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EXHIBIT 10.19
KEY EMPLOYEE OPTION
(PERFORMANCE GRANT)
THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT AS SPECIFIED HEREIN. NEITHER THE RIGHTS REPRESENTED
BY THIS OPTION NOR THE SHARES ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED FOR OFFER OR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE LAW.
SUCH RIGHTS AND SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN
WHOLE OR IN PART EXCEPT IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
Option No.: ___________________________________
Holder: ___________________________________
NAME
___________________________________
ADDRESS
___________________________________
CITY, STATE & ZIP CODE
Date of
Grant of
this Option: _______________________________________
Number of
Option Shares:_______________________________________
Option
Exercise
Price Per
Share: U.S.$______________________________
XXXXX MICROCOMPUTER PRODUCTS, INC.
NONQUALIFIED OPTION TO PURCHASE COMMON STOCK
Xxxxx Microcomputer Products, Inc., a Georgia corporation (the
"Company"), hereby certifies that the above-named individual designated on the
line entitled "Holder", the registered holder hereof, or its permitted
registered assigns to whom notice has been given by the Company ("Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company
upon surrender of this Option, at any time or times on or after Vesting hereof
but not after 5:30 P.M., Atlanta, Georgia time, on the Expiration Date (as
defined herein), up to the number of shares set forth above of the Company's
fully paid nonassessable shares, as adjusted pursuant to this Option (the
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"Option Shares"), of Common Stock (as defined herein) of the Company as are
Vested at the time of exercise, by payment of the applicable aggregate Option
Exercise Price (as defined herein) in lawful money of the United States.
1. Definitions. The following words and terms as used in this Option
shall have the following meanings:
(a) "Common Stock" means (i) the Company's common stock, (ii)
any capital stock into which such "Common Stock" shall have been changed or any
capital stock resulting from a reclassification of such "Common Stock", and
(iii) the capital stock of any company for which the Company's common stock is
exchangeable in a merger transaction, whether or not the Company is the
surviving corporation, as contemplated in Section 4 hereof.
(b) "Convertible Securities" means any securities issued by
the Company which are convertible into or exchangeable for, directly or
indirectly, shares of Common Stock.
(c) "Date of this Option" means the date set forth above in
the heading of this Option.
(d) "Expiration Date" means the earlier of ten (10) years from
the date of the granting of this Option, or the date of termination of the
Option pursuant to subsections 12(a) and (b) hereof.
(e) "Average Share Price" means the highest average Market
Price per share averaged over any period of twenty (20) consecutive trading days
in any calendar quarter.
(f) "Market Price" means the market value of one share
determined as follows: (i) where there exists a public market for the Company's
Common Stock at the time of such exercise, the market value per share shall be
the average of the closing bid and asked prices of the Common Stock quoted in
the Over-The-Counter Market Summary or the last reported sale price of the
Common Stock or the closing price quoted on the NASDAQ National Market System or
on any exchange on which the Common Stock is listed, whichever is applicable, as
published in The Wall Street Journal on any trading day.
(g) "Option Exercise Price" shall initially be the price per
share as set forth on the first page hereof and shall be adjusted and readjusted
from time to time as provided in this Option.
(h) "Public Offering" means (i) the closing of a firm
commitment underwritten Public Offering pursuant to an effective registration
statement under the Securities Act covering the offer and sale of the Company's
Common Stock , or (ii) any transaction or series of related transactions in
which all of the outstanding shares of the Company are exchanged for shares or a
combination of cash and shares of another entity whose common shares are
publicly traded on the NASDAQ National Market System, the American Stock
Exchange, or the New York Stock Exchange.
(i) "Securities Act" means the Securities Act of 1933, as
amended.
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(j) "Vesting" or "Vested" shall have the meaning set forth in
Section 2(e) hereof.
(k) Other Definitional Provisions.
(i) Except as otherwise specified herein, all
references herein (A) to any person other than the Company, shall be
deemed to include such person's successors and permitted assigns, (B)
to the Company shall be deemed to include the Company's successors and
(C) to any applicable law defined or referred to herein, shall be
deemed references to such applicable law as the same may have been or
may be amended or supplemented from time to time.
(ii) When used in this Option, the words
"herein," "hereof," and "hereunder," and words of similar import, shall
refer to this Option as a whole and not to any provision of this
Option, and the words "Section," "Schedule," and "Exhibit" shall refer
to Sections of, and Schedules and Exhibits to, this Option unless
otherwise specified.
