EXHIBIT 99.3
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INCENTIVE STOCK OPTION AGREEMENT
NATIONAL DATACOMPUTER, INC.
AGREEMENT made as of the ___ day of _______ 200_, between
National
Datacomputer, Inc. (the "Company"), a Delaware corporation and
____________, an
employee of the Company (the "Employee").
WHEREAS, the Company desires to grant to the Employee an Option
to
purchase shares of its common stock, $.001 par value per share (the
"Shares"),
under and for the purposes set forth in the Company's 2007
Employee, Director
and Consultant Stock Plan (the "Plan");
WHEREAS, the Company and the Employee understand and agree that
any
terms used and not defined herein have the same meanings as in the
Plan; and
WHEREAS, the Company and the Employee each intend that the
Option
granted herein qualify as an ISO.
NOW, THEREFORE, in
consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the
parties hereto
agree as follows:
1. GRANT OF
OPTION.
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The Company hereby grants to the Employee the right and option
to
purchase all or any part of an aggregate of ________________
Shares, on the
terms and conditions and subject to all the limitations set forth
herein, under
United States securities and tax laws, and in the Plan, which is
incorporated
herein by reference. The Employee acknowledges receipt of a copy of
the Plan.
2. PURCHASE
PRICE.
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The purchase price of the Shares covered by the Option shall be
$____
per Share, subject to adjustment, as provided in the Plan, in the
event of a
stock split, reverse stock split or other events affecting the
holders of Shares
after the date hereof (the "Purchase Price"). Payment shall be made
in
accordance with Paragraph 9 of the Plan.
3.
EXERCISABILITY OF OPTION.
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Subject to the terms and conditions set forth in this Agreement and
the
Plan, the Option granted hereby shall become exercisable as
follows:
On the first anniversary of the date
up to _________ Shares
of this
Agreement
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On the second anniversary of the date
an additional _________ Shares
of this
Agreement
On the third anniversary of the date
an additional _________ Shares
of this
Agreement
On the fourth anniversary of the date
an additional _________ Shares
of this
Agreement
The foregoing rights are cumulative and are subject to the other
terms
and conditions of this Agreement and the Plan.
Notwithstanding the foregoing, in the event of a Change of Control
(as
defined below), __% of the Shares which would have vested in each
vesting
installment remaining under this Option will be vested for purposes
of Section
24(B) of the Plan unless this Option has otherwise expired or been
terminated
pursuant to its terms or the terms of the Plan.(1)
Change of Control means the occurrence of any of the following
events:
(i)
Ownership. Any "Person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) becomes the "Beneficial Owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the
total voting power represented by the Company's then
outstanding voting securities (excluding for this purpose
the Company or its Affiliates or any employee benefit plan
of the Company) pursuant to a transaction or a series of
related transactions which the Board of Directors does not
approve; or
(ii) Merger/Sale of Assets. A merger or
consolidation of the
Company whether or not approved by the Board of Directors,
other than a merger or consolidation which would result in
the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving entity or the parent of such
corporation) at least 50% of the total voting power
represented by the voting securities of the Company or such
surviving entity or parent of such corporation outstanding
immediately after such merger or consolidation, or the
stockholders of the Company approve an agreement for the
sale or disposition by the Company of all or substantially
all of the Company's assets; or
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(iii) Change in Board
Composition. A change in the composition of
the Board of Directors, as a result of which fewer than a
majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date the Plan was
approved by the directors, or (B) are elected, or nominated
for election, to the Board of Directors with the
affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but
shall not include an individual whose election or
nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to the
Company).
4. TERM OF
OPTION.
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This Option shall terminate ten years from the date of this
Agreement
or, if the Employee owns as of the date hereof more than 10% of the
total
combined voting power of all classes of capital stock of the
Company or an
Affiliate, five years from the date of this Agreement, but shall be
subject to
earlier termination as provided herein or in the Plan.
If the Employee ceases to be an employee of the Company or of
an
Affiliate (for any reason other than the death or Disability of the
Employee or
termination of the Employee's employment for "cause" (as defined in
the Plan),
the Option may be exercised, if it has not previously terminated,
within three
months after the date the Employee ceases to be an employee of the
Company or an
Affiliate, or within the originally prescribed term of the Option,
whichever is
earlier, but may not be exercised thereafter except as set forth
below. In such
event, the Option shall be exercisable only to the extent that the
Option has
become exercisable and is in effect at the date of such cessation
of employment.
