NOBEL LEARNING COMMUNITIES, INC.
Incentive Stock Option Agreement
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Incentive Stock Option Agreement dated as of __________ ("Agreement")
between Nobel Learning Communities, Inc., a Delaware corporation (the
"Company"), and ______________ ("Employee").
1. Definitions
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1.1 "Change in Control" shall have the meaning set forth in Section 12 of
the Plan, as the same may be amended from time to time (except that no such
amendment shall have the effect of making this definition more restrictive than
prior to such amendment).
1.2 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.3 "Committee" means the Compensation Committee appointed by the Board of
Directors of the Company to administer the Plan.
1.4 "Common Stock" means the Company's Common Stock, par value $0.001 per
share.
1.5 "Date of Exercise" means the date on which the notice required by
Section 4.1 is received by the Company.
1.6 "Date of Grant" means ______________.
1.7 "Fair Market Value" shall mean the value of the Common Stock arrived
at by a good faith determination of the Committee and shall be:
(a) The mean between the highest and lowest quoted selling price, if
there is a market for the Common Stock on a registered securities exchange
or in an over the counter market, on the date specified;
(b) The weighted average of the means between the highest and lowest
sales on the nearest date before and the nearest date after the specified
date, if there are no such sales on the specified date but there are such
sales on dates within a reasonable period both before and after the
specified date (determined as set forth in Section 7(a) of the Plan);
(c) The mean between the bid and asked prices, as reported by the
National Quotation Bureau on the specified date, if actual sales are not
available during a reasonable period beginning before and ending after the
specified date; or
(d) Such other method of determining Fair Market Value as shall
be authorized by the Code, or the rules or regulations thereunder, and
adopted by the Committee.
1.8. "Option" means the option granted hereunder. The Option hereby
granted is intended to be an "incentive stock option" within the meaning of
section 422 of the Code.
1.9. "Optioned Stock" means the shares of Common Stock that are subject
to the Option.
1.10. "Plan" means the Nobel Education Dynamics, Inc. 1995 Stock Incentive
Plan attached as Exhibit A and incorporated herein by reference.
1.11. "Subsidiary" means any corporation (whether or not in existence at
the time the Plan is adopted) which, at the time an Award is granted, is a
subsidiary of the Company under the definition of "subsidiary corporation"
contained in section 424(f) of the Code, or any successor.
1.12. "Termination Date" means the earliest to occur of the following:
(a) the tenth (10th) anniversary of the Date of Grant;
(b) if Employee's employment by the Company (and Subsidiaries)
is terminated by either party for any reason other than death or disability, the
date three months after the date of such termination of employment;
(c) if Employee shall become disabled (within the meaning of
section 22(e)(3) of the Code) during Employee's employment and Employee's
employment is terminated as a consequence of such disability, the date one year
after the date of such termination of employment; or
(d) if Employee shall die during Employee's employment, the date
one year after the date of death;
provided that if Employee's employment is terminated for any reason other than
death and Employee shall die following such termination of employment but prior
to the expiration of the period determined under clause (b) or (c) above
(whichever is applicable), then the Termination Date shall mean the earlier of
(i) the tenth (10th) anniversary of the Date of Grant and (ii) the date one year
after the date of death;
provided, further, that, in any event, the Committee shall have the authority to
extend further the Termination Date if permitted to do so by the Plan.
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2. Grant of Option.
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Subject to the terms and conditions of this Agreement, the Company hereby
grants to Employee the option to purchase the number of shares of Common Stock
listed on the signature page hereof. The exercise price of the Option in
respect of each share of Optioned Stock shall be $_________, subject to
adjustment pursuant Section 9 hereof and the Plan. Notwithstanding the
foregoing, only full shares shall be issued hereunder, and any fractional share
which might otherwise be issuable upon the exercise of the Option shall be
forfeited.
3. Time of Exercise.
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The Option shall be exercisable from time to time following the Date of
Grant through the Termination Date with respect to all or any portion of the
Option which shall have been vested as of the Date of Exercise. The Option
shall vest with respect to one-third of the shares of Optioned Stock subject
thereto as of the Date of Grant on each of the first, second and third
anniversary dates of the Date of Grant; provided however that upon a Change in
Control, the Option shall immediately vest with respect to all of the shares of
Optioned Stock. The Option shall terminate absolutely at 5:00 p.m. New York
Time on the Termination Date.
4. Manner of Exercise; Payment.
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4.1 Exercise of the Option shall be effected by giving written notice of
exercise to the Company, in care of the Secretary of the Company. Any such
notice shall state the number of shares of Optioned Stock for which the Option
is being exercised and shall be accompanied by payment in full of the exercise
price for such shares of Optioned Stock. Such notice shall be irrevocable once
given.
4.2 Employee shall have the right to exercise the Option with respect to
all or part of the Optioned Stock. Exercise of the Option with respect to part
of the Optioned Stock does not waive or limit Employee's rights with respect to
the balance of the Optioned Stock.
4.3 The exercise price for the Optioned Stock upon exercise shall be
payable in cash or its equivalent; provided, however, that if the Committee, in
its discretion, so determines at or prior to the time of exercise, Employee may
pay all or a portion of the exercise price in shares of Common Stock previously
acquired by Employee; provided further that if such shares were acquired through
exercise of an option or under a stock appreciation right or through the grant
by the Company of restricted stock or unrestricted stock, Employee shall have
held such shares for a period of more than 12 months on the Date of Exercise;
provided further that any right to pay the exercise price by delivery of shares
shall be subject to applicable laws. In the event all or a portion of the
aggregate exercise price is paid with shares of Common Stock, the shares of
Common Stock surrendered in payment of such Option shall be valued at the Fair
Market Value of such shares on the Date of Exercise.
