Exhibit 10(kk)
Form of
(Key Executive)
DATA GENERAL CORPORATION
DOMESTIC EMPLOYEE
1998 EMPLOYEE STOCK OPTION AGREEMENT
(Non-qualified Stock Option)
* * *
1998 EMPLOYEE STOCK OPTION AGREEMENT made this __________________, between DATA
GENERAL CORPORATION, a Delaware corporation (hereinafter called the "Company"),
and _______________________________, an employee of the Company or of a
subsidiary of the Company (hereinafter called the "Participant");
W I T N E S S E T H :
WHEREAS, the Company desires, by affording the Participant an
opportunity to purchase shares of its common stock, as hereinafter provided, to
carry out the purpose of the "1998 Employee Stock Option Plan" (hereinafter
referred to as the "Plan"), approved by its directors:
NOW, THEREFORE, in consideration of the premises and of the mutual
promises hereinafter contained, the parties hereto have agreed as follows:
1. Grant of Option. The Company hereby grants to the Participant a
non-qualified stock option (hereinafter called the "Option") to purchase all or
part of an aggregate of ___________ (___) shares of stock (hereinafter referred
to as the "Stock") (such number being subject to adjustment as provided in
Paragraph 11 hereof) on the terms and conditions hereinafter set forth.
2. Incorporation of Plan. Except as hereinafter provided, this
Agreement shall be governed by and be subject to all the terms and conditions
set forth in the Plan as in effect on the date hereof. A copy of the Plan has
been delivered to the Participant and is hereby incorporated by reference.
3. Purchase Price. The purchase price of the shares of Stock covered by
the Option shall be $__________ per share. Payment shall be made in cash, by
certified check or in shares of Common Stock in the manner prescribed in
Paragraph 9 hereof.
4. Term of Option. The term of the Option shall be for a period
commencing on the date hereof and ending on ___________________. The right of
Participant to purchase Stock through the exercise of this Option, wholly or in
part, shall be available to the Participant at any time during the term of this
Option subject to restrictions on the disposition as provided in Paragraph 6
hereof and to the obligation of resale of said Xxxxx as provided in Paragraph 7
hereof.
5. Nontransferability. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Participant only by him, more particularly
(but without limiting generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged, hypothecated in any
way, shall not be assignable by operation of law, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provision hereof, and the levy of any execution, attachment, or similar process
upon the Option, shall be null and void and without effect; provided however,
that if Participant shall die while in the employ of the Company or a subsidiary
of the Company, his executor, personal representative, or administrator shall
have the right to exercise the Option (to the extent that the Participant would
have been entitled to do so at the date of his death) at any time within twelve
(12) months from the date of death in respect of the total number of shares as
to which he would be entitled to exercise his Option at the date of his death.
6. Restrictions on Disposition. Stock acquired by Participant pursuant
to the exercise of an Option is subject to certain restrictions on dispositions
and obligations of resale to the Company as provided in Section 7 of the Plan
and such Stock shall not be sold, transferred, or otherwise disposed of and
shall not be pledged to anyone other than the Company or otherwise hypothecated
until such restrictions lapse. Participant understands and agrees that, if the
Stock is subject to restrictions which have not yet lapsed, certificates
representing such Stock will contain a legend to the effect that the Stock is
subject to certain restrictions on disposition and obligations of resale as
contained in Section 7 of the Plan. Such restrictions against the disposition of
the Stock shall lapse in accordance with the provisions of Exhibit A attached
hereto; provided, however, that the 1998 Employee Stock Option Plan Committee
(the "Committee") shall, in its sole discretion, decide at the time Participant
is granted an Authorized Leave of Absence (as defined in this Paragraph 6),
whether the period of time during which Participant takes an Authorized Leave of
Absence shall be included in determining whether the restrictions against
disposition shall have lapsed in accordance with the provisions of Exhibit A
attached hereto.
In any event, upon the occurrence of the earlier of the death of
Participant, the retirement of Participant with the consent of the Company or
the attainment by Participant of the age of 65 whether or not Participant
retires, the restrictions against disposition which have not otherwise lapsed
under the Plan shall immediately lapse.
