Exhibit 10.63
NON-QUALIFIED STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") made as of the 2nd
day of December, 1998 (the "Grant Date"), between MIM Corporation, a Delaware
corporation (the "Company"), and ____________________ (the "Awardee").
WHEREAS the Company desires to afford the Awardee an opportunity to
purchase shares of the common stock, par value $0.0001 per share, of the Company
("Common Stock"), as hereinafter provided, in accordance with the provisions of
the MIM Corporation 1996 Stock Incentive Plan, as amended and restated effective
December 1, 1998, a copy of which is attached (the "Plan").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Awardee the right and
option (the "Option") to purchase all or any part of an aggregate of _________
shares of the Common Stock (the "Shares"). The Option is in all respects limited
and conditioned as hereinafter provided, and is subject to the terms and
conditions of the Plan now in effect and as they may be amended from time to
time (which terms and conditions are and automatically shall be incorporated
herein by reference and made a part hereof and shall control in the event of any
conflict with any other terms of this Option Agreement). It is intended that the
Option granted hereunder be a non-qualified stock option ("NQSO") and NOT an
incentive stock option ("ISO") as such term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS. For purposes of this Agreement, the terms used herein shall
be defined as follows:
(a) CAUSE. The term "Cause" shall mean any of the following:
(1) Commission by Awardee of criminal conduct which involves moral
turpitude;
(2) Acts which constitute fraud or self-dealing on the part of Awardee
against the Company, including, without limitation, misappropriation
or embezzlement;
(3) Willful engagement by Awardee in conduct which is materially
injurious to the Company; or
(4) Gross misconduct by Awardee in the performance of duties as an
employee of the Company, including, without limitation, failure to
obey lawful written instructions of the Board of Directors, any
committee thereof or any executive officer of the Company or failure
to correct any conduct which constitutes a breach of any written
agreement between Awardee and the Company or of any written policy
promulgated by the Board of Directors, any committee thereof or any
executive officer of the Company, in either case after not less than
30 days' notice in writing to Awardee of the Company's intention to
terminate Awardee if such failure is not corrected within the
specified period (or after such shorter notice period if the Company
in good xxxxx xxxxx such shorter notice period to be necessary due to
the possibility of material injury to the Company).
(b) CHANGE OF CONTROL. The term "Change of Control" shall mean the
occurrence of one or more of the following: (i) a "person" or "group" within the
means the meaning of sections 13(d) and 14(d) of the Securities and Exchange Act
of 1934 (the "Exchange Act") becomes the "beneficial owner" (within the meaning
of Rule l3d-3 under the Exchange Act) of securities of the Company (including
options, warrants, rights and convertible and exchangeable securities)
representing 30% or more of the combined voting power of the Company's then
outstanding securities in any one or more transactions unless approved by at
least two-thirds of the Board of Directors then serving at that time; provided,
however, that purchases by employee benefit plans of the Company and by the
Company or its affiliates shall be disregarded; or (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the operating assets of the
Company; or (iii) a merger or consolidation, or a transaction having a similar
effect, where (A) the Company is not the surviving corporation, (B) the majority
of the Common Stock of the Company is no longer held by the stockholders of the
Company immediately prior to the transaction, or (C) the Company's Common Stock
is converted into cash, securities or other property (other than the common
stock of a company into which the Company is merged), unless such merger,
consolidation or similar transaction is with a subsidiary of the Company or with
another company, a majority of whose outstanding capital stock is owned by the
same persons or entities who own a majority of the Company's Common Stock at
such time; or (iv) at any annual or special meeting of stockholders of the
Company at which a quorum is present (or any adjournments or postponements
thereof), or by written consent in lieu thereof, directors (each a "New
Director" and collectively the "New Directors") then constituting a majority of
the Company's Board of Directors shall be duly elected to serve as New Directors
and such New Directors shall have been elected by stockholders of the Company
who shall be an (I) "Adverse Person(s)"; (II) "Acquiring Person(s)"; or (III)
"40% Person(s)" (as each of the terms set forth in (I), (II), and (III) hereof
are defined in that certain Amended and Restated Rights Agreement, dated May 14,
1998, between the Company and American Stock Transfer & Trust Company, as Rights
Agent.
(c) DATE OF TERMINATION. The Awardee's "Date of Termination" shall be the
first day occurring on or after the Reference Date on which the Awardee's
Employment by the Company
and its Subsidiaries and Affiliates is terminated, regardless of the reason for
the termination of Employment; provided that a termination of Employment shall
not be deemed to occur by reason of a transfer of the Awardee between any of the
Company and its Subsidiaries and Affiliates; and further provided that the
Awardee's employment shall not be considered terminated while the Awardee is on
a leave of absence from the Company or a Subsidiary or Affiliate approved by the
Awardee's employer.
(d) DISABILITY. The term "Disability" shall have the meaning provided in
Section 22(e)(3) of the Code.