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5. Nontransferability.
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The Option shall not be assignable or transferable by Employee, otherwise
than by will or by the laws of descent and distribution, and the Option shall be
exercisable only by the Grantee; provided that in the event of Employee's legal
disability, the Option may be so exercised by Employee's guardian or legal
representative and in the event of Employee's death, the Option may be so
exercised by Employee's estate, personal representative or beneficiary who
acquired the right to exercise such Option by bequest or inheritance or by
reason of the death of Employee. If Employee is married at the time of exercise
of the Option and if Employee so requests at the time of exercise, the
certificate or certificates issued shall be registered in the name of Employee
and Employee's spouse, jointly, with right of survivorship.
6. Securities Laws
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The Company may from time to time impose any conditions on the exercise of
the Option as it deems necessary or advisable to ensure that the Option granted
hereunder, and the exercise thereof, satisfy the applicable requirements of
federal and state securities laws. Such conditions to satisfy applicable
federal and state securities laws may include, without limitation, the partial
or complete suspension of the right to exercise the Option, the printing of
legends on certificates issued pursuant to Section 7 and requiring Employee to
deliver to the Company a representation letter as to Employee's investment
intent.
7. Issuance of Certificates for Shares
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Subject to the provisions of this Agreement, the certificates for the
shares of Common Stock issuable upon exercise of the Option shall be delivered
to Employee (or to such person entitled thereto in accordance with Section 5) as
promptly after the Date of Exercise as is feasible, provided that the exercise
shall not be complete, and the Company shall not be obligated to make such
deliveries, until (a) Employee has made payment in full for such shares of
Optioned Stock pursuant to Section 4 and (b) Employee and the Company (or such
Subsidiary as is the employer of Employee) have arranged for the payment by
Employee to the Company (or such Subsidiary), or the withholding from Employee's
other compensation, of an amount in cash equal to the amount of any tax required
to be withheld by the Company (or such Subsidiary) by any applicable federal or
state laws or regulations on account of such exercise. The Company may also
condition delivery of shares of Common Stock upon the prior receipt from
Employee of any undertakings or representations that it may determine are
required to ensure that the certificates are being issued in compliance with
federal and state securities laws.
8. Rights Prior to Issuance of Certificates
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Neither Employee nor the person to whom the rights of Employee shall have
passed by will or the laws of descent and distribution shall have any of the
rights of a stockholder with respect to
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any shares of Optioned Stock until the date of the issuance to such person of
certificates for such shares of Optioned Stock pursuant thereto.
9. Stock Dividends; Subdivision or Combination of Shares
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The number of shares of Common Stock subject to the Option (as well as the
Option exercise price per share), shall, subject to the provisions of section
424(a) of the Code, (a) be adjusted to reflect any stock dividend, stock split,
share combination, or similar change in the capitalization of the Company and
(b) be adjusted as provided in Section 11 of the Plan upon certain other events.
10. Option Not to Affect Employment
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The Option granted hereunder shall not confer upon Employee any right to
continue in the employment of the Company or any Subsidiary of the Company.
11. Withholding.
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Each Employee authorizes the Company to make any required withholding from
such Employee's compensation for the payment of any and all income taxes and
other sums that may be due any governmental authority (other than taxes imposed
directly upon the Company) as a result of the receipt by Employee of
compensation income pursuant to the foregoing payments, and agrees, if requested
by the Company and if the Company has complied with its obligations hereunder,
and in lieu of all or a portion of such withholding, to pay the Company in a
lump sum such amounts as the Company may be required to remit to any
governmental authority on behalf of Employee in respect of any such taxes and
other sums. Subject to applicable law, and to the extent permitted by the
Committee in accordance with the Plan, Employee may satisfy the minimum required
federal withholding tax, in whole or in part, by electing to have the Company
withhold (or by returning to the Company) shares of Common Stock.
12. Status of Option; Interpretation.
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The Committee shall have sole power to resolve any dispute or disagreement
arising out of this Agreement. The Option is subject to the terms and
conditions of the Plan as now in effect and as may be amended, from time to
time, in accordance with the Plan (which terms and conditions are and
automatically shall be incorporated herein by reference and made a part hereof
and shall control in the event of any conflict with any of the terms of this
Agreement).
13. Miscellaneous
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13.1 All notices and other communications hereunder shall be in writing
and shall be transmitted by messenger, courier service or certified first-class
mail (in each case postage or cost of delivery prepaid) and shall be effective
when delivered. The address for notices and other
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communications of (i) the Company is Rose Tree Corporate Center II, 0000 Xxxxx
Xxxxxxxxxx Xxxx, Xxxxx 0000, Xxxxx, XX 00000, Attn: Corporate Secretary, and
(ii) Employee is the address set forth below under Employee's signature. Either
party may change its address for notice given notice to the other pursuant to
this Section 13.1.
13.2 This Agreement may be executed in two or more counterparts all of
which taken together will constitute one and the same instrument.
13.3 This Agreement shall be governed by the applicable Code provisions
to the maximum extent possible; otherwise, the operation of, and the rights of
Employee under this Agreement shall be governed by applicable federal law and
otherwise by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
Nobel Learning Communities, Inc.
By:__________________________________________
EMPLOYEE:
_____________________________________________
Employee's Address:
Number of Shares
of Optioned Stock: ___________
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