent the sale and remittance procedure specified above is
utilized for the exercise of the option, payment of the Option
Price for the purchased shares must accompany the Exercise
Notice. The procedure for measuring Fair Market Value shall be
as follows:
(i) If the Common Stock is not at the time
listed or admitted to trading on any national stock exchange but
is traded on the over-the-counter market, the Fair Market Value
shall be the mean between the highest bid and lowest asked prices
(or, if such information is available, the closing selling price)
per share of Common Stock on the date in question on the over-
the-counter market, as such prices are reported by the National
Association of Securities Dealers through its NASDAQ
6.
<PAGE>
system or any successor system. If there are no reported bid and
asked prices (or closing selling price) for the Common Stock on the
date in question, then the mean between the highest bid price and
lowest asked price (or the closing selling price) on the last
preceding date for which such quotations exist shall be
determinative of Fair Market Value.
(ii) If the Common Stock is not at the time
listed or admitted to trading on any national stock exchange,
then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the stock
exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there
is no reported sale of Common Stock on such exchange on the date
in question, then the Fair Market Value shall be the closing
selling price on the exchange on the last preceding date for
which such quotation exists.
C. As soon after the Exercise Date as practical, the
Company shall mail or deliver to Optionee (or to any other person
or persons exercising this option) a certificate or certificates
representing the shares so purchased and paid for, with the
appropriate legends affixed thereto.
D. In no event may this option be exercised for any
fractional shares.
10. Compliance with Laws and Regulations.
------------------------------------
A. The exercise of this option and the issuance of
the Optioned Shares upon such exercise shall be subject to
compliance by the Company and the Optionee with all applicable
requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's
Common Stock may be listed at the time of such exercise and
issuance.
B. In connection with the exercise of this option,
Optionee shall execute and deliver to the Company such
representations in writing as may be requested by the Company in
order for it to comply with the applicable requirements of federal
and state securities laws.
11. Successors and Assigns. Except to the extent
otherwise provided in Paragraph 3 or 6, the provisions of this
Agreement shall insure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and
assigns of Optionee and the successors and assigns of the
Company.
12. Liability of Company.
--------------------
A. If the Optioned Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common
Stock which may without shareholder
7.
<PAGE>
approval be issued under the Plan, then this option shall be void
with respect to such excess shares, unless shareholder approval
of an amendment sufficiently increasing the number of shares of
Common Stock issuable under the Plan is obtained in accordance
with the provisions of Article 4, Section III of the Plan.
B. The inability of the Company to obtain approval
from any regulatory body having authority deemed by the Company
to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Company of any
liability with respect to the non-issuance or sale of the Common
Stock as to which such approval shall not have been obtained.
The Company, however, shall use its best efforts to obtain all
such approvals.
13. No Employment or Service Contract. Nothing in
this Agreement or in the Plan shall confer upon the Optionee any
right to continue in the Service of the Company (or any parent or
subsidiary corporation of the Company employing or retaining
Optionee) for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Company (or
any parent or subsidiary corporation of the Company employing or
retaining Optionee) or the Optionee, which rights are hereby
expressly reserved by each, to terminate the Optionee's Service
at any time for any reason whatsoever, with or without cause.
14. Notices. Any notice required to be given or
delivered to the Company under the terms of this Agreement shall
be in writing and addressed to the Company in care of the
Corporate Secretary at the Company's principal corporate offices.
Any notice required to be given or delivered to Optionee shall be
in writing and addressed to Optionee at the address indicated
below Optionee's signature line on the Grant Notice. All notices
shall be deemed to have been given or delivered upon personal
delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.
15. Construction. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and
are in all respects limited by and subject to the express terms
and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under
the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
16. Governing Law. The interpretation, performance,
and enforcement of this Agreement shall be governed by the laws
of the State of Maryland without resort to that State's conflict-
of-laws rules.
17. Additional Terms Applicable to an Incentive Stock
Option. In the event this option is designated as an incentive
stock option in the Grant Notice, the following terms and
conditions shall also apply to the grant:
8.
<PAGE>
A. This option shall cease to qualify for favorable
tax treatment as an incentive stock option under the Federal tax
laws if (and to the extent) this option is exercised for one or
more Optioned Shares: (i) more than three (3) months after the
date the Optionee ceases to be an Employee for any reason other
than death or permanent disability (as defined in Paragraph 5) or
(ii) more than one (1) year after the date the Optionee ceases to
be an Employee by reason of permanent disability.
B. No installment under this option (whether annual
or monthly) shall qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the
extent) the aggregate fair market value (determined at the Grant
Date) of the Common Stock for which such installment first
becomes exercisable hereunder will, when added to the aggregate
fair market value (determined as of the respective date or dates
of grant) of any earlier installments of Common Stock for which
this option or any other post-1986 incentive stock options
granted to the Optionee prior to the Grant Date (whether under
the Plan or any other option plan of the Company or any parent or
subsidiary corporations) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate.