(iii) Whenever the context so requires the neuter
gender includes the masculine or feminine, and the singular number
includes the plural, and vice versa.
(iv) Any capitalized term not otherwise defined
in this Option shall have the meaning ascribed to such term in that
certain Shareholders' Agreement dated as of April 16, 1996 (the
"Shareholders' Agreement"), by and among the Company, Xxxxxx X. Xxxxx
and the Shareholders.
(v) The "Plan" shall mean the Xxxxx
Microcomputer Products, Inc. Stock Option Plan.
2. Exercise of Option.
(a) Subject to the terms and conditions hereof including the
conditions to Vesting, this Option may be exercised in whole or in part, at any
time during normal business hours on or after Vesting to the extent the
conditions for Vesting and the other conditions to exercise set forth in Section
2(e) hereof have been satisfied, and prior to 5:30 p.m., Atlanta, Georgia time,
on the Expiration Date. The rights represented by this Option may be exercised
by the holder hereof then registered on the books of the Company, in whole or
from time to time in part (except that this Option shall not be Vested as to a
fractional share), by (i) delivery of a written notice, in the form of the
Subscription Notice attached as Exhibit A hereto, of such holder's election to
exercise this Option, which notice shall specify the number of Option Shares to
be purchased, (ii) payment to the Company of an amount equal to the Option
Exercise Price multiplied by the number of Option Shares as to which the Option
is being exercised (plus any applicable issue or transfer taxes) in cash, by
wire transfer or by certified or official bank check, for the number of Option
Shares as to which this Option shall have been exercised, and (iii) the
surrender of this Option, properly endorsed, at the principal office of the
Company at the time of such exercise (or at such other agency or office of the
Company as the Company may designate by notice to the Holder). In the event of
any exercise of the rights represented by this Option, a certificate or
certificates for the Option Shares so purchased, registered
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in the name of, or as directed by, the Holder, shall be delivered to, or as
directed by the Holder within a reasonable time, not exceeding 15 days (if the
Company's Common Stock is not then publicly traded) or five (5) business days
(if the Company's Common Stock is then publicly traded), after such rights shall
have been so exercised.
(b) Unless the rights represented by this Option shall have
expired or have been fully exercised, the Company shall issue, within such 15
day or 5 business day period, as applicable, a new Option identical in all
respects to the Option exercised except (x) such new Option shall represent
rights to purchase the number of Option Shares purchasable immediately prior to
such exercise under the Option exercised, less the number of Option Shares with
respect to which such original Option was exercised, and (y) the Option Exercise
Price thereof shall be the Option Exercise Price of the Option exercised. The
person in whose name any certificate for Option Shares is issued upon exercise
of this Option shall for all purposes be deemed to have become the holder of
record of such Option Shares immediately prior to the close of business on the
date on which the Option was surrendered and payment of the amount due in
respect of such exercise and any applicable taxes was made, irrespective of the
date of delivery of such share certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
properly closed, such person shall be deemed to have become the holder of such
Option Shares at the opening of business on the next succeeding date on which
the stock transfer books are open.
(c) In lieu of the Holder exercising this Option (or any
portion hereof) for cash, Holder may, in connection with such exercise, elect to
satisfy the Option Exercise Price by exchanging solely (x) this Option (or such
portion hereof) for (y) that number of Option Shares equal to the product of (i)
the number of shares of Common Stock issuable upon such exercise of the Option
(or, if only a portion of this Option is being exercised, issuable upon the
exercise of such portion) for cash multiplied by (ii) a fraction, (A) the
numerator of which is the Market Price per share of the Common Stock at the time
of such exercise minus the Option Exercise Price per share of the Common Stock
at the time of such exercise, and (B) the denominator of which is the Market
Price per share of the Common Stock at the time of such exercise, such number of
shares so issuable upon such exercise to be rounded up or down to the nearest
whole number of Option Shares.
(d) Notwithstanding anything contained herein, if this Option
constitutes an Incentive Stock Option, then the Option may be exercised by the
original Holder hereof during his or her lifetime only by such original Holder.