If the Employee ceases to be an employee of the Company or of
an
Affiliate but continues after termination of employment to provide
service to
the Company or an Affiliate as a consultant, this Option shall
continue to vest
in accordance with Section 3 above as if this Option had not
terminated until
the Employee is no longer providing services to the Company. In
such case, this
Option shall automatically convert and be deemed a Non-Qualified
Option as of
the date that is three months from termination of the Employee's
employment and
this Option shall continue on the same terms and conditions set
forth herein
until such Employee is no longer providing service to the Company
or an
Affiliate.
Notwithstanding the foregoing, in the event of the Employee's
Disability or death within three months after the termination of
employment, the
Employee or the Employee's Survivors may exercise the Option within
one year
after the date of the Employee's termination of employment, but in
no event
after the date of expiration of the term of the Option.
In the event the Employee's employment is terminated by the
Employee's
employer for "cause" (as defined in the Plan), the Employee's right
to exercise
any unexercised portion of this Option shall cease immediately as
of the time
the Employee is notified his or her employment is terminated for
"cause," and
this Option shall thereupon terminate. Notwithstanding anything
herein to the
contrary, if subsequent to the Employee's termination as an
employee, but prior
to
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<PAGE>
the exercise of the Option, the Board of Directors of the Company
determines
that, either prior or subsequent to the Employee's termination, the
Employee
engaged in conduct which would constitute "cause," then the
Employee shall
immediately cease to have any right to exercise the Option and this
Option shall
thereupon terminate.
In the event of the Disability of the Employee, as determined
in
accordance with the Plan, the Option shall be exercisable within
one year after
the Employee's termination of employment or, if earlier, within the
term
originally prescribed by the Option. In such event, the Option
shall be
exercisable:
(a) to the extent that
the Option has become exercisable but has not
been exercised as of the date of Disability; and
(b) in the event
rights to exercise the Option accrue periodically, to
the extent of a pro rata portion through the date of Disability
of
any additional vesting rights that would have accrued on the
next
vesting date had the Employee not become Disabled. The
proration
shall be based upon the number of days accrued in the current
vesting period prior to the date of Disability.
In the event of the death of the Employee while an employee of
the
Company or of an Affiliate, the Option shall be exercisable by the
Employee's
Survivors within one year after the date of death of the Employee
or, if
earlier, within the originally prescribed term of the Option. In
such event, the
Option shall be exercisable:
(x) to the extent that
the Option has become exercisable but has not
been exercised as of the date of death; and
(y) in the event
rights to exercise the Option accrue periodically, to
the extent of a pro rata portion through the date of death of
any
additional vesting rights that would have accrued on the next
vesting date had the Employee not died. The proration shall be
based upon the number of days accrued in the current vesting
period
prior to the Employee's date of death.
5. METHOD OF
EXERCISING OPTION.
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Subject to the terms and conditions of this Agreement, the Option
may
be exercised by written notice to the Company or its designee, in
substantially
the form of Exhibit A attached hereto. Such notice shall state the
number of
Shares with respect to which the Option is being exercised and
shall be signed
by the person exercising the Option. Payment of the purchase price
for such
Shares shall be made in accordance with Paragraph 9 of the Plan.
The Company
shall deliver such Shares as soon as practicable after the notice
shall be
received, provided, however, that the Company may delay issuance of
such Shares
until completion of any action or obtaining of any consent, which
the Company
deems necessary under any applicable law (including, without
limitation, state
securities or "blue sky" laws). The Shares as to which the Option
shall have
been so exercised shall be registered in the Company's share
register in the
name of the person so exercising the Option (or, if the Option
shall be
exercised by the
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<PAGE>
Employee and if the Employee shall so request in the notice
exercising the
Option, shall be registered in the name of the Employee and another
person
jointly, with right of survivorship) and shall be delivered as
provided above to
or upon the written order of the person exercising the Option. In
the event the
Option shall be exercised, pursuant to Section 4 hereof, by any
person other
than the Employee, such notice shall be accompanied by appropriate
proof of the
right of such person to exercise the Option. All Shares that shall
be purchased
upon the exercise of the Option as provided herein shall be fully
paid and
nonassessable.
6. PARTIAL
EXERCISE.
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Exercise of this Option to the extent above stated may be made in
part
at any time and from time to time within the above limits, except
that no
fractional share shall be issued pursuant to this Option.