C. Should the exercisability of this option be
accelerated upon a Corporate Transaction, then this option shall
qualify for favorable tax treatment as an incentive stock option
under the Federal tax laws only to the extent the aggregate fair
market value (determined at the Grant Date) of the Common Stock
for which this option first becomes exercisable at the time the
Corporate Transaction occurs does not, when added to the
aggregate fair market value (determined as of the respective date
or dates of grant) of any earlier installments of Common Stock
for which this option or any other post-1986 incentive stock
options granted to the Optionee prior to the Grant Date (whether
under the Plan or any other option plan of the Company or any
parent or subsidiary corporations) first become exercisable
during the calendar year in which the Corporate Transaction
occurs, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate.
D. To the extent this option should fail to qualify
as an incentive stock option under the Federal tax laws, the
Optionee will recognize compensation income in connection with
the acquisition of one or more Optioned Shares hereunder, and the
Optionee must make appropriate arrangements for the satisfaction
of all Federal, State or local income tax withholding
requirements and Federal social security employee tax
requirements applicable to such compensation income.
18. Additional Terms Applicable to a Non-Statutory
Stock Option. In the event this option is designated as a non-
statutory stock option in the Grant Notice, Optionee hereby
agrees to make appropriate arrangements with the Company or
parent or subsidiary corporation employing Optionee for the
satisfaction of any Federal, State or local income tax withholding
requirements and Federal social security employee tax requirements
applicable to the exercise of this option.
9.
<PAGE>
19. Limited Stock Appreciation Right. Optionee is
hereby granted a limited stock appreciation right, exercisable
upon the terms and conditions set forth below:
A. The stock appreciation right shall under no
circumstances become exercisable until this option has been
outstanding for a period of at least six (6) months measured from
the Grant Date of this option.
B. Provided (i) the Optionee is at the time an
officer or director of the Company subject to the short-swing
profit restrictions of the Federal securities laws and (ii) one
or more classes of the Company's equity securities are at such
time registered under Section 12(g) of the Securities Exchange
Act of 1934 (as amended), then this option (if outstanding at
such time) shall automatically be cancelled upon the effective
date of a Hostile Take-Over, and the Optionee shall, in exchange,
receive a cash distribution from the Company. Such distribution
shall be in an amount equal to the excess of (i) the Take-Over
Price of the shares of Common Stock at the time subject to this
option (whether or not the option is at the time otherwise
exercisable for such shares) over (ii) the aggregate Option Price
payable for such shares. The cash distribution shall be made to
the Optionee within five (5) days following the effective date of
the Hostile Take-Over, and neither the approval of the Plan
Administrator nor the consent of the Company's Board of Directors
shall be required in connection with such cancellation and
distribution. For purposes of such distribution, the following
definitional provisions shall be in effect:
- A Hostile Take-Over shall be deemed to occur in the
event (i) any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company)
acquires ownership of securities possessing more than forty
percent (40%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer
which the Board does not recommend the Company's shareholders to
accept and (ii) more than fifty percent (50%) of the securities
so acquired in such tender or exchange offer are accepted from
holders other than officers and directors of the Company who
participate in this Plan.
- The Take-Over Price per share shall be deemed to be
equal to the greater of (a) the Fair Market Value per share of
Common Stock on the date of the Hostile Take-Over or (b) the
highest reported price per share paid in effecting the Hostile
Take-Over. However, if the cancelled option is an Incentive
Stock Option as specified in the Grant Notice, then the Take-Over
Price of the shares subject to the cancelled option shall not
exceed the value per share determined under clause (a) above.
10.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Oncor, Inc. (the "Company") that I
elect to purchase __________________ shares of the Company's
Common Stock (the "Purchased Shares") pursuant to that certain
option (the "Option") granted to me on __________________, 199__
to purchase up to ____________ shares of such Common Stock at an
option price of $______________ per share (the "Option Price").
Concurrently with the delivery of this Exercise Notice
to the Secretary of the Company, I shall pay to the Company the
Option Price for the Purchased Shares in accordance with the
provisions of my agreement with the Company evidencing the Option
and shall deliver whatever additional documents may be required
by such agreement as a condition for exercise.
___________________________ _______________________________
Date Optionee
Address: _______________________________
_______________________________
Print name in exact manner
it is to appear on the
stock certificate:
_______________________________
_______________________________
Address to which certificate
is to be sent, if different
from address above:
_______________________________
_______________________________
Social Security Number: __________________________
12.
EXHIBIT 99.4
Form of Notice of Grant of Non-Employee
Director Automatic Stock Option
AUTOMATIC OPTION GRANT
ONCOR, INC.