(e) The shares of Common Stock covered by this Option shall
become Vested at the earlier to occur of (i) nine (9) years after the Date of
this Option, (ii) any earlier date established by the Board of Directors of the
Company, or (iii) after the Company has completed a Public Offering and only to
the extent Vested (herein called "Vesting" or "Vested") by the attainment of a
certain Average Share Price, which achieves Vesting of the corresponding
percentage Vesting of the Option Shares in accordance with the following Vesting
schedule:
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Vesting Schedule
Percentage of Option Cumulative
Shares Which May Percentage of Option
Average Share Price Be Exercised Shares Vested
------------------- -------------------- --------------------
Less than $24.19 0.0% 0.0%
$24.19 to $28.21 15.0% 15.0%
$28.22 to $32.25 13.0% 28.0%
$32.26 to $36.28 12.0% 40.0%
$36.29 to $40.31 10.5% 50.5%
$40.32 to $44.34 9.5% 60.0%
$44.35 to $48.38 9.0% 69.0%
$48.39 to $52.41 8.5% 77.5%
$52.42 to $56.44 8.0% 85.5%
$56.45 to $60.47 7.5% 93.0%
Over $60.47 7.0% 100.0%
-----
100.0%
For each incremental increase in Average Share Price, the
corresponding additional percentage of all Option Shares covered by this Option
shall become Vested and shall thereafter be and remain Vested in accordance
herewith; provided that such Vested Option Shares may be exercised only upon and
after the earlier to occur of (1) the Holder's leaving the employ of the
Company, or (2) the first anniversary of Xxxxxx's continuous full-time
employment with the Company. The Average Share Price shall be calculated for
each calendar quarter after a Public Offering and shall be based on the highest
average trading price for twenty (20) consecutive trading days for each quarter.
Once a particular level of Average Share Price is achieved, the percentage of
the Option Shares which are deemed Vested at that level in accordance with the
above Vesting Schedule shall be cumulative of all other percentage shares Vested
at the lower Average Share Price levels as shown on the chart above, and shall
thereafter remain Vested, even if the Average Share Price thereafter falls below
the level previously attained. Such calculation of Average Share Price shall
terminate on the sixth (6th) anniversary of the date of this Option, and the
percentage of Option Shares which have become Vested in accordance with the
foregoing calculations shall be the total number of Vested Option Shares under
this Plan which may be exercised by Holder in accordance with this Agreement.
3. Covenants as to Common Stock.
(a) The Company covenants and agrees that all Option Shares
which may be issued upon the exercise of the rights represented by this Option
will, upon issuance, be validly issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Option may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of the rights then represented by this Option and
that the par value of said shares will at all times be less than or equal to the
applicable Option Exercise Price.
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(b) If any shares of Common Stock reserved or to be reserved
to provide for the exercise of the rights then represented by this Option
require registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued to the Holder,
then the Company covenants that it will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the case may be.
4. Changes in Capitalization; Merger; Liquidation. For purposes of this
Option, the number of shares covered by each outstanding Option, and the price
per share of each outstanding Option shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting from a
subdivision or combination of shares or the payment of a stock dividend in
shares of Stock to holders of outstanding shares of Stock or any other increase
or decrease in the number of such shares effected without receipt of
consideration by the Company. If the Company shall be the surviving corporation
in any merger or consolidation (other than as a subsidiary of another
corporation), recapitalization, reclassification of shares or similar
reorganization, the holder of each outstanding Option shall be entitled to
purchase, at the same times and upon the same terms and conditions as are
provided in this Option, the number and class of shares of stock or other
securities to which a holder of the number of shares of Stock subject to the
Option at the time of such transaction would have been entitled to receive as a
result of such transaction. In the event of any such changes in capitalization
of the Company, the Board or the Committee will make such adjustments in the
number and class of shares of Stock or other securities and/or the exercise
price with respect to which outstanding Options are Vested to prevent dilution
or enlargement of rights hereunder. Any adjustment pursuant to this Section 4
may provide, in the Board or the Committee's discretion, for the elimination of
any fractional shares that might otherwise become subject to this Stock Option
without payment therefor. In the event of a dissolution or liquidation of the
Company or a sale of substantially all of the stock or substantially all of the
assets of the Company, each outstanding Option shall terminate except to the
extent that another corporation assumes such Option or substitutes another
option therefor. In the event of a merger or consolidation in which the Company
is not the surviving corporation or serves only as a subsidiary of another
corporation, or any other transaction having a similar result or effect, then
the holder of each outstanding Option shall be entitled to purchase, at the same
times and upon the same terms and conditions as are provided in this Option, the
number and class of shares of stock or other securities to which a holder of the
number of shares of Stock subject to the Option at the time of such transaction
would have been entitled to receive as a result of such transaction. In the
event of a change of the Company's shares of Stock with par value into the same
number of shares with a different par value or without par value, the shares
resulting from any such change shall be deemed to be the Stock within the
meaning of this Option. Except as expressly provided in this Section 4, the
holder of an Option shall have no rights by reason of any subdivision or
combination of shares of Stock of any class or the payment of any stock dividend
or any other increase or decrease in the number of shares of Stock of any class
or by reason of any dissolution, liquidation, merger or consolidation or
distribution to the Company's shareholders of assets or stock of another
corporation. Except as expressly provided herein, any issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to this Stock
Option. The Holder understands and agrees that the existence of the Plan and the
Stock Options granted pursuant to the Plan shall not affect in any way the right
or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the
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Company, any issue of debt or equity securities having preferences or priorities
as to the Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or any part of its business or assets, or
any other corporate act or proceeding.
