STARMET CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
1. Grant of Option. Starmet Corporation, a Massachusetts corporation,
whose principal place of business is at 0000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000 (the "Company") hereby grants to [NAME OF OPTIONEE], an individual whose
address is set forth below the optionee signature line (the "Optionee"), an
option, pursuant to the Company's 1998 Stock Plan (the "Plan"), to purchase an
aggregate of [NUMBER OF SHARES] shares of common stock, $.10 par value per
share, of the Company ("Common Stock") at a price of $[EXERCISE PRICE] per
share, purchasable as set forth in and subject to the terms and conditions of
this option agreement (this "Agreement") and the Plan. Except where the context
otherwise requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Sections 424(e) and 424(f)
of the Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code"). The Plan has been approved by the stockholders of the Company. No
rights and obligations of the parties pursuant to this Agreement shall conflict
with such stockholder approval.
2. Non-Qualified Stock Option. This option not is intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
(a) Vesting Schedule. Except as otherwise provided in this
Agreement, this option may be exercised as to one-third (1/3rd) of the total
number of shares from and after one year from the date of grant, as to
two-thirds (2/3rds) of the total number of shares from and after two years from
the date of grant, and as to the whole number of shares from and after three
years from the date of grant and prior to the tenth anniversary of the date of
grant (hereinafter the "Expiration Date").
(b) Exercise Procedure. Subject to the conditions set forth in
this Agreement, this option shall be exercised by the Optionee's delivery of
written notice of exercise to the Company, specifying the number of shares to be
purchased and the purchase price to be paid therefor and accompanied by payment
in full in accordance with Section 4. Such exercise shall be effective upon
receipt by the Company of such written notice together with the required
payment. The Optionee may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for less than one whole share.
(c) Continuous Relationship with Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or she exercises this option, is, and has been at
all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company (an "Eligible Optionee").
For all purposes of this option, (i) "employment" shall be defined in accordance
with the provisions of Section 1.421-7(h) of the Income Tax Regulations or any
successor regulations, and (ii) if this option shall be assumed or a new option
substituted
therefor in a transaction to which Section 424(a) of the Code applies,
employment by such assuming or substituting corporation (hereinafter called the
"Successor Corporation") shall be considered for all purposes of this option to
be employment by the Company.
(d) Exercise Period Upon Termination of Relationship with the
Company. If the Optionee ceases to be an Eligible Employee for any reason, then,
except as provided in paragraphs (e) and (f) below, the right to exercise this
option shall terminate three months after such cessation (but in no event after
the Expiration Date), provided that this option shall be exercisable only to the
extent that the Optionee was entitled to exercise this option on the date of
such cessation. Notwithstanding the foregoing, if the Optionee, prior to the
Expiration Date, materially violates any non-competition or confidentiality
provisions of any agreement between the Optionee and the Company, the right to
exercise this option shall terminate immediately upon such violation.
(e) Exercise Period Upon Death or Disability. If the Optionee
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Expiration Date while he or she is an employee of the Company, or
if the Optionee dies within three months after the Optionee ceases to be an
employee of the Company (other than as the result of a discharge for "cause" as
specified in paragraph (f) below), this option shall be exercisable, within the
period of one year following the date of death or disability of the Optionee
(but in no event after the Expiration Date), by the Optionee or by the person to
whom this option is transferred by will or the laws of descent and distribution;
provided that this option shall be exercisable only to the extent that this
option was exercisable by the Optionee on the date of his or her death or
disability. Except as otherwise indicated by the context, the term "Optionee",
as used in this option, shall be deemed to include the estate of the Optionee or
any person who acquires the right to exercise this option by bequest or
inheritance or otherwise by reason of the death of the Optionee.
(f) Discharge for Cause. If the Optionee, prior to the
Expiration Date, ceases his or her employment with the Company because he or she
voluntarily resigns or is discharged for "Cause" (as defined below), the right
to exercise this option shall terminate immediately upon such cessation of
employment. "Cause" is conduct, as determined by the Board of Directors,
involving one or more of the following: (i) gross misconduct by the optionee
which is materially injurious to the Company; or (ii) the commission of an act
of embezzlement, fraud or deliberate disregard of the rules or policies of the
Company which results in material economic loss, damage or injury to the
Company; or (iii) the unauthorized disclosure of any trade secret or
confidential information of the Company or any third party who has a business
relationship with the Company or the violation of any noncompetition covenant or
assignment of inventions obligation with the Company; or (iv) the commission of
any act which induces any customer or prospective customer of the Company to
break a contract with the Company or to decline to do business with the Company;
or (v) the conviction of the optionee of a felony involving any financial
impropriety or which would materially interfere with the optionee's ability to
perform his or her services for the Company or otherwise be injurious to the
Company; or (vi) the failure of the optionee to perform in a
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material respect his or her employment obligations without proper cause. In
making such determination, the Board of Directors shall act fairly and in utmost
good faith. For the purposes of this subsection (f), termination of employment
shall be deemed to occur when the optionee receives notice that his or her
employment is terminated.