-----------
NON-STATUTORY STOCK OPTION AGREEMENT
------------------------------------
AGREEMENT made this _______ day of _________________,
199__ by and between Oncor, Inc., a corporation organized and
existing under the laws of the State of Maryland (the "Company"),
and ________________________________________ (the "Optionee").
WITNESSETH:
----------
RECITALS
- --------
A. The Company's Board of Directors (the "Board") has
adopted the Company's 1992 Stock Option Plan (the "Plan") for the
purpose of attracting and retaining the services of employees,
consultants and non-employee Board members who contribute to the
management, growth and financial success of the Company or its
parent or subsidiary corporations.
B. Optionee is a non-employee Board member who is
entitled to receive an option to acquire shares of the Company's
common stock (the "Common Stock") pursuant to the automatic
option grant program implemented for non-employee Board members
under the Plan. This Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection
with the automatic option grant made to such Optionee thereunder.
C. The granted option is intended to be a non-
statutory stock option which does not satisfy the requirements of
Section 422 of the Internal Revenue Code.
D. For purposes of this Agreement, the following
definitions shall be in effect:
Board Member: The Optionee shall be deemed to be a Board
Member for so long as such individual continues to serve as a
member of the Company's Board of Directors.
Fair Market Value: The Fair Market Value per share of
Common Stock on any date in question shall be determined in
accordance with the following provisions:
<PAGE>
(i) If the Common Stock is not at the time listed
or admitted to trading on any stock exchange but is traded on the
over-the-counter market, the fair market value shall be the mean
between the highest bid and lowest asked prices (or, if such
information is available, the closing selling price) per share of
Common Stock on the date in question on the over-the-counter
market, as such prices are reported by the National Association
of Securities Dealers through its NASDAQ system or any successor
system. If there are no reported bid and asked prices (or
closing selling price) on the date in question, then the mean
between the highest bid price and lowest asked price (or the
closing selling price) on the last preceding date for which such
quotations exist shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market
value shall be the closing selling price per share of Common
Stock on the date in question on the stock exchange serving as
the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market value
shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.
TERMS
- -----
1. GRANT OF OPTION. Pursuant to the provisions of
Article Three of the Plan, there is hereby automatically granted
to Optionee, on ____________________, 199__ (the "Grant Date"),
a stock option to purchase up to 50,000 shares of Common Stock
(the "Option Shares") upon the terms and conditions set forth in
this Agreement and in the Plan (including Article Three thereof).
The Option Shares shall be purchasable in accordance with such
terms and conditions at the purchase price of $__________ per
share (the "Option Price").
2. OPTION TERM. This option shall have a maximum
term of five (5) years measured from the Grant Date and shall
accordingly expire at the close of business on _______________,
199__ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 5 or 7A of this Agreement.
3. LIMITED TRANSFERABILITY. This option shall not be
transferable or assignable by Optionee other than by will or by
the laws of inheritance following the Optionee's death.
Accordingly, this option may be exercised, during Optionee's
lifetime, only by Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this option, and
any levy of execution, attachment or similar process on this
option, shall be null and void.
2.
<PAGE>
4. EXERCISABILITY. This option shall become
exercisable in four (4) installments as follows:
(i) The option shall become exercisable for
twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of six (6) months of continuous service as
a Board Member measured from the Grant Date.
(ii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon
the Optionee's completion of eighteen (18) months of continuous
service as a Board Member measured from the Grant Date.
(iii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon
the Optionee's completion of thirty (30) months of continuous
service as a Board Member measured from the Grant Date.
(iv) The option shall become exercisable for the
remaining twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of forty-two (42) months of continuous
service as a Board Member measured from the Grant Date.
Once this option becomes exercisable for one or more
installments of the Option Shares, those installments shall
accumulate, and this option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or Paragraph 7A
of this Agreement.
5. CESSATION OF BOARD MEMBERSHIP. Should the
Optionee's service as a Board Member cease while this option
remains outstanding, then the option term specified in Paragraph
2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date in accordance with the following
provisions:
(i) Should the Optionee cease service as a Board
Member for any reason (other than death) while holding this
option, then the period for exercising this option shall be
reduced to the twelve (12)-month period commencing with the date
of such cessation of service. During such limited period of
exercisability, this option may not be exercised for more than
the number of Option Shares (if any) for which it is exercisable
on the date the Optionee ceased service as a Board Member. Upon
the expiration of such twelve (12)-month period, the option shall
terminate and cease to be exercisable.
3.
<PAGE>
(ii) Should the Optionee die while serving as a
Board Member, then the personal representative of the Optionee's
estate (or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with
the laws of inheritance) shall have the right to exercise this
option for any or all of the Option Shares for which this option
is exercisable on the date the Optionee ceased service as a Board
Member. Such right shall lapse, and this option shall cease to
be exercisable, upon the expiration of the twelve (12)-month
period measured from the date of Optionee's death.
