Exhibit 4.1
NEWPORT CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
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This Nonqualified Stock Option Agreement ("Agreement") is made and
entered into by and between Newport Corporation, a Nevada corporation
("Company') and the individual (referred to herein as, "Optionee") designated as
"Optionee" on the signature page hereto.
R E C I T A L S
A. The Company and Micro Robotics Systems, Inc. a Massachusetts
corporation ("MRSI") have heretofore entered into an Agreement and Plan of
Merger, dated as of January 22, 2002 ("Merger Agreement"), and in connection
with the Company's acquisition of MRSI pursuant to the terms thereof, the
Company has agreed to "assume" and "convert" all options to purchase shares of
MRSI common stock held by service providers to MRSI (as to each such person, an
"MRSI Option") thereby providing each such service provider with the right to
purchase shares of the Company's Common Stock on the terms and conditions herein
set forth.
B. In accordance with the Company's assumption of the MRSI Option held
by Optionee that is designated on the signature page hereto ("Optionee's MRSI
Option"), the Company and Optionee desire to set forth in this Agreement the
terms and conditions that shall apply to such assumption.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
warranties and agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree, effective as of the
"Effective Time" (as such term is defined in the Merger Agreement) as follows:
1. Option Grant / Cancellation of MRSI Option.
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1.1 Assumption / Grant. This Agreement sets forth the terms and
conditions of the agreement between the Company and the Optionee relating to the
Optionee's right to purchase shares of the Company's Common Stock in connection
with the Company's assumption of Optionee's MRSI Option. Accordingly, the
Company hereby grants to Optionee an option (the "Option") to purchase all or
any portion of a total of _______________ (_____________) shares ("Shares") of
the Common Stock of the Company at a purchase price of ______________
($_________) per share ("Exercise Price"), subject to adjustment pursuant to
Section 6 and to the other terms and conditions set forth herein.
1.2 Nonqualified Stock Option. This Option is intended to be a
nonqualified stock option, and is not intended to qualify as an "incentive stock
option" as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
1.3 Cancellation of MRSI Option. Contemporaneous with the execution
of this Agreement, Optionee hereby agrees that Optionee's MRSI Option shall be
null and void and of no further force and effect, and that the terms and
conditions contained in this Option shall supersede and replace the same.
2. Right to Exercise. This Option shall be 100% vested as of the
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effective date of this Agreement, and, subject to Section 3, Optionee shall have
the right to exercise this Option as to 100% of the Shares from time to time, in
whole or in part, at the Exercise Price.
3. Term of Option.
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3.1 Expiration, Disability, Death or Other Employment
Termination. The right of the Optionee to exercise this Option shall terminate
upon the first to occur of the following:
(a) the date in which the Optionee's MRSI Option was to
expire;
(b) the expiration of three (3) months from the date of
termination of Optionee's Continuous Service if such termination occurs for any
reason other than permanent disability, death or cause; provided, however, that
if Optionee dies during such three-month period the provisions of Section 3(d)
below shall apply;
(c) immediately on the date of termination of Optionee's
Continuous Service if such termination occurs for cause;
(d) the expiration of one (1) year from the date of
termination of Optionee's Continuous Service if such termination is due to
permanent disability of the Optionee (as defined in Section 22(e)(3) of the
Code);
(e) the expiration of one (1) year from the date of
termination of Optionee's Continuous Service if such termination is due to
Optionee's death or if death occurs during the three-month period following
termination of Optionee's Continuous Service pursuant to Section 3(b) above; or
(f) upon the consummation of a "Change in Control" (as
defined in Section 10), unless otherwise provided pursuant to Section 10
below.