5. Notice of Adjustment of Option Exercise Price. Upon any adjustment
of the Option Exercise Price, then the Company shall give notice thereof to the
Holder of this Option, which notice shall state the Option Exercise Price in
effect after such adjustment and the increase, or decrease, if any, in the
number of Option Shares purchasable at the Option Exercise Price upon the
exercise of this Option, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
6. Computation of Adjustments. Upon each computation of an adjustment
in the Option Exercise Price and the number of shares which may be subscribed
for and purchased upon exercise of this Option, the Option Exercise Price shall
be computed to the nearest cent (i.e. fraction of .5 of a cent, or greater,
shall be rounded to the next highest cent) and the number of shares which may be
subscribed for and purchased upon exercise of this Option shall be calculated to
the nearest whole share (i.e. fractions of less than one half of a share shall
be disregarded and fractions of one half of a share, or greater, shall be
treated as being a whole share). No such adjustment shall be made however, if
the change in the Option Exercise Price would be less than $.001 per share, but
any such lesser adjustment shall be made (i) at the time and together with the
next subsequent adjustment which, together with any adjustments carried forward,
shall amount to $.001 per share or more, or (ii) if earlier, upon the third
anniversary of the event for which such adjustment is required.
7. No Change in Option Terms on Adjustment. Irrespective of any
adjustment in the Option Exercise Price or the number of shares of Common Stock
issuable upon exercise hereof, this Option, whether theretofore or thereafter
issued or reissued, may continue to express the same price and number of shares
as are stated herein and the Option Exercise Price and such number of shares
specified herein shall be deemed to have been so adjusted.
8. Taxes. The Company shall not be required to pay any tax or taxes
attributable to the initial issuance of the Option Shares or any transfer
involved in the issue or delivery of any certificates for Option Shares of
Common Stock in a name other than that of the registered holder hereof or upon
any transfer of this Option.
9. Option Holder Not Deemed a Shareholder. No holder, as such, of this
Option shall be entitled to vote or receive dividends or be deemed the holder of
shares of the Company for any purpose, nor shall anything contained in this
Option be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance of record to the holder of this Option of the
Option Shares which he is then entitled to receive upon the due exercise of this
Option.
10. No Limitation on Corporate Action. No provisions of this Option and
no right or option granted or conferred hereunder shall in any way limit, affect
or abridge the exercise by the Company of any of its corporate rights or powers
to recapitalize, amend its Articles of Incorporation,
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reorganize, consolidate or merge with or into another corporation, or to
transfer all or any part of its property or assets, or the exercise of any other
of its corporate rights and powers.
11. Transfer; Opinions of Counsel; Restrictive Legends. Notwithstanding
anything contained herein, this Option is nontransferable except in the case of
the death of the Holder, in which event the Option may be transferred by the
Last Will and Testament of the deceased Holder or by the laws of descent and
distribution. To the extent applicable, each certificate or other document
evidencing any of the Option Shares shall be endorsed with the legends set forth
below, and Holder covenants that, except to the extent such restrictions are
waived by the Company, Holder shall not transfer the Option Shares without
complying with the restrictions on transfer described in the legends endorsed
thereon;
(a) The following legend, if applicable, under the Securities
Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
(b) If required by the authorities of any state in connection
with the issuance or sale of the Option Shares, the legend required by such
state authority.
(c) The Company shall not be required (i) to transfer on its
books any Option Shares which shall have been transferred in violation of any of
the provisions set forth in this Section 11, or (ii) to treat as owner of such
Option Shares or to accord the right to vote as such owner or to pay dividends
to any transferee to whom such Option Shares shall have been so transferred.
(d) Any legend endorsed on a certificate pursuant to
subsection (a) or (b) of this Section 11 shall be removed (i) if the Option
Shares represented by such certificate shall have been effectively registered
under the Securities Act or otherwise lawfully sold in a public transaction, or
(ii) if the holder of such Option Shares shall have provided the Company with an
opinion from counsel, in form and acceptable to the Company and from attorneys
reasonably acceptable to the Company, stating that a public sale, transfer or
assignment of the Option or the Option Shares may be made without registration.
