EXHIBIT 99.5
NON-QUALIFIED EMPLOYEE
STOCK OPTION AGREEMENT
pursuant to the
SYLVAN LEARNING SYSTEMS, INC.
1998 STOCK INCENTIVE PLAN
1998 Stock Incentive Plan
Optionee:
No. of Shares:
Exercise Price: $
per share
AGREEMENT, executed and dated this
th day of 1998, between Sylvan
Learning Systems, Inc. (the “Company”), and the
Optionee.
WHEREAS, the Optionee is now in the
employ of the Company or a subsidiary of or entity affiliated with
the Company, called collectively the “Company” (as
those terms are defined in the Plan) and the Company desires to
have the Optionee remain in such employ or capacity and to afford
the Optionee the opportunity to acquire stock ownership in the
Company so that the Optionee may have a direct proprietary interest
in the Company’s success; and
WHEREAS, the Company and its
stockholders have approved the Sylvan Learning Systems, Inc. Stock
Incentive Plan (the “Plan”) pursuant to which the
Company may, from time to time, enter into stock option agreements
with certain of its Eligible Employees as therein
defined;
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants and agreements hereinafter
set forth, the parties hereto hereby mutually covenant and agree as
follows:
1.
Optionee’s
Agreement
(a)
In consideration of the
Non-Qualified Stock Options granted to Optionee pursuant to this
Agreement, Optionee agrees and covenants that, except as
specifically authorized by the Company or this Agreement, during
the term of his/her employment and for a period of two (2) years
after Optionee’s employment with the Company is terminated,
by the Optionee or the Company, for any reason:
(i)
Optionee shall not, directly or
indirectly, in any capacity whatsoever anywhere in the World where
the Company itself, or through its franchisees and licenses does
business, either on his/her own behalf or on behalf of any other
person or entity with whom he may be employed or otherwise
associated, compete with the Company or interfere with the business
relationships of the Company in any of the lines of business in
which the Company is engaged as of the date of this Agreement, or
may enter after the date of this Agreement, and for which line or
lines of business Optionee shall have in the course of his
employment with the Company provided services or held duties or
responsibilities.
(ii)
Optionee shall not solicit,
encourage, or induce any franchisees, customers, suppliers,
vendors, or contractors of the Company, or any prospect being
actively pursued by the Company, to terminate or adversely modify
any business relationship with the Company or not to proceed with,
or enter into, any business relationship with the Company,
nor shall Optionee otherwise interfere with any business
relationship between the Company and any of its franchisees,
customers, suppliers, vendors, or contractors; and
(iii)
Optionee shall not solicit,
encourage or induce any employee of the Company to terminate
his/her employment with the Company, employ any person employed by
the Company, or otherwise interfere with or disrupt the
Company’s relationship with other employees.
(b)
Optionee acknowledges and agrees
that the foregoing covenants are reasonable and necessary for the
protection of the Company’s valid business interests and that
a violation of any of the covenants will cause immediate and
irreparable injury to the Company, for which injury there is no
adequate remedy at law. Optionee expressly agrees that in the
event of the actual or threatened breach of such covenants by
him/her, the Company, its successors and assigns shall be entitled
to an immediate injunction by a court of competent jurisdiction
preventing and restraining such breach. In any such action
for injunctive relief, the Company shall be entitled to recover
from Optionee the costs, including reasonable attorney’s
fees, incurred by the Company in the action, in addition to any
other relief awarded by the court. Optionee acknowledges that
the covenant not to engage or compete in the business of
administering computer-based tests or providing computer-based
testing services or facilities may also be enforced by Educational
Testing Service of Princeton, New Jersey, and in this regard,
Optionee acknowledges Educational Testing Service’s standing
to enforce this covenant, and waives any defense Optionee may have
on the basis that Educational Testing Service is not a direct party
to this Agreement.
(c)
It is specifically agreed that each
of the covenants set forth above in Sections 1 a(i), (ii) and (iii)
is severable, and if any of them is determined to be invalid or
unenforceable for any reason, the remaining provisions and portions
of this Section 1 shall be unaffected thereby and shall remain in
full force to the fullest extent permitted by law. If any of
the covenants is held invalid or unenforceable by reason of length
of time, area covered or activity covered, or any combination
thereof, or for any other reason, any court of competent
jurisdiction shall adjust, reduce or otherwise reform any such
covenant to the extent necessary to cure any invalidity and to
protect the interests of the Company to the fullest extent of the
law so that the area, time period and scope of activity restricted
shall be the maximum area, time period and scope of activity the
court deems valid and enforceable, and as reformed such covenant
shall then be enforced.
