Directors' Non-qualified Stock Option Agreement

ADVANCED LOGIC RESEARCH, INC.


DIRECTORS' NON-QUALIFIED STOCK OPTION AGREEMENT


This agreement is made as of _______________, 199__ (the "Grant Date"), between ADVANCED LOGIC RESEARCH, INC., a Delaware corporation (the "Company"), and _________________ ("Optionee") (the "Agreement").


WITNESSETH:


WHEREAS, the Company has adopted the Advanced Logic Research, Inc. Directors' Non-Qualified Stock Option Plan (the "Plan"), which Plan is incorporated in this Agreement by reference and made a part of it;


WHEREAS, the Company desires to provide additional incentives and rewards for Optionee's work as a director of the Company; and


WHEREAS, the Company has determined that it would be to the advantage and in the interest of the Company and its stockholders to grant the options provided for in the Agreement to Optionee for that purpose.


NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties to this Agreement hereby agree as follows:


1. Option Grant. Subject to obtaining approval of the Plan by the Company's stockholders, the Company hereby grants to Optionee the right and option to purchase from the Company on the terms and conditions hereinafter set forth, all or any part of an aggregate of ( ) shares of the Common Stock of the Company (the "Stock"). The exercise price of the stock subject to this option shall be $ per share.


2. Option Period. This option shall be exercisable only during the Option Period, and during such Option Period, the exercisability of the option shall be subject to the limitations of paragraph 3 and the vesting provisions of paragraph 4. The Option Period shall commence on the Grant Date and, except as provided in paragraph 3, shall end on the Terminal Date which shall be ten years and one month from the Grant Date.


3. Limits on Option Period. The Option Period may end before the Terminal Date, as follows:


a. If Optionee ceases to be a director on the Company's Board of 2 Directors (the "Board") for any reason other than cause, disability (within the meaning of subparagraph (c)) or death during the Option Period, the Option Period shall terminate one year after the date Optionee ceases to be a director or on the Terminal Date, whichever shall first occur, and the option shall be exercisable only to the extent exercisable under paragraph 4 on the date Optionee ceases to be a director.


b. If Optionee should die while serving on the Company's Board, the Option Period shall end one year after the date of death or on the Terminal Date, whichever shall first occur, and Optionee's executor or administrator or the person or persons to whom Optionee's rights under this option shall pass by will or by the applicable laws of descent and distribution may exercise the entire unexercised portion of this option (or any lesser amount).


c. If Optionee ceases to be a director by reason of disability, as defined below, the Option Period shall end one year after the date Optionee ceases to be a director or on the Terminal Date, whichever shall first occur, and the option shall be exercisable only to the extent exercisable under paragraph 4 on the date Optionee ceases to be a director. For purposes of this subparagraph (c), an individual is permanently and totally disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which as lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Board may require.


d. If Optionee is removed from the Board for cause during the Option Period, the Option Period shall terminate on the date of such Optionee's removal as a director and shall not thereafter be exerci ...