(e) Any legend endorsed on a certificate pursuant to
subsection (b) of this Section 11 shall be removed if the Company receives an
order of the appropriate state authority authorizing such removal or if the
holder of the Option or the Option Shares provides the Company with an opinion
of counsel, in form and substance acceptable to the Company and from attorneys
reasonably acceptable to the Company, stating that such state legend may be
removed.
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(f) Without in any way limiting the representations set forth
above, Xxxxxx further agrees not to make any disposition of all or any portion
of the Option Shares unless:
(i) There is then in effect a registration
statement under the Securities Act covering such proposed disposition
and such disposition is made in accordance with such registration
statement; or
(ii) Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, (A) if requested by the Company, Holder shall have
furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of the Option Shares under the Securities Act and (B) if
requested by the Company, the transferee shall have furnished to the
Company its agreement to abide by the restrictions on transfer set
forth herein as if it were a purchaser hereunder.
(g) Except as set forth in this Section 11, neither the Option
nor the Option Shares shall be assignable by the Holder or its assignees.
12. Termination of Employment or Death.
(a) Upon termination of Holder's employment with the Company
for any reason at any time, this Option shall expire and shall be immediately
terminated, canceled and of no further effect as to any Option Shares that have
not Vested as of the date of termination. Upon any termination of employment of
the holder for any reason other than for cause, death or disability, any such
Option held at the date of such employment termination may, to the extent
Vested, be exercised within ninety (90) days after the date of such employment
termination. Upon any termination of employment of the holder by reason of
disability, except as otherwise provided in the particular Stock Option
Agreement, any such Option held at the date of such employment termination may,
to the extent Vested, be exercised within twelve (12) months after the date of
such employment termination. If the holder of such an Option dies, except as
otherwise provided in the particular Stock Option Agreement, any such Option
held at the date of death may, to the extent Vested, be exercised by a legatee
or legatees of the holder under the holder's last will, or by the holder's
personal representatives or distributees, within twelve (12) months after the
holder's death. This Section shall not extend the term of the Option specified
pursuant to Section 1(e). For purposes of this Section, employment of a holder
shall not be deemed terminated so long as the holder is employed by the Company,
by a subsidiary of the Company or by another corporation (or a parent or
subsidiary corporation of such other corporation) which has assumed the Option
of the holder. For purposes of this Section 12, the extent to which such an
Option is Vested shall be determined as of the date of termination of
employment. This Option shall automatically terminate as to any Vested Option
Shares not exercised by the dates set forth above.
(b) This Option shall expire and terminate immediately upon
the original Holder hereof being discharged from the employment of this Company
for cause, and all unexercised Options shall be deemed cancelled, void and of no
further effect, whether or not Vested at the time of
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termination. Cause shall be determined by the Compensation Committee in its sole
discretion exercised in good faith.
13. Lost, Stolen, Mutilated or Destroyed Option. If this Option is
lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as it may in its discretion impose (except in the event
of loss, theft, mutilation or destruction while this Option is in possession of
the Company's Escrow Agent, in which events the Company shall be solely
responsible) (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination and tenor as the
Option so lost, stolen, mutilated or destroyed. Any such new Option shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Option shall be at any time
enforceable by anyone.
14. Representation of Holder. The Holder, by the acceptance hereof,
represents that it is acquiring this Option for its own account for investment
and not with a view to, or sale in connection with, any distribution hereof or
of any of the shares of Common Stock or other securities issuable upon the
exercise thereof, nor with any present intention of distributing any of the
same. Upon exercise of this Option, the Holder will confirm in writing, in form
reasonably satisfactory to the Company, such Xxxxxx's investment intent.
15. Notices. All Notices, requests and other communications that the
Holder or the Company is required or elects to give hereunder shall be in
writing and shall be deemed to have been given (a) upon personal delivery
thereof, including by appropriate courier service, five (5) days after delivery
to the courier or, if earlier, upon delivery against a signed receipt therefor
or (b) upon transmission by facsimile or telecopier, which transmission is
confirmed, in either case addressed to the party to be notified at the address
set forth below or at such other address as such party shall have notified the
other parties hereto, by notice given in conformity with this Section 15.
(a) If to the Company:
Xxxxx Microcomputer Products, Inc.
0000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
(b) If to the Holder, to the address set forth on the
first page hereof as the address for Xxxxxx.