As used herein, the term "Continuous Service" means (i) employment by
either the Company or any parent or subsidiary corporation of the Company, or by
a corporation or a parent or subsidiary of a corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the Code applies, which
is uninterrupted except for vacations, illness (except for permanent disability,
as defined in Section 22(e)(3) of the Code), or leaves of absence which are
approved in writing by the Company or any of such other employer corporations,
if applicable, (ii) service as a member of the Board of Directors of the Company
until Optionee resigns, is removed from office, or Optionee's term of office
expires and he or she is not reelected, or (iii) so long as Optionee is engaged
as a consultant or service provider to the Company or other corporation referred
to in clause (i) above. Changes in Optionee's status among the alternatives set
forth in the foregoing clauses (i), (ii) and/or (iii) shall not be deemed to
terminate Optionee's Continuous Service.
4. Cancellation and Rescission. The Board of Directors of the Company,
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or such committee of the Board as may be designated by the Board (hereinafter,
the "Administrator") may cancel, rescind, suspend, withhold or otherwise limit
or restrict all or any portion of this Option at any time if Optionee is not in
compliance with all applicable provisions of this Agreement, or if Optionee
engages in any "Adverse Activity." For purposes of this Section 4, "Adverse
Activity" shall include: (i) the rendering of services for any organization or
engaging directly or indirectly in any business which is or becomes competitive
with MRSI or the Company, or which organization or business, or the rendering of
services to such organization or business, is or becomes otherwise prejudicial
to or in conflict with the interests of MRSI or the Company; (ii) the disclosure
to anyone outside the Company or any of its subsidiaries, or the use in other
than the business of the Company or any of its subsidiaries, without prior
written authorization from the Company, of any confidential
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information or material relating to the business of the Company or any of its
subsidiaries, acquired by Optionee either during or after employment with the
Company or any of its subsidiaries; (iii) the failure or refusal to disclose
promptly and to assign to the Company in accordance with the Company's policies
and any agreement in effect between the Company or any of its subsidiaries and
the Optionee pertaining to confidentiality and/or ownership of intellectual
property all right, title and interest in any invention or idea, patentable or
not, made or conceived by Optionee during employment by the Company or any of
its subsidiaries, relating in any manner to the actual or anticipated business,
research or development work of the Company or any of its subsidiaries; (iv)
activity that results in termination of the Optionee's employment for cause; (v)
a material violation of any rules, policies, procedures or guidelines of the
Company or any of its subsidiaries; or (vi) any attempt directly or indirectly
to induce any employee of the Company or any of its subsidiaries to be employed
or perform services elsewhere or any attempt directly or indirectly to solicit
the trade or business of any current or prospective customer, supplier or
partner of the Company or any of its subsidiaries. In the event Optionee fails
to comply with the provisions of the foregoing clauses prior to, or during the
six (6) months period following, any exercise, payment or delivery pursuant to
this Option, such exercise, payment or delivery may be rescinded within two (2)
years thereafter. In the event of any such rescission, Optionee shall pay to the
Company the amount of any gain realized or payment received as a result of the
exercise, payment or delivery, in such manner and on such terms and conditions
as may be required, and the Company shall be entitled to set-off against the
amount of any such gain any amount owed to the Optionee by the Company.
5. Exercise of Option. Subject to Section 4 above and Section 6 below,
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until termination of the right to exercise this Option in accordance with
Section 3 above, this Option may be exercised in whole or in part by the
Optionee (or, after his or her death, by the person designated in Section 7
below) upon delivery of the following to the Company at its principal executive
offices:
(a) a written notice of exercise which identifies this Agreement
and states the number of Shares then being purchased (but no fractional Shares
may be purchased);
(b) a check or cash in the amount of the aggregate Exercise Price
as to the Shares set forth in the written notice;
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal, state or
other applicable tax laws with respect to the taxable income, if any, recognized
by the Optionee in connection with the exercise of this Option (unless the
Company and Optionee shall have made other arrangements for deductions or
withholding from Optionee's wages, bonus or other compensation payable to
Optionee, or by the withholding of Shares issuable upon exercise of this Option,
provided such arrangements satisfy the requirements of applicable tax laws);
(d) a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of the
Optionee, or person designated in Section 7 below, as the case may be;
(e) certification by the Optionee, if requested by the Company, in
a manner acceptable to the Company that he or she is in compliance with the
terms and conditions of this Agreement, including but not limited to Section 4
above;
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(f) if required pursuant to Section 6.13(a) of the Merger
Agreement, an executed Shareholder Investment Representations and Joinder
Agreement having such provisions as may reasonably be required by the Company;
and
(g) such other deliverables as reasonably requested by the Company.
