NEOWARE SYSTEMS, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
NEOWARE SYSTEMS, INC. (the "Company") hereby grants to _______ (the
"Optionee") this option to purchase shares of the Company's Common Stock at a
price and on the terms set forth herein and subject to the terms and conditions
contained in the Company's 1995 Stock Option Plan, as amended (the "1995 Plan"),
which terms and conditions are hereby incorporated herein.
1. Grant. Effective as of __________ (the "Date of Grant"),
the Company granted to the Optionee an option (the "Option") to purchase up to
_________ shares of the Common Stock of the Company (the "Option Shares") at a
price of $______ per share (the "Option Price").
2. Type of Option. This Option is intended to be a non-qualified stock
option, granted under Part III of the 1995 Plan, and is not intended to be an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
3. Term. The Option granted hereunder shall expire at 5:00 p.m. (local
time at the principal executive offices of the Company) on ___________ (the
"Expiration Date"), unless sooner terminated as provided herein.
4. Exercise of Option. Subject to Paragraph 3 and in accordance with
the terms and conditions contained in the 1995 Plan, the Option shall vest and
be exercisable, on a cumulative basis, in accordance with the following
schedule:
Beginning On Number of Shares
------------ ----------------
__________ _______
__________ _______
5. Method of Exercise and Payment.
5.1 This Option shall be exercisable by written notice to the
Company, pursuant to Paragraph 11, specifying the number of Option Shares to be
purchased. The notice shall also be accompanied by payment of the aggregate
Option Price of the Option Shares being purchased.
If the listing, registration, or qualification of the Option
Shares upon any securities exchange or under any federal or state law, or the
consent or approval of any governmental regulatory body is necessary as a
condition of or in connection with the purchase of such Option Shares, the
Company shall not be obligated to issue or deliver the certificates representing
the Option Shares as to which the Option has been exercised unless and until
such listing, registration, qualification, consent, or approval shall have been
effected or obtained.
5.2 Payment of the Option Price may be made: (i) in cash or
check; (ii) by exchange of shares of Common Stock valued at its fair market
value on the date of exercise; (iii) by means of a brokers' cashless exercise
procedure by the delivery to the Company of an exercise notice together with
irrevocable instructions to a broker to sell a sufficient number of shares of
Common Stock to pay the purchase price of Common Stock as to which such exercise
relates; and to deliver promptly such amount to the Company; or (iv) by any
combination of the foregoing. Where payment of the Option Price is to be made
with shares of Common Stock acquired under any compensation plan of the Company,
such shares will not be accepted as payment unless the Optionee has held such
shares for the period of time specified in the 1995 Plan.
6. Rights of Shareholders. Neither an Optionee nor his or her legal
representatives or beneficiaries shall have any of the rights of a shareholder
with respect to any shares subject to any Option until such shares shall have
been issued upon the proper exercise of such Option.
7. Nontransferability of Options. No Option may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated otherwise than by will
or by the laws of descent and distribution or, with respect to nonqualified
stock options, pursuant to a qualified domestic relations order as defined by
the Code, or Title I of the Employee Retirement Income Security Act, or the
rules thereunder. Except as otherwise specifically provided herein, all Options
granted to an Optionee under the 1995 Plan shall be exercised during the
lifetime of such Optionee only by such Optionee.
8. Termination of Service. Subject to the condition that no Option
shall be exercisable after the Expiration date:
8.1 Upon the Optionee's cessation of service as a non-employee
director (for reasons other than retirement or death), including cessation of
service due to physical or mental disability that prevents the Optionee from
rendering further services as a non-employee director, only those options
exercisable at the date of cessation of service shall be exercisable by the
Optionee. This Option shall be exercisable until the first to occur of: (i) the
expiration of the remaining term of the Option; or (ii) three months after the
Optionee's cessation of service.
Upon the Optionee's retirement or death, this Option shall be
exercisable as follows:
(a) Retirement. Upon the Optionee's retirement as a
non-employee director after the Optionee has served for at least six consecutive
years as a director, this Option shall continue to be exercisable during its
term as if the Optionee had remained a non-employee director.
(b) Death. In the event of the Optionee's death while a member
of the Board of Directors or within the period after termination of service
during which the Option is exercisable by the Optionee in accordance with this
Paragraph 8, the Option shall be exercisable, to the extent then exercisable,
until the first to occur of (i) the expiration of the remaining term of the
Option or (ii) one year after the date of the Optionee's death.
9. No Guaranteed Term of Office. Nothing in this Option shall be deemed
an agreement or condition guaranteeing to the Optionee any particular term of
office or limiting the right of the Company, the Board of Directors or the
shareholders to terminate the Optionee's term of office under the circumstances
set forth in the Company's Certificate of Incorporation or Bylaws, or as
otherwise provided by law.
10. Adjustments. In the event of any change in the outstanding Common
Stock of the Company, such as merger, consolidation, reorganization, stock
split, stock dividend, combination of shares or exchange of shares, the Board or
the Committee shall adjust appropriately the maximum number and class of shares
subject to the Option and/or the Option Price, except that any fractional shares
resulting from such adjustments shall be eliminated by rounding any portion of a
share equal to .500 or greater up, and any portion of a share equal to less than
..500 down, in each case to the nearest whole number.
11. Notices. Any notice to be given to the Company shall be addressed
to the Company at 000 Xxxxxxx Xxxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000, and
any notice given to the Optionee shall be addressed to the Optionee at the
address then appearing on the records of the Company, or at such other address
as either party hereafter may designate in writing to the other. Any such notice
shall be deemed to have been duly given when deposited in the United States
mail, addressed as aforesaid, registered, or certified mail, and with proper
postage, registration, and certification fees prepaid, or transmitted by hand
delivery or overnight express.
IN WITNESS WHEREOF, the Company has granted this Option as of the _____
day of ________, ____.
NEOWARE SYSTEMS, INC.
By: ______________________________________
_________, CHIEF FINANCIAL OFFICER
ACKNOWLEDGMENT AND AGREEMENT:
Optionee acknowledges receipt of this Agreement and the 1995 Plan and
agrees to all of the terms and conditions contained herein and therein.
OPTIONEE: __________________________________
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