For purposes of this Paragraph 6, "Authorized Leave of Absence" shall
mean (a) any period of leave granted to Participant by the Company for reasons
of sickness or disability or for the pursuit of graduate or other academic
studies or for government service or personal or family hardship, or such other
reasons as the Company may in its discretion determine provided that in no event
shall the period of such leave exceed the period granted by the Company and
provided further that unless Participant retires during such leave, Participant
returns to the employment of the Company at the termination of such period; and
(b) absence for military service in the armed forces of the United States under
leave granted by the Company or as required by law, provided Participant returns
to employment within six (6) months of his release from such military service,
or within any longer period during which his right to reemployment is protected
by law.
7. Obligation of Resale. If Participant's employment terminates other
than by retirement with the consent of the Company or by Participant's death,
then the Stock for which Participant has paid the purchase price but on which
restrictions against disposition have not lapsed shall be offered for resale to
the Company at the price paid by Participant. This offer of resale must be in
writing and must be delivered to the Company within thirty (30) days following
termination and certificates for such Stock shall be delivered to the Company
within such thirty-day period. If such Stock is not delivered to the Company
within thirty (30) days following the termination of Participant's employment,
such Stock shall remain subject to the restrictions against disposition and such
restrictions shall not lapse as otherwise provided herein and in the Plan.
Within sixty (60) days following a timely delivery of the Stock, the Company
will compensate Participant (at the original purchase price) for such number of
the shares of the Stock as the Company elects to repurchase and will return to
the Participant any such shares not so purchased. In the event that the Company
declines in writing to repurchase such Stock, such Stock shall remain the
property of Participant and the restrictions against disposition shall lapse at
the rate stated in this Agreement.
8. Employment. Subject to the provisions of Paragraph 5 hereof, this
Option shall be exercisable only by Participant while he is employed by the
Company or a subsidiary of the Company or upon his retirement with the consent
of the Company. If Participant shall retire with the consent of the Company
before his Option shall have terminated, he must exercise the Option within (3)
months after the date on which he ceases to be employed by the Company or a
subsidiary of the Company.
Participant acknowledges and agrees that the Company is not obligated
by this Agreement or the Plan to continue the Participant in its employment, and
this Agreement does not in any manner constitute an employment agreement or
create any rights, benefits, or obligations not specifically set forth herein.
9. Method of Exercising Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Company at its office at 0000 Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000, Attn:
Treasurer. Such notice shall state the election to exercise the Option, and the
number of shares of Stock in respect of which it is being exercised. It shall be
signed by the person or persons so exercising the Option and shall be
accompanied by payment of the full purchase price of such Stock in cash, by
certified check or in shares of Common Stock. If shares of Common Stock are
tendered as payment of the Option exercise price, the value of such shares shall
be their fair market value as of the date of exercise.
If such tender would result in the issuance of fractional shares of
Common Stock, the Participant shall purchase, at the price which reflects the
fair market value of the Stock as of the date of exercise, in cash, by certified
check, or cashier's check such additional fractional shares of Common Stock as
are necessary to result in the issuance to the Participant of an additional
whole share of Stock. The Company shall issue, in the name of the person or
persons exercising the Option, and deliver a certificate or certificates
representing such shares as soon as practicable after the notice and payment
shall be received.
In the event the Option shall be exercised, pursuant to Paragraph 5
hereof, by any person or persons other than the Participant, such notice shall
be accompanied by appropriate proof of the right of such person or persons to
exercise the Option.
Until Participant (or his representative as provided in Paragraph 5
hereof) has been issued a certificate or certificates for the shares as
acquired, Participant shall possess no stockholder rights with respect to any
such Stock.
10. Additional Withholding for Tax Purposes. Upon exercise of an
Option, if the restrictions on any of the shares being purchased thereunder
shall have already lapsed, then the Company will require, at the time of
exercise, an additional payment equal to all applicable withholding taxes which
may be imposed on the difference between the purchase price of such shares and
the fair market value of such shares as of the exercise date (which sum shall be
paid in due course by the Company to the applicable agencies as income taxes
withheld on income resulting from the exercise of the Option).