(iii) In no event may this option be exercised at
any time after the specified Expiration Date.
6. ADJUSTMENT IN OPTION SHARES. In the event any
change is made to the Company's outstanding Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without receipt
of consideration by the Company, appropriate adjustments shall
automatically be made to the class and/or number of securities
subject to this option and the Option Price payable per share in
order to reflect such transaction or change and thereby preclude
the dilution or enlargement of benefits hereunder.
7. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE
-----------------------------------------------
TAKE-OVER.
- ---------
A. In the event of any of the following stockholder-
approved transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the
Company's incorporation,
(ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company in
liquidation or dissolution of the Company, or
(iii) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to holders
different from those who held such securities immediately prior
to such merger,
this option (if outstanding at the time) shall
automatically accelerate so that such option shall, immediately
prior to the specified effective date for the Corporate
4.
<PAGE>
Transaction, become fully exercisable for all of the Option
Shares and may be exercised for all or any portion of such
shares. Upon the consummation of the Corporate Transaction, this
option shall terminate and cease to be outstanding.
B. Should there occur any Change in Control of the
Company, then this option (if outstanding at the time) shall
automatically accelerate so that such option shall, immediately
prior to the specified effective date for the Change in Control,
become fully exercisable for all the Option Shares and may be
exercised for all or any portion of such shares at any time prior
to the Expiration Date or sooner termination of the option term
under Paragraph 5 or Paragraph 7A of this Agreement. For
purposes of this Agreement, a Change in Control shall be deemed
to occur in the event:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of securities possessing more than forty
percent (40%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer
which the Board does not recommend the Company's stockholders to
accept; or
(ii) there is a change in the composition of the
Board over a period of twenty-four (24) consecutive months or
less such that a majority of the Board members (rounded up to the
next whole number) cease, by reason of one or more proxy contests
for the election of Board members, to be comprised of individuals
who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least two-
thirds of the Board members described in clause (A) who were
still in office at the time such election or nomination was
approved by the Board.
C. Should a Hostile Take-Over of the Company occur at
any time after this option has been outstanding for a period of
at least six (6) months measured from the Grant Date, then this
option (if outstanding at the time) shall automatically be
cancelled upon the effective date of such Hostile Take-Over, and
the Optionee shall, in exchange, receive a cash distribution from
the Company. Such distribution shall be in an amount equal to
the excess of (i) the Take-Over Price of the shares of Common
Stock at the time subject to this option (whether or not the
option is at the time otherwise exercisable for such shares) over
(ii) the aggregate Option Price payable for such shares. The
cash distribution shall be made to the Optionee within five (5)
days following the effective date of the Hostile Take-Over, and
neither the approval of the Plan Administrator nor the consent of
the Board shall be required in connection with such cancellation
and distribution. For purposes of this Paragraph 7C, the
following definitional provisions shall be in effect:
5.
<PAGE>
A Hostile Take-Over shall be deemed to occur in
the event (i) any person or related group of persons (other than
the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than forty percent (40%)
of the total combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer which the Board
does not recommend the Company's stockholders to accept and (ii)
more than fifty percent (50%) of the securities so acquired in
such tender or exchange offer are accepted from holders other
than officers and directors of the Company who participate in
this Plan.
The Take-Over Price per share shall be deemed to be
equal to the greater of (a) the Fair Market Value per share of
Common Stock on the date of cancellation or (b) the highest
reported price per share paid in effecting the Hostile Take-Over.
D. This Agreement shall not in any way affect the
right of the Company to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
8. PRIVILEGE OF STOCK OWNERSHIP. Optionee shall not
have any stockholder rights with respect to the Option Shares
until such individual shall have exercised the option, paid the
Option Price for the purchased shares and been issued a stock
certificate for such shares.
9. MANNER OF EXERCISING OPTION.
---------------------------
A. In order to exercise this option for one or more
Option Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, the
Optionee's executor, administrator, heir or legatee, as the case
may be) must take the following actions:
(i) Execute and deliver to the Secretary of the
Company a written notice of exercise (the "Exercise Notice"), in
substantially the form of Exhibit I attached hereto, in which
there is specified the number of Option Shares for which the
option is exercised.
(ii) Pay the aggregate Option Price for the
purchased shares in one or more of the following alternative
forms:
6.
<PAGE>
- full payment in cash or check made payable
to the Company's order;
- full payment in shares of Common Stock held
by the Optionee for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date;
- full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date and cash or
check payable to the Company's order; or
- full payment through a broker-dealer sale
and remittance procedure pursuant to which the Optionee (I) shall
provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares and
(II) shall provide written directives to the Company to deliver
the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date
shall be the date on which the Exercise Notice shall have been
delivered to the Company. Except to the extent the sale and
remittance procedure specified above may be utilized to exercise
this option, payment of the Option Price for the purchased shares
must accompany such notice.