4. Payment of Purchase Price
(a) Method of Payment. Payment of the purchase price for
shares purchased upon exercise of this option shall be made (i) by delivery to
the Company of cash or a certified or bank check to the order of the Company in
an amount equal to the purchase price of such shares, (ii) subject to the
consent of the Company, by delivery to the Company of shares of Common Stock of
the Company then owned by the Optionee having a fair market value equal in
amount to the purchase price of such shares, (iii) subject to the consent of the
Company, by the delivery of an assignment to the Company of a sufficient amount
of the proceeds from the sale of the Common Stock acquired upon exercise of this
option and an authorization to the broker or selling agent to pay that amount to
the Company, which sale shall be at the Optionee's direction at the time of
exercise, (iv) by any other means (including, without limitation, by delivery of
a promissory note of the Optionee payable on such terms as are specified by the
Board of Directors) which the Board of Directors determines are consistent with
the purpose of the Plan and with applicable laws and regulations (including,
without limitation, the provisions of Rule 16b-3 under the Securities Exchange
Act of 1934 and Regulation T promulgated by the Federal Reserve Board), or (v)
by any combination of such methods of payment.
(b) Valuation of Shares or Other Non-Cash Consideration
Tendered in Payment of Purchase Price. For the purposes hereof, unless a
recognized market value is available, the fair market value of any share of the
Company's Common Stock or other non-cash consideration which may be delivered to
the Company in exercise of this option shall be determined in good faith by the
Board of Directors of the Company.
(c) Delivery of Shares Tendered in Payment of Purchase Price.
If the Optionee exercises this option by delivery of shares of Common Stock of
the Company, the certificate or certificates representing the shares of Common
Stock of the Company to be delivered shall be duly executed in blank by the
Optionee or shall be accompanied by a stock power duly executed in blank
suitable for purposes of transferring such shares to the Company. Fractional
shares of Common Stock of the Company will not be accepted in payment of the
purchase price of shares acquired upon exercise of this option.
(d) Restrictions on Use of Option Stock. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in payment
of the purchase price of shares purchased upon exercise of this option if the
shares to be so tendered were acquired within twelve (12) months before the date
of such tender through the exercise of an option granted under the Plan or any
other stock option or restricted stock plan of the Company.
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5. Delivery of Shares; Compliance With Securities Laws, Etc.
(a) General. The Company shall, upon payment of the option
price for the number of shares purchased and paid for, make prompt delivery of
such shares to the Optionee; provided that if any law or regulation requires the
Company to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action.
(b) Listing, Qualification, Etc. This option shall be subject
to the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject hereto
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.
6. Nontransferability of Option. This option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) nor shall any such rights be
subject to execution, attachment or similar process except that this option may
be transferred (i) as provided in paragraph (e) of Section 3 above or (ii)
pursuant to a qualified domestic relations order as defined in Section 414(p) of
the Code. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of this option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon this option or such
rights, this option and such rights shall, at the election of the Company,
become null and void.
7. No Special Employment Rights. Nothing contained in the Plan or this
option shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Optionee for the period
within which this option may be exercised, or for any other period.
8. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
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9. Adjustment Provisions
(a) General. If, through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased, decreased or exchanged for a different number or
kind of shares or other securities of the Company, or (ii) additional shares or
new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, the Optionee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 15(a) of the Plan.
(b) Board Authority to Make Adjustments. Any adjustments under
this Section 9 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued pursuant to this
option on account of any such adjustments.
10. Mergers, Consolidation, Distributions, Liquidations Etc. In the
event of a consolidation or merger or sale of all or substantially all of the
assets of the Company in which outstanding shares of Common Stock are exchanged
for securities, cash or other property of any other corporation or business
entity, or in the event of a liquidation of the Company, prior to the Expiration
Date or termination of this option, the Optionee shall, with respect to this
option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 16 of the
Plan.
Notwithstanding any other provision of this Agreement, this
option shall not be accelerated or exercisable, if, but only to the extent that,
such acceleration or exercise would, taking into account any other consideration
to be received by the Optionee from the Company, cause the Optionee to be in
receipt of an excess parachute payment as defined in Section 280G of the Code.
11. Withholding Taxes. The Company's obligation to deliver shares of
Common Stock upon the exercise of this option shall be subject to the Optionee's
satisfaction of all applicable federal, state, local and foreign taxes of any
kind required by law to be withheld with respect to any shares issued upon
exercise of this option.
12. Limitations on Certain Dispositions. The Optionee agrees, by
accepting this option, that if the Company offers any of its Common Stock for
sale pursuant to a registration statement under the Securities Act, the Optionee
will not, directly or indirectly, without the prior written consent of the
Company, sell, offer or agree to sell, grant any option to purchase or otherwise
transfer or dispose of any shares of Common Stock purchased upon exercise of
this option for a period of 180 days after the effective date of such
registration statement.
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13. Interpretation of this Agreement. All decisions and interpretations
made by the Committee, as defined in Section 2 of the Plan, with regard to any
question arising under the Plan or this Agreement shall be binding and
conclusive on the Company and the Optionee and any other person entitled to
exercise this option as provided herein. In the event there is any inconsistency
between the provisions of this Agreement and of the Plan, the provisions of the
Plan shall govern.
14. Miscellaneous
(a) Except as provided herein, this option may not be amended
or otherwise modified unless evidenced in writing and signed by the Company and
the Optionee.
(b) All notices under this option shall be mailed or delivered
by hand to the parties at their respective addresses set forth beneath their
names below or at such other address as may be designated in writing by either
of the parties to one another.
(c) This option shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
Date of Grant:
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STARMET CORPORATION
By:
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Xxxxxx X. Xxxxx, President
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OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Stock Plan.
OPTIONEE:
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[NAME OF OPTIONEE]
Address:
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