Exhibit 10.1
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Form of Stock Option Agreement
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RE: Grant of Non-Qualified Stock Option
Dear ______________:
On April 21, 2003, the Board of Directors of CopyTele, Inc. (the "Company")
adopted the CopyTele, Inc. 2003 Share Incentive Plan (the "Plan"). The Plan
provides for the grant of certain rights, options and other awards to
non-employee directors of the Company and certain key employees and consultants
of the Company and its subsidiaries. A copy of the Plan is annexed hereto and
shall be deemed a part hereof as if fully set forth herein. Unless the context
otherwise requires, all terms defined in the Plan shall have the same meaning
when used herein.
1. The Company hereby grants to you, as a matter of separate inducement and
not in lieu of any salary or other compensation for your services, the right and
option to purchase, in accordance with the terms and conditions set forth in the
Plan, but subject to the limitations set forth herein and in the Plan, an
aggregate of ____________ shares of Common Stock of the Company at a price of
$_____ per share, such option price being, in the judgment of the Stock Option
Committee, not less than one hundred percent (100%) of the fair market value of
such share at the date hereof (the "Non-Qualified Option").
Notwithstanding, the foregoing, it is specifically understood by you that
no warranty is made to you with respect to the value of such shares. The
Non-Qualified Option is not intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. The Non-Qualified Option shall be referred to herein as the "Option".
2. Subject to the provisions and limitations of sections 6 of the Plan, the
Option may be exercised by you, on a cumulative basis, during a period of ____
years from the date hereof and terminating at the close of business on
______________, as follows:
(a) the Option may be exercised by you upon the date hereof; and
(b) the total number of shares subject to the Option may be purchased by
you during the ___ years following the date hereof.
3. In no event shall you exercise the Option for a fraction of a share or
for less than one hundred (100) shares (unless the number purchased is the total
balance for which the Option is then exercisable).
4. The unexercised portion of the Option granted herein will automatically
and without notice terminate and become null and void upon the expiration of
____ years from the date of the grant of the Option. In the event your service
as an employee of the Company is terminated prior to the expiration of ____
years from the date hereof, the Option shall, to the extent not theretofore
exercised, terminate and become null and void, except to the extent described
below. None of the events described below shall extend the period of
exercisability of the Option beyond ___ years from the date hereof:
(a) if you die, the Option shall, to the extent not theretofore exercised,
remain exercisable for two (2) years after your death, by your legatee,
distributee, guardian or legal or personal representative.
(b) if your employment is terminated by reason of your disability (as
defined in the plan), voluntary retirement or dismissal by the Company other
than for cause as defined in the Plan, provided you are otherwise eligible, the
Option shall, to the extent not theretofore exercised, remain exercisable for
three (3) months after the date of such termination of employment in the case of
termination by reason of retirement or dismissal other than for cause and two
(2) year after the date of termination of employment in the case of termination
by reason of disability; and
(c) if you die during either the three (3) month or two (2) year period,
whichever is applicable, specified in clause (b) above and at a time when you
were entitled to exercise the Option, your legal representative, or such person
who acquired the Option by reason of your death may, not later than two (2)
years from your date of death, exercise the Option, to the extent not
theretofore exercised, in respect of any or all of such number of shares subject
to the Option.
5. The Option is not transferable by you otherwise than by will or the laws
of descent and distribution, and is exercisable, during your lifetime, only by
you. The Option may not be pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar proceeding. Any attempted assignment, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
attachment or similar proceeding upon the Option, shall be null and void and
without effect.
6. Any exercise of the Option shall be in writing addressed to the
Corporate Secretary of the Company at the principal place of business of the
Company, specifying the Option being exercised and the number of shares to be
purchased. The purchase price for the shares being purchased shall be delivered
to the Corporate Secretary within five days of the time such writing is so
delivered.
7. If the Company, in its sole discretion, shall determine that it is
necessary, to comply with applicable securities laws, the certificate or
certificates representing the shares purchased pursuant to the exercise of the
Option shall bear an appropriate legend in form and substance, as determined by
the Company, giving notice of applicable restrictions on transfer under or in
respect of such laws.
8. You hereby covenant and agree with the Company that if, at the time of
exercise of the Option, there does not exist a Registration Statement on an
appropriate form under the Securities Act of 1933, as amended (the "Act"), which
Registration Statement shall have become effective and shall include a
prospectus which is current with respect to the shares subject to the Option,
you shall make the representations (i) that you are purchasing the shares for
your own account and not with a view to the resale or distribution thereof, (ii)
that any subsequent offer for sale or sale of any such shares shall be made
either pursuant to (x) a Registration Statement on an appropriate form under the
Act, which Registration Statement shall become effective and shall be current
with respect to the shares being offered and sold, or (y) a specific exemption
from the registration requirements of the Act, but in claiming such exemption,
you shall, prior to any offer for sale or sale of such shares, obtain a
favorable written opinion from counsel for or approved by the Company as to the
applicability of such exemption and (iii) that you agree that the certificates
evidencing such shares shall bear a legend to the effect of the foregoing.
By your acceptance hereof, you agree to reimburse the Company for any taxes
required by any government to be withheld or otherwise deducted and paid by the
Company in respect of the issuance or disposition of the shares subject to the
Non-Qualified Option. In lieu thereof, the Company shall have the right to
withhold the amount of such taxes from any other sums due or to become due from
the Company to you. The Company may, in its discretion, hold the stock
certificate to which you are entitled upon the exercise of the Option as
security for the payment of such withholding tax liability, until cash
sufficient to pay that liability has been accumulated. In addition, at any time
that the Company becomes subject to a withholding obligation under applicable
law with respect to the exercise of a Non-Qualified Option (the "Tax Date") you
may elect to satisfy, in whole or in part, your related personal tax liabilities
(an "Election") by (a) directing the Company to withhold from shares issuable in
the related exercise either a specified number of shares or shares having a
specified value (in each case not in excess of the related personal tax
liabilities), (b) tendering shares previously issued pursuant to the exercise of
the Option or other shares of the Company's common stock owned by you, or (c)
combining any or all of the foregoing options in any fashion. An Election shall
be irrevocable. The withheld shares and other shares tendered in payment shall
be valued at their fair market value on the Tax Date. The Stock Option Committee
may disapprove of any Election, suspend or terminate the right to make
Elections, provide that the right to make Elections shall not apply to
particular shares or exercises, or impose additional conditions or restrictions
on the right to make an Election as it shall deem appropriate. In addition, you
authorize the Company to effect any such withholding upon exercise of a
Non-Qualified Option by retention of shares issuable upon such exercise having a
fair market value at the date of exercise which is equal to the amount to be
withheld; provided, however, that the Company is not authorized to effect such
withholding without your prior written consent if such withholding would subject
you to liability under Section 16(b) of the Securities Exchange Act of 1934.
This agreement is subject to all terms, conditions, limitations and
restrictions contained in the Plan, which shall be controlling in the event of
any conflicting or inconsistent provisions.
This agreement is not a contract of employment and the terms of your
employment shall not be affected hereby or by any agreement referred to herein
except to the extent specifically so provided herein or therein. Nothing herein
shall be construed to impose any obligation on the Company to continue your
employment, and it shall not impose any obligation on your part to remain in the
employ of the Company thereof.
Please indicate your acceptance of all the terms and conditions of the
Option and the Plan by signing and returning a copy of this letter.
Very truly yours,
COPYTELE, INC.
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ACCEPTED:
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