C. As soon as practical after the exercise of this
option in accordance with the provisions of this Agreement, the
Company shall mail or deliver to Optionee (or to the other person
or persons exercising this option) a stock certificate
representing the purchased shares.
D. In no event may this option be exercised for any
fractional shares.
10. LEGALITY OF ISSUANCE. The Company shall not be
obligated to sell or issue any Option Shares pursuant to this
Agreement if such sale or issuance might, in the
7.
<PAGE>
opinion of the Company and the Company's counsel, constitute a
violation by the Company of any applicable law or regulation.
11. BINDING EFFECT. Subject to the limitations set
forth in Paragraph 3 of this Agreement, this Agreement shall be
binding upon, and shall inure to the benefit of, (i) the
executors, administrators, heirs, legal representatives and
assigns of the Optionee and (ii) the successors and assigns of
the Company.
12. NO IMPAIRMENT OF RIGHTS. Nothing in this
Agreement or in the Plan shall be deemed to impair or otherwise
restrict the rights of the Company or the stockholders to remove
the Optionee from the Board at any time pursuant to the
provisions of applicable law.
13. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Maryland applicable to contracts entered into and wholly to be
performed within the State of Maryland by residents of such
State.
14. NOTICES. All notices and other communications
under this Agreement shall be in writing. Unless and until the
Optionee is notified in writing to the contrary, all notices,
communications and documents directed to the Company and related
to this Agreement, if not delivered by hand, shall be mailed,
addressed as follows:
Oncor, Inc.
209 Perry Parkway
Gaithersburg, Maryland 20877
Unless and until the Company is notified in writing
to the contrary, all notices, communications and documents intended
for the Optionee and related to this Agreement, if not delivered
by hand, shall be mailed to Optionee's last known address as shown
on the Company's books.
Notices and communications shall be mailed by
first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All
mailings and deliveries related to this Agreement shall be deemed
received only when actually received, unless properly mailed by
registered mail, return receipt requested, in which event they
shall be deemed received two days after the date of mailing.
15. CONSTRUCTION. This Agreement and the option
evidenced hereby are issued pursuant to the automatic grant
program for non-employee Board members in effect under Article
Three of the Plan and shall be subject to the express terms and
provisions of the Plan applicable to such automatic grants. Such
terms and provisions are hereby incorporated into this Agreement
and made a part hereof as if expressly included in this
Agreement.
8.
<PAGE>
16. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option shall
not become exercisable in whole or in part, whether in accordance
with the normal exercise provisions of Paragraph 4 or the special
acceleration provisions of Paragraphs 7A and 7B, nor shall this
option be eligible for cancellation pursuant to the cash-out
distribution provisions of Paragraph 7C, unless and until the
Plan, including the automatic option grant program pursuant to
which this option grant has been issued, is approved by the
Company's stockholders. If such stockholder approval is not
obtained prior to ____________________________________, 1992,
then this option shall terminate and cease to be outstanding,
without ever becoming exercisable for any of the Option Shares.
Should any Corporate Transaction, Change in Control or Hostile
Take-Over be effected prior to stockholder approval of the Plan,
then this option shall terminate upon the effective date of such
event and shall not be eligible either for acceleration under
Paragraphs 7A or 7B or for cash-out under Paragraph 7C.
IN WITNESS WHEREOF, Oncor, Inc. has caused this
Agreement to be executed on its behalf by its duly-authorized
officer and the Optionee has executed this Agreement, all on the
day and year first above written.
ONCOR, INC.
By ________________________________
Title _____________________________
__________________________________
OPTIONEE
Address____________________________
___________________________________
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
----------------------------------
I hereby notify Oncor, Inc. (the "Company") that I
elect to purchase __________ shares of the Company's Common Stock
(the "Purchased Shares") pursuant to that certain option (the
"Option") granted to me on _______________, 199__ to purchase up
to 50,000 shares of such Common Stock at an option price of
$________________ per share (the "Option Price").
Concurrently with the delivery of this Exercise Notice
to the Secretary of the Company, I shall pay to the Company the
Option Price for the Purchased Shares in accordance with the
provisions of my agreement with the Company evidencing the Option
and shall deliver whatever additional documents may be required
by such agreement as a condition for exercise.
_________________________ ____________________________
Date Optionee
Address: ____________________________
____________________________
Print name in exact manner
it is to appear on the
stock certificate:
____________________________
____________________________
Address to which certificate
is to be sent, if different
from address above:
____________________________
____________________________
Social Security Number: __________________________
EXHIBIT 99.5
Form of Non-Employee Director Automatic Stock Option Agreement
AUTOMATIC OPTION GRANT
ONCOR, INC.
