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THE WESTWOOD GROUP, INC.
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the ___th day of October, 1997, by and between The
Westwood Group, Inc. (the "Corporation") and _____________ (the "Employee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors of the Corporation (the "Board") has
approved the grant, in connection with Employee's service as an employee of the
Corporation, of non-qualified stock options to the Employee to purchase common
stock of the Corporation, par value $.01 per share (the "Stock");
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set forth, the
Corporation hereby grants to the Employee, as of October __, 1997 (the "Date of
Grant"), an option to purchase up to shares of Stock at a price of $3.00 per
share (the "Option"). The ceiling stated in the previous sentence on the maximum
number of shares which may be acquired under the Option is referred to herein as
the "Number of Option Shares".
In the event of a consolidation or merger of the Corporation in which
the Corporation is not the continuing or surviving entity within six months of
the Date of Grant, the Corporation shall require the continuing or surviving
entity to offer an equivalent (in number of option shares, exercise price,
vesting, term, and economic value) stock option (to the Option) in such entity
or affiliate thereof to the unexercised portion of the Number of Option Shares.
Such equivalent stock option shall be upon terms which are materially no less
favorable to Employee than the terms of the Option.
2. TYPE OF OPTION.
The Option granted hereunder is intended by the parties hereto to be,
and shall be treated as, a "non-qualified" stock option.
3. TIME OF EXERCISE OF OPTION.
The Option shall not be exercisable prior to the first anniversary
of the date of this Agreement. Thereafter, the Option shall only be exercisable
as follows:
Additional Total
Date of Vesting % Available % Available
--------------- ----------- -----------
On or after October __, 1998 33% 33%
but before October __, 1999
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On or after October __, 1999 33% 66%
but before October __, 2000
On or after October __, 2000 34% 100%
4. TERM OF OPTION; EXERCISABILITY.
(a) TERM.
(1) The Option shall expire ten (10) years from the date
of this Agreement, but shall be subject to earlier termination as
herein provided.
(2) Except as otherwise provided in this Section 4, the
Option shall terminate thirty days following the date the
Employee ceases to be an employee of the Company or one of its
subsidiaries, or on the date on which the Option expires by its
terms, whichever occurs first.
(3) If such termination of employment is because the
Employee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), the Option shall terminate on the
last day of the third month from the date the Employee ceases to
be an employee, or on the date on which the Option expires by its
terms, whichever occurs first.
(4) In the event of the death of the Employee, the Option
shall terminate on the last day of the sixth month from the date
of death, or on the date on which the Option expires by its terms,
whichever occurs first.
(5) If such termination of employment is because of
dismissal for cause, as determined by the Board of Directors of
the Company, or because the Employee is in breach of any
employment agreement with the Company or one of its subsidiaries,
such Option will terminate on the date the Employee ceases to be
an employee of the Company or one of its subsidiaries.
(6) Notwithstanding subparagraphs (2), (3), (4) and (5)
above, the Board of Directors shall have the authority to extend
the expiration date of the Option in circumstances in which it
deems such action to be appropriate, provided that no such
extension shall extend the term of the Option beyond the date on
which the Option would have expired if no termination of the
Employee's employment had occurred.
(b) EXERCISABILITY. The Option shall be exercisable only to
the extent that the right to purchase shares under the Option has accrued, is in
effect and is vested on the date the Employee ceases to be an employee of the
Company.
5. EXERCISE PROCEDURES.
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The Employee may exercise the Option with respect to all or any part of
the whole number of shares then exercisable by giving the Secretary of the
Corporation written notice of intent to exercise. Such notice shall specify the
number of shares as to which the Option is to be exercised and the exercise
date, which date shall be at least five (5) days after the giving of such notice
unless the Corporation and the Employee shall have agreed upon an earlier time.
Full payment (in U.S. dollars) by the Employee of the Option price for the
shares purchased shall be made on or before the exercise date specified in such
notice in cash, or, in the event that the Board shall, in its sole discretion,
determine that the Option shall be exercisable by tendering shares of Stock of
the Corporation, the Option price may be paid in whole or in part through the
surrender of shares of Stock at the fair market value of such shares determined
as of the last trading date prior to the date on which the Option is exercised.
On the exercise date specified in the Employee's notice or as soon
thereafter as is practicable, the Corporation shall, without transfer or issue
tax or other incidental expense to the Employee, cause to be delivered to the
Employee, a certificate or certificates for such shares (out of theretofore
unissued shares or reacquired shares, as the Corporation may elect) upon payment
for the shares.
If the Employee fails to pay for any of the shares specified in such
notice or fails to accept delivery thereof, the Employee's right to purchase
such shares may be terminated by the Corporation. The date specified in the
Employee's notice as the date of exercise shall be deemed the date of exercise
of the Option, provided that payment in full shall have been received by such
date.