16. Miscellaneous. This Option and any term hereof may be changed,
waived, discharged, or terminated except as provided in the Plan only by an
instrument in writing signed by the party or holder hereof against which
enforcement of such change, waiver, discharge or termination is sought. The
headings in this Option are for purposes of reference only and shall not limit
or otherwise affect the meaning hereof.
17. Date. The date of this Option is the date set forth on the first
page hereof. This Option, in all events, shall be wholly void and of no effect
after 5:30 p.m., Georgia time, on the Expiration Date, except that
notwithstanding any other provisions hereof, the provisions of Section
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11 shall continue in full force and effect after such date as to any Option
Shares or other securities issued upon the exercise of this Option.
18. Severability. If any provision of this Option is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way and shall be construed in accordance with the
purposes and tenor and effect of this Option.
19. Governing Law. This Option shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia, without reference
to its conflicts of law principles.
20. Confidentiality. Notwithstanding anything contained herein to the
contrary, if at anytime prior to the exercise of the Option granted hereunder
the Holder communicates or discloses in any way or form to any person or entity
that the Holder is the recipient of or the holder of this or any other option
issued by the Company pursuant to the Plan, then this Option shall immediately
terminate and all rights of Holder hereunder shall be null and void, it being
understood and agreed by Xxxxxx, as evidenced by the acceptance of this Option
by the Holder, that it is of the utmost importance to the Company to have the
Holder hereof keep the issuance to and the receipt of this Option by the Holder
in strictest confidence.
21. Governance by Plan. Notwithstanding anything contained herein, this
Option shall be governed by the Plan, and any term or provision herein which
conflicts or is inconsistent with the Plan shall be deemed to be in accordance
with the applicable term or provision of the Plan.
XXXXX MICROCOMPUTER PRODUCTS, INC.
By:
----------------------------------------
XXXXXX X. XXXXX, Chairman
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EXHIBIT A TO
OPTION
SUBSCRIPTION NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH REGISTERED HOLDER
DESIRES TO EXERCISE THIS OPTION
XXXXX MICROCOMPUTER PRODUCTS, INC.
The undersigned hereby exercises the right to purchase Option Shares
covered by this Option according to the conditions thereof and herewith [makes
payment of $_______________, the aggregate Option Exercise Price of such Option
Shares in full] [tenders solely this Option, or applicable portion hereof, in
full satisfaction of the Option Exercise Price upon the terms and conditions set
forth herein.]
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address ________________________________________________________________________
HOLDER NAME:
By:
----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
[Net] Number of Option Shares Being
Purchased
------------------------------
Dated: ______________, 19__
-12-
13
EXHIBIT D
FIRST AMENDMENT TO
XXXXX MICROCOMPUTER PRODUCTS, INC.
KEY EMPLOYEE OPTION (PERFORMANCE GRANT)
THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT AS SPECIFIED HEREIN. NEITHER THE RIGHTS REPRESENTED
BY THIS OPTION NOR THE SHARES ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED FOR OFFER OR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE LAW.
SUCH RIGHTS AND SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN
WHOLE OR IN PART EXCEPT IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
Xxxxx Microcomputer Products, Inc. (the "Company") has issued to
certain key management employees of the Company certain options to purchase
common stock designated as a Key Employee Option (Performance Grant)
(hereinafter called "Performance Grant Options"). This Amendment hereby amends
each of the outstanding Performance Grant Options as follows:
1. Section 1(h) of each of the Performance Grant Options is hereby
amended as follows: in the first line of Section 1(h) insert "(i)" between the
words "means" and "the," and adding at the end of said Section 1(h) the
following: ", or (ii) any transaction or series of related transactions in which
all of the outstanding shares of the Company are exchanged for shares or a
combination of cash and shares of another entity whose common shares are
publicly traded on the NASDAQ National Market System, the American Stock
Exchange, or the New York Stock Exchange."
2. Section 2(e) of each of the Performance Grant Options is hereby
amended by (A) deleting the word "only" in the second line of said Section 2(e)
and inserting in lieu of said word the following: "at the earlier to occur of
(i) nine (9) years after the Date of this Option, (ii) any earlier date
established by the Board of Directors of the Company, or (iii)...."; and (B)
deleting the words "fifth (5th)" in the fourth line from the end of said Section
2(e) and inserting the words "sixth (6th)."
3. Except as expressly hereby amended, each of the Performance Grant
Options shall remain unchanged and shall remain in full force and effect.