-----------
NON-STATUTORY STOCK OPTION AGREEMENT
------------------------------------
AGREEMENT made this _____ day of__________________,
199__ by and between Oncor, Inc., a corporation organized and
existing under the laws of the State of Maryland (the "Company"),
and ____________________________ (the "Optionee").
WITNESSETH:
RECITALS
A. The Company's Board of Directors (the "Board") has
adopted the Company's 1992 Stock Option Plan (the "Plan") for the
purpose of attracting and retaining the services of employees,
consultants and non-employee Board members who contribute to the
management, growth and financial success of the Company or its
parent or subsidiary corporations.
B. Optionee is a non-employee Board member who is
entitled to receive an option to acquire shares of the Company's
common stock (the "Common Stock") pursuant to the automatic
option grant program implemented for non-employee Board members
under the Plan. This Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection
with the automatic option grant made to such Optionee thereunder.
C. The granted option is intended to be a
non-statutory stock option which does not satisfy the requirements
of Section 422 of the Internal Revenue Code.
D. For purposes of this Agreement, the following
definitions shall be in effect:
Board Member: The Optionee shall be deemed to be a Board
Member for so long as such individual continues to serve as a
member of the Company's Board of Directors.
Fair Market Value: The Fair Market Value per share of
Common Stock on any date in question shall be determined in
accordance with the following provisions:
<PAGE>
(i) If the Common Stock is not at the time listed
or admitted to trading on any stock exchange but is traded on the
over-the-counter market, the fair market value shall be the mean
between the highest bid and lowest asked prices (or, if such
information is available, the closing selling price) per share of
Common Stock on the date in question on the over-the-counter
market, as such prices are reported by the National Association
of Securities Dealers through its NASDAQ system or any successor
system. If there are no reported bid and asked prices (or closing
selling price) on the date in question, then the mean between the
highest bid price and lowest asked price (or the closing selling
price) on the last preceding date for which such quotations exist
shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market
value shall be the closing selling price per share of Common
Stock on the date in question on the stock exchange serving as
the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market value
shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.
TERMS
1. GRANT OF OPTION. Pursuant to the provisions of
Article Three of the Plan, there is hereby automatically granted
to Optionee, on , 199 (the "Grant Date"), a stock option to
purchase up to 50,000 shares of Common Stock (the "Option
Shares") upon the terms and conditions set forth in this
Agreement and in the Plan (including Article Three thereof). The
Option Shares shall be purchasable in accordance with such terms
and conditions at the purchase price of $ _______ per share (the
"Option Price").
2. OPTION TERM. This option shall have a maximum term
of five (5) years measured from the Grant Date and shall
accordingly expire at the close of business on _______, 199__
(the "Expiration Date"), unless sooner terminated in accordance
with Paragraph 5 or 7A of this Agreement.
3. LIMITED TRANSFERABILITY. This option shall not be
transferable or assignable by Optionee other than by will or by
the laws of inheritance following the Optionee's death.
Accordingly, this option may be exercised, during Optionee's
lifetime, only by Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this option, and
any levy of execution, attachment or similar process on this
option, shall be null and void.
2.
<PAGE>
4. EXERCISABILITY. This option shall become
exercisable in four (4) installments as follows:
(i) The option shall become exercisable for
twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of six (6) months of continuous service as
a Board Member measured from the Grant Date.
(ii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon
the Optionee's completion of eighteen (18) months of continuous
service as a Board Member measured from the Grant Date.
(iii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon
the Optionee's completion of thirty (30) months of continuous
service as a Board Member measured from the Grant Date.
(iv) The option shall become exercisable for the
remaining twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of forty-two (42) months of continuous
service as a Board Member measured from the Grant Date.
Once this option becomes exercisable for one or more
installments of the Option Shares, those installments shall
accumulate, and this option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or Paragraph 7A
of this Agreement.
5. CESSATION OF BOARD MEMBERSHIP. Should the
Optionee's service as a Board Member cease while this option
remains outstanding, then the option term specified in Paragraph
2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date in accordance with the following
provisions:
(i) Should the Optionee cease service as a Board
Member for any reason (other than death) while holding this
option, then the period for exercising this option shall be
reduced to the twelve (12)-month period commencing with the date
of such cessation of service. During such limited period of
exercisability, this option may not be exercised for more than
the number of Option Shares (if any) for which it is exercisable
on the date the Optionee ceased service as a Board Member. Upon
the expiration of such twelve (12)-month period, the option shall
terminate and cease to be exercisable.
3.