6. Compliance with Merger Agreement / Escrow / Adjustments.
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6.1 Escrow of Shares. In accordance with Sections 2.04 and 6.13(a)
of the Merger Agreement, upon each and every exercise of this Option, Optionee
hereby agrees that the number of Shares that are to be delivered to Optionee by
the Company pursuant to such exercise shall be net of that amount of Shares (if
any) that are to be placed in escrow as provided in Section 2.04 of the Merger
Agreement.
6.2 Adjustments. Notwithstanding Section 1.1 above, upon any
requirement that the "Conversion Ratio" (as defined in the Merger Agreement) be
adjusted pursuant to Section 6.13(a) of the Merger Agreement:
(a) the number of Shares shall be appropriately adjusted to
reflect the number of "Escrow Shares" (as defined in the Merger Agreement) that
have been used to satisfy an indemnifiable loss pursuant to Section 8 of the
Merger Agreement as well as any adjustment to the Merger Consideration pursuant
to Section 2.05 of the Merger Agreement; and
(b) an adjustment to the Exercise Price shall be made by
(i) determining the aggregate exercise price that was to be paid by Optionee
under the Optionee's MRSI Option, then (ii) subtracting the aggregate amounts of
any Exercise Price paid by Optionee pursuant to exercise of this Option from
such amount, and then (iii) allocating such remaining amount among the number of
Shares that Optionee has not yet exercised his right to purchase under this
Option, determined after the computation in Section 6.2(a) above.
7. Death of Optionee; No Assignment. The rights of the Optionee under
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this Agreement may not be assigned or transferred except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee. Any attempt to sell, pledge, assign,
hypothecate, transfer or dispose of this Option in contravention of this
Agreement shall be void and shall have no effect. If the Optionee's Continuous
Service terminates as a result of his or her death, Optionee's legal
representative, his or her legatee, or the person who acquired the right to
exercise this Option by reason of the death of the Optionee (individually, a
"Successor") shall succeed to the Optionee's rights and obligations under this
Agreement. After the death of the Optionee, only a Successor may exercise this
Option.
8. Representation of Optionee. Optionee acknowledges and understands
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that all rights and obligations connected with this Option are set forth in this
Agreement. Optionee further acknowledges receipt of the prospectus relating to
the registration of the Shares pursuant to the Securities Act of 1933, as
amended.
9. Adjustments Upon Changes in Capital Structure. In the event that the
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outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend or other change in the
capital structure of the Company, then appropriate adjustment shall be made by
the Administrator
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to the number of Shares subject to the unexercised portion of this Option and to
the Exercise Price per share, in order to preserve, as nearly as practical, but
not to increase, the benefits of the Optionee under this Option.
10. Change in Control. In the event of a Change in Control
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(as defined below):
(a) The Administrator shall have the right to determine the extent
to which (i) this Option shall be assumed by the acquiring or successor entity
(or parent thereof) or new options of comparable value are to be issued in
exchange therefor pursuant to the terms of the Change in Control transaction, or
(ii) this Option shall be replaced by the acquiring or successor entity (or
parent thereof) with other incentives under a new incentive program ("New
Incentives") containing such terms and provisions as the Administrator in its
discretion may consider equitable. If this Option is to be assumed, or if new
options of comparable value are issued in exchange therefor, then this Option or
new option shall be appropriately adjusted, concurrently with the Change in
Control, to apply to the number and class of securities or other property that
the Optionee would have received pursuant to the Change in Control transaction
in exchange for the shares issuable upon exercise of the Option had the Option
been exercised immediately prior to the Change in Control, and appropriate
adjustment also shall be made to the Exercise Price such that the aggregate
Exercise Price of each such Option or new option shall remain the same as nearly
as practicable.