The Company will also require, in each year during which restrictions
on any shares purchased upon exercise of the Option shall lapse, a payment equal
to all applicable withholding taxes which may be imposed on the difference
between the purchase price of such shares and the fair market value of such
shares as of the date on which the restrictions lapse.
If a Participant elects, in accordance with Section 83(b) of the
Internal Revenue Code of 1986 as amended, and Section 9 of the Plan, to
recognize ordinary income in the year of exercise with respect to the shares
being purchased upon exercise of the Option, then the Company will require at
the time of such election an additional payment equal to all applicable
withholding taxes which may be imposed on the difference between the purchase
price of such shares and the fair market value of such shares as of the exercise
date.
11. Changes in Capital Structure. If all or any portion of the Option
shall be exercised subsequent to any stock dividend splitup, recapitalization,
merger, consolidation, combination or exchange of shares, or otherwise,
occurring after the date hereof, the aggregate number of shares of the Stock
subject to this Agreement and the Option price may be proportionately adjusted,
and any other appropriate changes may be made by the Board of Directors or the
Committee, whose determination shall be conclusive. No fractional share shall be
issued upon any such exercise and the aggregate price shall be reduced on
account of any fractional share not issued. In no event, however, shall
adjustment be made in the rate at which restrictions against disposition lapse
and Participant's obligation of resale, as fixed by Paragraph 6 and 7 hereof.
12. Termination of Option. In the event of the institution of any legal
proceedings directed to the validity of the Plan pursuant to which the Option is
granted, or to any option granted under it, the Company may, in its discretion,
and without incurring any liability therefor to any Participant, terminate the
Option.
13. Change of Control. Notwithstanding any other provision of the Plan
or this Agreement to the contrary, upon a Change of Control (as defined below),
(i) the Option shall become fully and immediately exercisable into free Stock
without restrictions as to disposition or obligations as to resale to the
Company and shall remain exercisable until the earlier to occur of (x) three
months after the termination of employment of the Participant and (y) ten years
after the date of grant of such Option and (ii) all restrictions against
disposition and all obligations of resale to the Company of shares of Stock
acquired by the Participant pursuant to the exercise of the Option as to which
such restrictions and obligations have not otherwise lapsed shall immediately
lapse. For purposes of this Agreement, the term "Change of Control", shall mean:
(i) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 25% or more of either the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities"),
provided, however, that any acquisition by the Company or any of its
subsidiaries, or by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, or by any corporation with
respect to which, following such acquisition, more than 60% of, respectively,
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such acquisition in substantially the same proportion as their ownership,
immediately prior to such acquisition, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be, shall not
constitute a Change of Control; or
(ii) Individuals who, as of January 1, 1991, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board, provided that any individual becoming a director subsequent to
January 1, 1991 whose election, or nomination for election, by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act); or
(iii) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company or of the sale or other disposition of
all or substantially all of the assets of the Company, or a reorganization,
merger or consolidation, in each case, with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation.
14. Enforceability. This agreement shall be binding upon the
Participant, his estate, his personal representatives and beneficiaries.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officer, and the Participant has hereunto set
his hand and seal, all on the day and year first above written.
DATA GENERAL CORPORATION
By: _______________________________
Xxxxxx X. XxXxxxx
Vice President & Treasurer
I have read and understood this Agreement and agree
to be bound by its terms.
_________________________________
Print Name: _______________________
11/98
EXHIBIT A TO
1998 STOCK OPTION AGREEMENT
Dated: ______________________
The Option is immediately exercisable except as otherwise provided in
the Agreement. During the term of this Option, the restrictions against
disposition and obligation of resale to the Company shall lapse so the shares
become freely tradeable ("free shares") in accordance with the following
schedule:
# of Years From Cumulative % of
Date of Option % of Grant Becoming Grant Becoming
Agreement Free Shares Free Shares
__________________ __________________ ___________________
1 year or on ________ 25% =_______ shares 25% =_______ shares
2 years or on ________ 25% =_______ shares 50% =_______ shares
3 years or on ________ 25% =_______ shares 75% =_______ shares
4 years or on ________ 25% =_______ shares 100%=_______ shares