XXXXX MICROCOMPUTER PRODUCTS, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxx
Chairman
14
EXHIBIT 10.19
KEY EMPLOYEE OPTION
(MANAGEMENT GRANT)
THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS SPECIFIED HEREIN.
NEITHER THE RIGHTS REPRESENTED BY THIS OPTION NOR
THE SHARES ISSUABLE UPON THE EXERCISE HEREOF HAVE
BEEN REGISTERED FOR OFFER OR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE LAW. SUCH RIGHTS AND SHARES MAY NOT BE SOLD OR
OFFERED FOR SALE IN WHOLE OR IN PART EXCEPT IN
ACCORDANCE WITH THE PROVISIONS HEREOF.
Option No.:
-----------------------------------
Holder:
-----------------------------------
NAME
-----------------------------------
ADDRESS
-----------------------------------
CITY, STATE & ZIP CODE
Date of
Grant of
this Option:
-----------------------------------
Number of
Option Shares:
-----------------------------------
Option
Exercise
Price Per
Share: U.S.$
------------------------------
XXXXX MICROCOMPUTER PRODUCTS, INC.
OPTION TO PURCHASE COMMON STOCK
Xxxxx Microcomputer Products, Inc., a Georgia corporation (the
"Company"), hereby certifies that the above-named individual designated on the
line entitled "Holder", the registered holder hereof, or its permitted
registered assigns to whom notice has been given by the Company ("Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company
upon surrender of this Option, at any time or times on or after the Exercise
Date hereof but not after 5:30 P.M., Atlanta, Georgia time, on the Expiration
Date (as defined herein), up to the number of shares set forth above of the
Company's fully paid nonassessable shares, as adjusted pursuant to this
15
Option (the "Option Shares"), of Common Stock (as defined herein) of
the Company by payment of the applicable aggregate Option Exercise
Price (as defined herein) in lawful money of the United States.
1. Definitions. The following words and terms as used in this Option
shall have the following meanings:
(a) "Common Stock" means (i) the Company's common stock and
(ii) any capital stock into which such "Common Stock" shall have been changed or
any capital stock resulting from a reclassification of such "Common Stock."
(b) "Convertible Securities" means any securities issued by
the Company which are convertible into or exchangeable for, directly or
indirectly, shares of Common Stock.
(c) "Date of this Option" means the date set forth above
in the heading of this Option.
(d) "Exercise Date" or "Exercise Dates" means the earlier to
occur of (i) the date on which the Company files a registration statement on
Form S-1 (or any similar form) with the Securities and Exchange Commission in
connection with a proposed Initial Public Offering, (ii) the date of the closing
of a Significant Transaction, (iii) nine (9) years after the Date of this
Option, or (iv) any earlier date established by the Board of Directors of the
Company.
(e) "Expiration Date" means ten (10) years from the date of
the granting of this Option.
(f) "Initial Public Offering" means the closing of a firm
commitment underwritten public offering pursuant to an effective registration
statement under the Securities Act covering the offer and sale of the Company's
Common Stock.
(g) "Market Price" means the fair market value of one share
determined as follows: (i) where there exists a public market for the Company's
Common Stock at the time of such exercise, the fair market value per share shall
be the average of the closing bid and asked prices of the Common Stock quoted in
the Over-The-Counter Market Summary or the last reported sale price of the
Common Stock or the closing price quoted on the NASDAQ National Market System or
on any exchange on which the Common Stock is listed, whichever is applicable, as
published in The Wall Street Journal for the five (5) trading days (or such
fewer number of trading days as the Company's Common Stock may have been
publicly traded) ending on the trading day prior to the date of determination of
fair market value and (ii) if at any time the Common Stock is not listed on any
domestic exchange or quoted in the NASDAQ System or the domestic
over-the-counter market, the higher of (A) the book value thereof, as determined
by any firm of independent public accountants of recognized standing selected by
the Board of Directors, as at the last day as of which such determination shall
have been made, or (B) the fair value thereof determined in good faith by the
Board of Directors as of the date which is within 15 days of the date as of
which the determination is to be made (in determining the fair value thereof,
the Board of Directors shall
-2-
16
consider stock market valuations and price to earnings ratios of comparable
companies in similar industries). Notwithstanding the foregoing, in the event
the Option is exercised in connection with the Initial Public Offering, the fair
market value per share shall be the per share price at which registered shares
are sold to the public in the Initial Public Offering. If the holder shall
purchase such shares in conjunction with the closing of any Significant
Transaction, then the fair market value per share shall mean the value received
by the holders of the Company's Common Stock pursuant to such Significant
Transaction for each share of Common Stock, subject to the closing of such
Significant Transaction.