2.
Grant of Option
(a)
Subject to the terms and conditions
set forth herein, the Company hereby grants to the Optionee during
the period commencing as of the date of this Agreement and ending
on
,
2013 at 11:59 p.m. (the “Option Period”) Non-Qualified
Stock Options to purchase from the Company, at a price of
$ per share,
up to but not exceeding in the
aggregate
shares of the Company’s duly registered Common Stock (the
“Stock”), such number being subject to adjustment as
provided in the Plan.
(b)
Nothing contained in the Plan or
this Agreement, nor the grant of Options herein, shall be construed
or deemed under any circumstances to obligate the Company to
continue the
employment of the Optionee for the
period within which the Options granted may be exercised or for any
other definite period of time, and nothing in the Plan or this
Agreement shall limit or restrict the right of the Company to
terminate the Optionee’s employment at any time, for any
reason, for or without cause.
3.
Exercise of Option
Subject to such other limitations as
may be provided by the Committee (as defined in the Plan), the
Option granted in paragraph 2 of this Agreement may be exercised as
follows:
(a)
The aggregate number of shares of
Stock of the Company optioned by this Agreement shall be divided
into installments, as follows. The first installment, which
shall be in an amount equal to twenty percent (20%) of the shares
optioned hereunder, shall be exercisable, in whole or in part,
commencing
, 2004; the second installment, which shall be in an amount equal
to twenty percent (20%) of the shares optioned hereunder, shall be
exercisable, in whole or in part,
commencing
, 2005; the third installment, which shall be in an amount equal to
twenty percent (20%) of the shares optioned hereunder, shall be
exercisable, in whole or in part,
commencing
, 2006; the fourth installment, which shall be in an amount equal
to twenty percent (20%) of the shares optioned hereunder, shall be
exercisable in whole or in part, commencing
on
, 2007; and the fifth installment, which shall be in an amount
equal to twenty percent (20%) of the shares optioned hereunder,
shall be exercisable, in whole or in part, commencing
on
, 2008. Such installments may be accelerated as provided in
Section 14.4 of the Plan.
(b)
To the extent not exercised,
installments shall accumulate and be exercisable by the Optionee,
in whole or in part, in any subsequent year included in the Option
Period but not later than the expiration of the Option
Period.
(c)
No less than one hundred (100)
shares of Stock may be purchased upon any one exercise of the
Option granted hereby unless the number of shares of Stock
purchased at such time is the total number of shares of Stock in
respect of which the Option hereby granted is then
exercisable.
(d)
In no event shall any Option granted
hereby be exercisable for a fractional share.
(e)
The Committee may in its discretion
place limitations on the extent to which shares of Stock of the
Company may be tendered by the Optionee as payment upon exercise of
an Option.
(f)
From time to time, in its
discretion, the Committee may offer the Optionee the right to
cancel any Options granted hereunder.
4.
Method of Exercising Option and
Payment of Option Price
(a)
The Option hereby granted shall be
exercised by the Optionee by delivering to the Secretary of the
Company, from time to time, on any business day during the Option
Period (the “Exercise Date”), written notice specifying
the number and kind of shares of Stock the Optionee then desires to
purchase (the “Notice”), and either (i) cash, certified
check, bank draft or postal or express money order to the order of
the Company for an amount in United States dollars equal to the
option price for the number of shares of Stock specified in the
Notice (the “Total Option Price”), such payment to be
delivered with the Notice, or (ii) in the discretion of the
Committee, shares of Stock of the Company with a value (determined
in
accordance with paragraph (d) below)
equal to or less than the Total Option Price plus, cash, certified
check, bank draft or postal or express money order to the order of
the Company for an amount in United States dollars equal to the
amount, if any, by which the Total Option Price exceeds the Fair
Market Value of such shares of Stock of the Company (determined in
accordance with paragraph (d) below). In the case of (ii)
above, the Total Option Price shall be delivered to the Secretary
of the Company not later than the end of the first business day
after the Exercise Date. In the event of payment in shares of
Stock, such paymen