<PAGE>
(ii) Should the Optionee die while serving as a
Board Member, then the personal representative of the Optionee's
estate (or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with
the laws of inheritance) shall have the right to exercise this
option for any or all of the Option Shares for which this option
is exercisable on the date the Optionee ceased service as a Board
Member. Such right shall lapse, and this option shall cease to be
exercisable, upon the expiration of the twelve (12)-month period
measured from the date of Optionee's death.
(iii) In no event may this option be exercised at
any time after the specified Expiration Date.
6. ADJUSTMENT IN OPTION SHARES. In the event any
change is made to the Company's outstanding Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without receipt
of consideration by the Company, appropriate adjustments shall
automatically be made to the class and/or number of securities
subject to this option and the Option Price payable per share in
order to reflect such transaction or change and thereby preclude
the dilution or enlargement of benefits hereunder.
7. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE
TAKE-OVER.
A. In the event of any of the following stockholder-
approved transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the
Company's incorporation,
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company in liquidation or
dissolution of the Company, or
(iii) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to holders
different from those who held such securities immediately prior
to such merger,
this option (if outstanding at the time) shall
automatically accelerate so that such option shall, immediately
prior to the specified effective date for the Corporate
4.
<PAGE>
Transaction, become fully exercisable for all of the Option
Shares and may be exercised for all or any portion of such
shares. Upon the consummation of the Corporate Transaction, this
option shall terminate and cease to be outstanding.
B. Should there occur any Change in Control of the
Company, then this option (if outstanding at the time) shall
automatically accelerate so that such option shall, immediately
prior to the specified effective date for the Change in Control,
become fully exercisable for all the Option Shares and may be
exercised for all or any portion of such shares at any time prior
to the Expiration Date or sooner termination of the option term
under Paragraph 5 or Paragraph 7A of this Agreement. For purposes
of this Agreement, a Change in Control shall be deemed to occur
in the event:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of securities possessing more than forty
percent (40%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer
which the Board does not recommend the Company's stockholders to
accept; or
(ii) there is a change in the composition of the
Board over a period of twenty-four (24) consecutive months or
less such that a majority of the Board members (rounded up to the
next whole number) cease, by reason of one or more proxy contests
for the election of Board members, to be comprised of individuals
who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least
two-thirds of the Board members described in clause (A) who were
still in office at the time such election or nomination was
approved by the Board.
C. Should a Hostile Take-Over of the Company occur at
any time after this option has been outstanding for a period of
at least six (6) months measured from the Grant Date, then this
option (if outstanding at the time) shall automatically be
cancelled upon the effective date of such Hostile Take-Over, and
the Optionee shall, in exchange, receive a cash distribution from
the Company. Such distribution shall be in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock
at the time subject to this option (whether or not the option is
at the time otherwise exercisable for such shares) over (ii) the
aggregate Option Price payable for such shares. The cash
distribution shall be made to the Optionee within five (5) days
following the effective date of the Hostile Take-Over, and
neither the approval of the Plan Administrator nor the consent of
the Board shall be required in connection with such cancellation
and distribution. For purposes of this Paragraph 7C, the
following definitional provisions shall be in effect:
5.
<PAGE>
A Hostile Take-Over shall be deemed to occur in the
event (i) any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than forty percent (40%)
of the total combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer which the Board
does not recommend the Company's stockholders to accept and (ii)
more than fifty percent (50%) of the securities so acquired in
such tender or exchange offer are accepted from holders other
than officers and directors of the Company who participate in
this Plan.
The Take-Over Price per share shall be deemed to be
equal to the greater of (a) the Fair Market Value per share of
Common Stock on the date of cancellation or (b) the highest
reported price per share paid in effecting the Hostile Take-Over.
D. This Agreement shall not in any way affect the
right of the Company to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
8. PRIVILEGE OF STOCK OWNERSHIP. Optionee shall not
have any stockholder rights with respect to the Option Shares
until such individual shall have exercised the option, paid the
Option Price for the purchased shares and been issued a stock
certificate for such shares.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option for one or more
Option Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, the
Optionee's executor, administrator, heir or legatee, as the case
may be) must take the following actions:
(i) Execute and deliver to the Secretary of the
Company a written notice of exercise (the "Exercise Notice"), in
substantially the form of Exhibit I attached hereto, in which
there is specified the number of Option Shares for which the
option is exercised.
(ii) Pay the aggregate Option Price for the
purchased shares in one or more of the following alternative
forms:
6.
<PAGE>
- full payment in cash or check made payable to
the Company's order;
- full payment in shares of Common Stock held
by the Optionee for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date;
- full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date and cash or
check payable to the Company's order; or
- full payment through a broker-dealer sale
and remittance procedure pursuant to which the Optionee (I) shall
provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares and (II)
shall provide written directives to the Company to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date
shall be the date on which the Exercise Notice shall have been
delivered to the Company. Except to the extent the sale and
remittance procedure specified above may be utilized to exercise
this option, payment of the Option Price for the purchased shares
must accompany such notice.