(e) GOOD REASON. The term Good Reason shall mean any of the following:
(1) The Company fails to continue to employ Awardee in the same
capacity or a comparable or more senior executive capacity, with
substantially the same or more senior duties, responsibilities and
authority;
(2) The Company materially reduces the aggregate amount of
compensation and benefits payable to Awardee or fails to pay when due
any base salary, bonus or other compensation or amount payable to
Awardee, and such failure continues for a period of five (5) days
following the giving of written notice of such failure by Awardee; or
(3) The Company breaches any material provision of this Agreement, and
such breach continues for a period of thirty (30) days following the
giving of written notice of such breach by Awardee.
(f) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. The term "Termination
without Cause or for Good Reason" shall mean the termination of the Awardee's
Employment by the Company and its Subsidiaries and Affiliates for reasons other
than "Cause" or by the Awardee for "Good Reason."
(g) PLAN DEFINITIONS. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan shall have the same
meaning where used in this Agreement.
3. PURCHASE PRICE. The purchase price per share of the Shares under the
Option shall be $ 4.50 (the "Option Price"), being equal to the Fair Market
Value of Common Stock on the Grant Date.
4. TERM. Unless earlier terminated pursuant to any provision of the Plan or
of this Option Agreement, this Option shall expire on the date (the "Expiration
Date") which is the tenth anniversary of June 1, 1999 (the "Reference Date").
This Option shall not be exercisable on or after the Expiration Date.
5. EXERCISE OF OPTION. This Option shall vest and may be exercised as to
one-third of the Shares (rounded to the nearest whole share) on each of the
first three anniversaries of the Grant Date, so that the Option shall be
exercisable as to all Shares on the third such anniversary thereof, PROVIDED,
HOWEVER, that the Option shall be exercisable (i) as to all vested Shares (that
have not been previously forfeited) as of the Awardee's Date of Termination if
such termination occurs by reason of the Awardee's death or Disability or (ii)
as to all vested and unvested Shares (that have not been previously forfeited)
as of the date of a Change in Control if the Awardee's Employment is terminated
within one year following such Change in Control if such termination is without
Cause or if it is for Good Reason. Options that become exercisable in accordance
with the foregoing shall remain exercisable, subject to the provisions contained
in the Plan and in this Option Agreement, until the expiration of the term of
this Option as set forth in Paragraph 4 or until other termination of the
Option.
6. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
Option Agreement and the Plan, the Option may be exercised upon written notice
to the Company at its principal office, which is located at 000 Xxxxxxxxxx Xxxx,
Xxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000; Attention: Corporate Secretary. Such
notice (a suggested form of which is attached) shall state the election to
exercise the Option and the number of Shares with respect to which it is being
exercised; shall be signed by the person or persons so exercising the Option;
shall, if the Company so requests, be accompanied by the investment certificate
referred to in Paragraph 7 hereof and shall be accompanied by payment of the
full Option Price of such Shares. The Option Price shall be paid to the Company:
(a) In cash, or in its equivalent;
(b) In Common Stock previously acquired by the Awardee, provided that if
such shares of Common Stock were acquired through exercise of an ISO or NQSO or
of an option under a similar plan, such shares have been held by the Awardee for
a period of more than 12 months on the date of exercise; or
(c) In such other manner consistent with the Plan and applicable law as
from time to time may be authorized in writing by the Company with respect to
such "cashless" option exercise arrangements as the Company from time to time
may maintain with securities brokers. Any such arrangements and written
authorizations may be terminated at any time by the Company without notice to
the Awardee.
(d) In any combination of (a), (b) and (c) above.
In the event such Option Price is paid, in whole or in part, with shares of
Common Stock, the portion of the Option Price so paid shall be equal to the Fair
Market Value on the date of exercise of the Option of the Common Stock
surrendered in payment of such Option Price.
Upon receipt of such notice and payment, the Company, as promptly as
practicable, shall deliver or cause to be delivered a certificate or
certificates representing the Shares with respect to which the Option is so
exercised. The certificate or certificates for the Shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be exercised by the
Awardee and if the Awardee shall so request in the notice exercising the Option,
shall be registered in the name of the Awardee and the Awardee's spouse,
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising the Option. In the
event the Option shall be exercised by any person or persons after the legal
disability or death of the Awardee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable by the Company.