(b) The Administrator in its discretion may provide, in connection
with the Change in Control transaction, for the purchase or exchange of this
Option for an amount of cash or other property having a value equal to the
difference (or "spread") between: (x) the value of the cash or other property
that the Optionee would have received pursuant to the Change in Control
transaction in exchange for the shares issuable upon exercise of this Option had
the Option been exercised immediately prior to the Change in Control, and (y)
the Exercise Price of this Option.
(c) This Option shall terminate and cease to be exercisable upon
consummation of a Change in Control except to the extent that this Option is to
be assumed by the successor entity (or parent thereof), or new options of
comparable value or New Incentives are issued in exchange therefor pursuant to
the terms of the Change in Control transaction where in such case, this Option
shall terminate and cease to be exercisable upon consummation of such Change in
Control.
For these purposes, Change in Control shall mean (i) the acquisition,
directly or indirectly, in one transaction or a series of related transactions,
by any person or group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) of the beneficial ownership of securities of
the Company possessing more than fifty percent (50%) of the total combined
voting power of all outstanding securities of the Company; (ii) a merger or
consolidation in which the holders of the outstanding voting securities of the
Company immediately prior to such merger or consolidation hold, in the
aggregate, securities possessing less than fifty percent (50%) of the total
combined voting power of all outstanding voting securities of the surviving or
acquiring entity immediately after such merger or consolidation; (iii) the sale,
transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; or (v)
the approval by the shareholders of a plan or proposal for the liquidation or
dissolution of the Company.
11. No Employment Contract Created. Neither the granting of this Option
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nor the exercise hereof shall be construed as granting to the Optionee any right
with respect to continuance of employment by the Company or any of its
subsidiaries. The right of the Company or any of its
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subsidiaries to terminate at will the Optionee's employment at any time (whether
by dismissal, discharge or otherwise), with or without cause, is specifically
reserved.
12. Rights as Shareholder. The Optionee (or transferee of this option by
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will or by the laws of descent and distribution) shall have no rights as a
shareholder with respect to any Shares covered by this Option until such person
has duly exercised this Option, paid the Exercise Price and become a holder of
record of the Shares purchased.
13. Limitation of Liability for Nonissuance. During the term of this
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Agreement, the Company agrees at all times to reserve and keep available, and to
use its reasonable best efforts to obtain from any regulatory body having
jurisdiction any requisite authority in order to issue and sell, such number of
shares of its Common Stock as shall be sufficient to satisfy its obligations
hereunder. Inability of the Company to obtain, from any regulatory body having
jurisdiction, authority deemed by the Company's counsel to be necessary for the
lawful issuance and sale of any shares of its Common Stock hereunder shall
relieve the Company of any liability in respect of the nonissuance or sale of
such shares as to which such requisite authority shall not have been obtained.
14. Notices. Any notice, demand or request required or permitted to be
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given under this Agreement shall be in writing and shall be deemed given when
delivered personally or three (3) days after being deposited in the United
States mail, as certified or registered mail, with postage prepaid, and
addressed, if to the Company, at its principal place of business, Attention: the
Chief Financial Officer, and if to the Optionee, at his or her most recent
address as shown in the employment or stock records of the Company.
15. Governing Law. The validity, construction, interpretation, and
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effect of this Option shall be governed by and determined in accordance with the
laws of the State of California.
16. Severability. Should any provision or portion of this Agreement be
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held to be unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
17. Attorneys' Fees. If any party shall bring an action in law or equity
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against another to enforce or interpret any of the terms, covenants and
provisions of this Agreement, the prevailing party in such action shall be
entitled to recover from the other party reasonable attorneys' fees and any
expert witness fees.
18. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall be deemed one instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Time.
NEWPORT CORPORATION "OPTIONEE"
By:
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Name: Xxxxxxx X. Xxxxx (Signature)
Title: Vice President and General Optionee Name: [OPTIONEE NAME]
Counsel
Optionee's MRSI Option
Dated as of:
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Number of MRSI Shares:
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Expiration Date:
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