C. As soon as practical after the exercise of this
option in accordance with the provisions of this Agreement, the
Company shall mail or deliver to Optionee (or to the other person
or persons exercising this option) a stock certificate
representing the purchased shares.
D. In no event may this option be exercised for any
fractional shares.
10. LEGALITY OF ISSUANCE. The Company shall not be
obligated to sell or issue any Option Shares pursuant to this
Agreement if such sale or issuance might, in the
7.
<PAGE>
opinion of the Company and the Company's counsel, constitute a
violation by the Company of any applicable law or regulation.
11. BINDING EFFECT. Subject to the limitations set
forth in Paragraph 3 of this Agreement, this Agreement shall be
binding upon, and shall inure to the benefit of, (i) the
executors, administrators, heirs, legal representatives and
assigns of the Optionee and (ii) the successors and assigns of
the Company.
12. NO IMPAIRMENT OF RIGHTS. Nothing in this Agreement
or in the Plan shall be deemed to impair or otherwise restrict the
rights of the Company or the stockholders to remove the Optionee
from the Board at any time pursuant to the provisions of applicable
law.
13. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Maryland
applicable to contracts entered into and wholly to be performed
within the State of Maryland by residents of such State.
14. NOTICES. All notices and other communications
under this Agreement shall be in writing. Unless and until the
Optionee is notified in writing to the contrary, all notices,
communications and documents directed to the Company and related
to this Agreement, if not delivered by hand, shall be mailed,
addressed as follows:
Oncor, Inc.
209 Perry Parkway
Gaithersburg, Maryland 20877
Unless and until the Company is notified in
writing to the contrary, all notices, communications and
documents intended for the Optionee and related to this
Agreement, if not delivered by hand, shall be mailed to
Optionee's last known address as shown on the Company's books.
Notices and communications shall be mailed by
first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All
mailings and deliveries related to this Agreement shall be deemed
received only when actually received, unless properly mailed by
registered mail, return receipt requested, in which event they
shall be deemed received two days after the date of mailing.
15. CONSTRUCTION. This Agreement and the option
evidenced hereby are issued pursuant to the automatic grant
program for non-employee Board members in effect under Article
Three of the Plan and shall be subject to the express terms and
provisions of the Plan applicable to such automatic grants. Such
terms and provisions are hereby incorporated into this Agreement
and made a part hereof as if expressly included in this
Agreement.
8.
<PAGE>
16. STOCKHOLDER APPROVAL. Notwithstanding any
provision to the contrary in this Agreement, this option shall
not become exercisable in whole or in part, whether in accordance
with the normal exercise provisions of Paragraph 4 or the special
acceleration provisions of Paragraphs 7A and 7B, nor shall this
option be eligible for cancellation pursuant to the cash-out
distribution provisions of Paragraph 7C, unless and until the
Plan, including the automatic option grant program pursuant to
which this option grant has been issued, is approved by the
Company's stockholders. If such stockholder approval is not
obtained prior to ____________________________________, 1992,
then this option shall terminate and cease to be outstanding,
without ever becoming exercisable for any of the Option Shares.
Should any Corporate Transaction, Change in Control or Hostile
Take-Over be effected prior to stockholder approval of the Plan,
then this option shall terminate upon the effective date of such
event and shall not be eligible either for acceleration under
Paragraphs 7A or 7B or for cash-out under Paragraph 7C.
IN WITNESS WHEREOF, Oncor, Inc. has caused this
Agreement to be executed on its behalf by its duly-authorized
officer and the Optionee has executed this Agreement, all on the
day and year first above written.
ONCOR, INC.
By ___________________________
Title _______________________
------------------------------
OPTIONEE
Address ______________________
------------------------------
9.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Oncor, Inc. (the "Company") that I
elect to purchase ________ shares of the Company's Common Stock
(the "Purchased Shares") pursuant to that certain option (the
"Option") granted to me on ________________, 199___ to purchase
up to 50,000 shares of such Common Stock at an option price of
$____________ per share (the "Option Price").
Concurrently with the delivery of this Exercise Notice
to the Secretary of the Company, I shall pay to the Company the
Option Price for the Purchased Shares in accordance with the
provisions of my agreement with the Company evidencing the Option
and shall deliver whatever additional documents may be required
by such agreement as a condition for exercise.
- ------------------ -------------------------
Date Optionee
Address: _________________________
-------------------------
Print name in exact manner it is to appear on the
stock certificate:
--------------------------
--------------------------
Address to which certificate is to be sent, if
different from address above:
-------------------------
-------------------------
Social Security Number: _________________________