7. SHARES TO BE PURCHASED FOR INVESTMENT. Unless the Company has
theretofore notified the Awardee that a registration statement covering the
Shares to be acquired upon the exercise of the Option has become effective under
the Securities Act of 1933 and the Company has not thereafter notified the
Awardee that such registration is no longer effective, or unless counsel to the
Company shall be otherwise satisfied that the Awardee would be permitted under
applicable law to immediately resell Shares acquired upon the exercise of the
Option, it shall be a condition to any exercise of this Option that the Shares
acquired upon such exercise be acquired for investment and not with a view to
distribution, and the person effecting such exercise shall submit to the Company
a certificate of such investment intent, together with such other evidence
supporting the same as the Company may request. The Company shall be entitled to
restrict the transferability of the Shares issued upon any such exercise to the
extent necessary to avoid a risk of violation of the Securities Act of 1933 (or
of any rules or regulations promulgated thereunder) or of any state laws or
regulations. Such restrictions may, at the option of the Company, be noted or
set forth in full on the share certificates.
8. NON-TRANSFERABILITY OF OPTION. This Option is not assignable or
transferable, in whole or in part, by the Awardee otherwise than by the laws of
descent and distribution, and during the lifetime of the Awardee the Option
shall be exercisable only by the Awardee or by his guardian or legal
representative.
9. TERMINATION OF OPTION. (a) The unexercised portion of the Option
(whether vested or not) shall automatically terminate and shall become null and
void and be of no further force or effect upon the first to occur of the
following:
(i) The Expiration Date;
(ii) In the case of vested options, the expiration of 30 days from the
Date of Termination of Awardee other than as provided by clause (iii)
below;
(iii) As to vested shares, the expiration of twelve months from the
Date of Termination of Awardee as a result of the Awardee's death,
Disability, Termination without Cause or for Good Reason;
(iv) As to vested and unvested shares, the expiration of twelve months
from the Date of Termination of Awardee if the Awardee's Employment is
terminated within one year following a Change in Control and such
termination is without Cause or if it is for Good Reason.
(v) Immediately if the Awardee ceases to be an employee of the Company
and its Subsidiaries if Awardee is terminated by the Company for
Cause.
10. WITHHOLDING OF TAXES. The obligation of the Company to deliver Shares
upon the exercise of the Option shall be subject to applicable federal, state
and local tax withholding requirements.
If the exercise of this Option is subject to the withholding requirements
of applicable federal tax laws, the Committee may permit the Awardee, subject to
the provisions of the Plan and such additional withholding rules (the
"Withholding Rules") as shall be adopted by the Committee, to satisfy the
minimum federal, state and local withholding tax, in whole or in part, by
electing to have the Company withhold (or by returning to the Company) shares of
Common Stock, which shares shall be valued, for this purpose, at their Fair
Market Value on the date of exercise of the Option (or, if later, the date on
which the Awardee recognizes ordinary income with respect to such exercise) (the
"Determination Date"). An election to use shares of Common Stock to satisfy tax
withholding requirements must be made in compliance with and subject to the
Withholding Rules, and the Committee may not withhold shares in excess of the
number necessary to satisfy the minimum federal, state and local income tax
withholding requirements. In the event shares of Common Stock acquired under the
exercise of an ISO are used to satisfy such withholding requirement, such shares
of Common Stock must have been held by the Awardee for a period of not less than
the holding period described in Section 422(a)(1) of the Code on the
Determination Date, or if such shares of Common Stock were acquired through
exercise of a non-qualified stock option or of an option under a similar plan,
such option was granted to the Awardee at least six months prior to the
Determination Date.
11. GOVERNING LAW. This Option Agreement shall be construed in accordance
with, and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
12. ADMINISTRATION. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of this Agreement by the Committee and
any decision made by it with respect to this Agreement is final and binding.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contracts and other agreements to the extent of any discrepancies contained
between this document and such other document.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be duly executed by its officers thereunto duly authorized, and the
Awardee has hereunto set his hand and seal, all on the day and year first above
written.
MIM CORPORATION
By
--------------------------
Name:
Title:
ACCEPTED AND AGREED TO:
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Awardee
Notice of Exercise of Non-Qualified Stock Option
I hereby exercise the non-qualified stock option granted to me on
_______________________, 199__, by MIM Corporation, with respect to the
following number of shares of the $.0001 par value per share common stock of MIM
Corporation ("Shares") covered by said option:
Number of Shares to be purchased _______________
Option price per Share $______________
Total exercise price $______________
[Check one of the following to indicate method of payment:]
A. Enclosed is cash or its equivalent, in the amount of $_____________,
----- in full payment for such Shares.
B. Enclosed is/are ___________________ Share(s) with a total Fair
----- Market Value of $_______________ on the date hereof in full
payment for such Shares.
C. [Describe any other payment alternatives then available.]
D. Enclosed is cash or its equivalent in the amount of $_________,
----- and _____ Share(s) with a total Fair Market Value of $_________
on the date hereof, in [partial] [full] payment for such Shares.
Please have the certificate or certificates representing the purchased
Shares registered in the following name or names/1/
______________________________________________ and sent to
________________________________________________________________________.
DATED: _____________________, _________.
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Awardee's Signature
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1 Certificates may be registered in the name of the Awardee alone or in the
names of the Awardee and his or her spouse, jointly, with right of survivorship.