6. SECURITIES LAW REPRESENTATIONS.
The Employee hereby represents and warrants to the Corporation that: (1)
the Employee will comply with all applicable conditions of the Securities Act of
1933, as amended (the "1933 Act"), and the rules and regulations promulgated
thereunder, in effecting any sale of shares of Stock subject to the Option, and
(2) the Employee shall not dispose of any such shares in any manner that is, or
as may involve the Corporation in, a violation of any federal or state
securities law, including the 1933 Act.
If at any time, and as often as, the Board shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to this Option upon any securities exchange or under any state or
Federal law, or the consent or approval of any governmental regulatory body, or
the giving of any investment representation, or the making of any investment
agreement, or the notation of any restriction on transfer on the certificate or
certificates representing such shares, is necessary or desirable as a condition
of, or in connection with, the issuance or purchase of shares under this Option,
no shares shall be issued or purchased under this Option unless and until such
listing, registration, qualification, consent, approval, representation,
agreement or notation shall have been effected or obtained free of any
conditions not acceptable to the Board. The Corporation shall in no event be
obligated to register any securities pursuant to the 1933 Act or to take any
other affirmative action in order to cause the exercise of this Option or the
issuance of shares pursuant thereto to comply with any law or regulation of any
governmental
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authority.
7. CERTAIN CORPORATE CHANGES.
In the event of a reorganization, recapitalization, stock split, spin-off,
stock dividend, reclassification, subdivision or combination of shares, merger,
consolidation, or similar event, the Corporation shall make a corresponding
adjustment in the number and kind of shares subject to the Option, or in the
Option price. Such adjustments shall be made by the Board, whose determination
shall be final, binding and conclusive. Such adjustments may provide for the
elimination of any fractional shares which might otherwise become subject to
this Option.
8. NO RIGHTS OF SHAREHOLDER.
Neither the Employee nor any personal representative of the Employee shall
be, or have, any of the rights and privileges of a shareholder of the
Corporation with respect to any shares subject to the Option, in whole or in
part, except to the extent that certificates for such shares shall have been
issued upon the exercise of the Option as provided for herein.
9. NON-TRANSFERABILITY OF OPTION.
During the Employee's lifetime, the Option shall be exercisable only by
the Employee or by a guardian or legal representative of the Employee and
neither the Option shall be transferable, except by will or by the laws of
descent and distribution, nor shall the Option be subject to attachment,
execution or other similar process. In the event of any attempt by the Employee
to alienate, assign, pledge, hypothecate or otherwise dispose of the Option,
except as provided for herein, or in the event of the levy of any attachment,
execution or similar process upon the rights or interest hereby conferred, the
Corporation may terminate the Option by notice to the Employee and the Option
and all rights hereunder shall thereupon become null and void.
10. EMPLOYMENT NOT AFFECTED.
Neither the granting of the Option nor its exercise shall be construed as
granting to the Employee any right with respect to continuance of employment by
the Corporation or any subsidiary. Except as may otherwise be limited by any
written employment or other agreement between the Corporation or any subsidiary
and the Employee, the right of the Corporation or any subsidiary to terminate at
will the Employee's employment or affiliation with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically reserved by the
Corporation or any subsidiary.
11. WITHHOLDING TAXES.
Whenever shares of Common Stock are to be issued upon exercise of this
Option, the Corporation shall have the right to require the Employee to remit to
the Corporation an amount sufficient to satisfy all Federal, state and local
income, excise, employment
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and other withholding tax requirements prior to the delivery of any certificate
or certificates for such shares as required by law.
12. AMENDMENT OR CANCELLATION OF THE OPTION.
The Option may be amended or canceled by the Board at any time with the
Employee's consent.
13. NOTICE.
Any notice to the Corporation provided for in this instrument shall be
addressed to the Corporation in care of its Secretary, and any notice to the
Employee shall be addressed to the Employee at the current address shown on the
records of the Corporation. Any notice shall be deemed to be duly given if and
when properly addressed and posted by registered or certified mail, postage
prepaid.
14. GOVERNING LAW.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by, and determined in accordance with, the
internal substantive laws of The Commonwealth of Massachusetts, except to the
extent preempted by federal law, which shall to that extent govern.
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IN WITNESS WHEREOF, the Corporation has caused its duly authorized
officers to execute and attest this Non-Qualified Stock Option Agreement, and to
apply the corporate seal hereto, and the Employee has placed his signature
hereon, effective as of the Date of Grant.
[CORPORATE SEAL]
Attest: THE WESTWOOD GROUP, INC.
---------------------------- By:
Secretary Title:
Employee Name:
