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Sample Business Contracts

Stock Appreciation Right Agreement - Snap Appliances Inc.

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                             SNAP APPLIANCES, INC.

                       STOCK APPRECIATION RIGHT AGREEMENT


        1. Grant of SAR. The Board of Directors of Snap Appliances, Inc., a
Delaware corporation (the "Company"), hereby grants to the employee named in the
Notice of Grant (the "Awardee"), a Stock Appreciation Right (the "SAR"), subject
to the terms, definitions and provisions of the Snap Appliances, Inc. 2000 Stock
Plan (the "Plan") adopted by the Company, which is incorporated herein by
reference, and pursuant to this SAR agreement (the "Agreement"). Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Agreement. In the event of a conflict between the terms
of the Plan and this Agreement, the Plan shall prevail.

        2. Value of the SAR. The SAR shall entitle the Awardee, upon exercise of
the SAR, to receive from the Company the Distributable Amount in cash, or shares
of Common Stock of the Company, as determined by the Administrator in its
discretion.

        3. Nonassignability of SARs. The SAR is not assignable or transferable
by the Awardee except by will or by the laws of descent and distribution and as
otherwise consistent with the terms of the Plan and this Agreement. During the
lifetime of the Awardee, only the Awardee shall be entitled to exercise the SAR.

        4. Exercise Period. The SAR may be exercised only within the term set
forth in the Notice of Grant and may be exercised during such term only in
accordance with the terms of the Plan and this Agreement.

        5. Method of Exercise. This SAR shall be exercisable by written notice
(in the form attached as Exhibit A) which shall state the election to exercise
the SAR and the number of shares of Common Stock of Snap Appliances, Inc.
("Common Stock") as to which the SAR is to be exercised. Such written notice
shall be signed by the Awardee and shall be delivered in person or by certified
mail to the Company. This SAR shall be deemed to be exercised upon receipt by
the Company of such written notice.

        6. Form of Payment. The Company shall satisfy its obligation upon
exercise of this SAR in cash, or shares of the Company, as determined by the
Administrator in its discretion.

        7. Termination of Status as an Employee. In the event Awardee ceases to
serve as an Employee for any reason, except death or disability, the Awardee may
exercise this SAR during the Termination Period set out in the Notice of Grant,
but only to the extent it was exercisable at the date of such termination (but
in no event later than the "Term/Expiration Date" of this SAR as set forth in
the Notice of Grant). To the extent that Awardee was not entitled to exercise
this SAR at the date of such termination, and to the extent that Awardee does
not exercise this SAR (to the extent otherwise so entitled) within the time
specified herein, this SAR shall terminate.



<PAGE>   2

        8. Tax Consequences. Awardee understands that upon either the grant or
the exercise of this SAR, the Awardee may recognize adverse tax consequences.
Awardee understands that the Company will be required to withhold any tax or
social insurance required from any governmental authority. Awardee is encouraged
to consult with a tax advisor concerning the tax consequences of exercising this
SAR.


        THE COMPANY AND AWARDEE ACKNOWLEDGE THAT THE AWARDEE'S EMPLOYMENT WITH
THE COMPANY SHALL BE "AT-WILL" EMPLOYMENT AND MAY BE TERMINATED BY THE AWARDEE
OR THE COMPANY AT ANY TIME, WITH OR WITHOUT CAUSE OR NOTICE. NOTHING IN THIS
AGREEMENT, NOR IN THE COMPANY'S SAR PLAN WHICH IS INCORPORATED HEREIN BY
REFERENCE, SHALL CONFER UPON AWARDEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH AWARDEE'S
RIGHT OR THE COMPANY'S RIGHT TO TERMINATE AWARDEE'S EMPLOYMENT AT ANY TIME.
AWARDEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN
THE GRANT OF A SAR, SHALL CONFER UPON AWARDEE ANY RIGHTS AS A SHAREHOLDER OF THE
COMPANY.

        Awardee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Agreement subject to all
of the terms and provisions of the Plan. Awardee has reviewed the Plan and this
SAR Agreement in their entirety, has had an opportunity to obtain the advice of
independent counsel prior to executing this Agreement and fully understands all
provisions relating to this Agreement. Awardee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.

AWARDEE:                                    SNAP APPLIANCES, INC.



                                            By:
------------------------------------           ---------------------------------
Signature



                                            Title:
------------------------------------              ------------------------------
Print Name
<PAGE>   3

                             SNAP APPLIANCES, INC.

                    NOTICE OF STOCK APPRECIATION RIGHT GRANT

[Employee's Name and Address]



        Snap Appliances, Inc. (the "Company") has granted ________________
("Awardee") a Stock Appreciation Right ("SAR") covering Shares of Common Stock
of Snap Appliances, Inc. ("Company") as follows:

        Date of Grant:
                                                                 ---------------
        Vesting Start Date:
                                                                 ---------------
        Total Number of Shares Covered by this SAR:
                                                                 ---------------
        Exercise Base Price:                                     $
                                                                 ---------------
        Term/Expiration Date:
                                                                 ---------------

        Vesting: The SAR shall be vested and exercisable as to 25% of the Stock
covered by the SAR twelve months after the Vesting Start Date and as to 1/48 of
the Stock covered by the SAR each month thereafter on the same day of the month
as the Vesting Start Date, subject to the Awardee continuing as an Employee on
the payroll of the Company or an affiliate or subsidiary of the Company on such
dates.

        Termination Period: SAR may be exercised for three (3) months after
Awardee's termination of employment with the Company (but in no event later than
the Expiration Date). Upon disability or death, this SAR may be exercised for
the period of time provided in the Plan.



<PAGE>   4

        By your signature and the signature of the Company's representative
below, you and the Company agree that this SAR is granted under and governed by
the terms and conditions of the Stock Appreciation Right Plan and the Stock
Appreciation Right Agreement, all of which are attached and made a part of this
document.

AWARDEE:                                    SNAP APPLIANCES, INC.



                                            By:
---------------------------------              ---------------------------------
Signature


                                            Title:
---------------------------------                 ------------------------------
Print Name
<PAGE>   5

                              SNAP APPLIANCES, INC.
                STOCK APPRECIATION RIGHT ("SAR") EXERCISE NOTICE

Snap Appliances, Inc.
2001 Logic Drive
San Jose, CA  95124
Attention:  Corporate Secretary

        1. Exercise of SAR. Effective as of today, _______________, 2000, the
undersigned ("Employee") hereby elects to exercise a stock appreciation right
with respect to _________ shares of the Common Stock (the "Shares") of Snap
Appliances, Inc. pursuant to the stock appreciation right agreement ("SAR
Agreement") by and between Employee and Snap Appliances, Inc. ("Company"), dated
_______________and pursuant to the Snap Appliances, Inc. 2000 Stock Plan (the
"Plan").

        2. Representations of Employee. Employee acknowledges that Employee has
received, read and understood the Plan, the SAR Agreement, and the Notice of
Stock Appreciation Right Grant ("Notice of Grant") and agrees to abide by and be
bound by their terms and conditions.

        3. Tax Consultation. Employee understands that Employee may suffer
adverse tax consequences as a result of Employee's exercise of rights under the
SAR Agreement and this Notice. Employee represents that Employee has consulted
with his or her own independent tax advisor in connection with exercising rights
under this SAR and that Employee is not relying on the Company for any tax
advice.

        4. Entire Agreement. The Plan, Notice of Grant, and the SAR Agreement
are incorporated herein by reference and constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of
the Company and Employee with respect to the subject matter hereof, and are
governed by California law except for that body of law pertaining to conflict of
laws.

Submitted by:                               Accepted by:

EMPLOYEE:                                   SNAP APPLIANCES, INC.

                                            By:
---------------------------------              ---------------------------------
(Signature)

                                            Its:
---------------------------------               --------------------------------
Print Name


Address:                                    Address:

                                            2001 Logic Drive
---------------------------------           San Jose, CA  95124

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