(h) "Option Exercise Price" shall initially be the price per
share as set forth on the first page hereof and shall be adjusted and readjusted
from time to time as provided in this Option.
(i) "Securities Act" means the Securities Act of 1933, as
amended.
(j) "Significant Transaction" means the closing of a merger,
consolidation or reorganization of the Company with or into any other
corporation or corporations in which the Company is not the surviving entity
(other than a mere reincorporation transaction), a sale of all or substantially
all of the assets of the Company, a transaction or series of related
transactions in which the Company issues shares representing more than 50% of
the voting power of the Company, immediately after giving effect to such
transaction, to a person or persons who were not Shareholders (as defined in the
Shareholders' Agreement) immediately prior to such transaction, or any
transaction or series of related transactions in which all of the outstanding
shares of the Company are exchanged for shares or a combination of cash and
shares of another entity whose common shares are publicly traded on the NASDAQ
National Market System, the American Stock Exchange, or the New York Stock
Exchange.
(k) Other Definitional Provisions.
(i) Except as otherwise specified herein, all
references herein (A) to any person other than the Company, shall be
deemed to include such person's successors and permitted assigns, (B)
to the Company shall be deemed to include the Company's successors and
(C) to any applicable law defined or referred to herein, shall be
deemed references to such applicable law as the same may have been or
may be amended or supplemented from time to time.
(ii) When used in this Option, the words "herein,"
"hereof," and "hereunder," and words of similar import, shall refer to
this Option as a whole and not to any provision of this Option, and the
words "Section," "Schedule," and "Exhibit" shall refer to Sections of,
and Schedules and Exhibits to, this Option unless otherwise specified.
(iii) Whenever the context so requires the neuter
gender includes the masculine or feminine, and the singular number
includes the plural, and vice versa.
-3-
17
(iv) Any capitalized term not otherwise defined in
this Option shall have the meaning ascribed to such term in that
certain Shareholders' Agreement dated as of April 16, 1996 (the
"Shareholders' Agreement"), by and among the Company, Xxxxxx X. Xxxxx
and the Shareholders.
(v) The "Plan" shall mean the Xxxxx Microcomputer
Products, Inc. Stock Option Plan.
2. Exercise of Option.
(a) Subject to the terms and conditions hereof including the
conditions to exercisability, this Option may be exercised in whole or in part,
at any time during normal business hours on or after the Exercise Date to the
extent the conditions for exercisability set forth in Section 2(e) hereof have
been satisfied, and prior to 5:30 p.m., Atlanta, Georgia time, on the Expiration
Date. The rights represented by this Option may be exercised by the holder
hereof then registered on the books of the Company, in whole or from time to
time in part (except that this Option shall not be exercisable as to a
fractional share), by (i) delivery of a written notice, in the form of the
Subscription Notice attached as Exhibit A hereto, of such holder's election to
exercise this Option, which notice shall specify the number of Option Shares to
be purchased, (ii) payment to the Company of an amount equal to the Option
Exercise Price multiplied by the number of Option Shares as to which the Option
is being exercised (plus any applicable issue or transfer taxes) in cash, by
wire transfer or by certified or official bank check, for the number of Option
Shares as to which this Option shall have been exercised, and (iii) the
surrender of this Option, properly endorsed, at the principal office of the
Company at the time of such exercise (or at such other agency or office of the
Company as the Company may designate by notice to the Holder). In the event of
any exercise of the rights represented by this Option, a certificate or
certificates for the Option Shares so purchased, registered in the name of, or
as directed by, the Holder, shall be delivered to, or as directed by the Holder
within a reasonable time, not exceeding 15 days (if the Company's Common Stock
is not then publicly traded) or five (5) business days (if the Company's Common
Stock is then publicly traded), after such rights shall have been so exercised.
(b) Unless the rights represented by this Option shall have
expired or have been fully exercised, the Company shall issue, within such 15
day or 5 business day period, as applicable, a new Option identical in all
respects to the Option exercised except (x) such new Option shall represent
rights to purchase the number of Option Shares purchasable immediately prior to
such exercise under the Option exercised, less the number of Option Shares with
respect to which such original Option was exercised, and (y) the Option Exercise
Price thereof shall be the Option Exercise Price of the Option exercised. The
person in whose name any certificate for Option Shares is issued upon exercise
of this Option shall for all purposes be deemed to have become the holder of
record of such Option Shares immediately prior to the close of business on the
date on which the Option was surrendered and payment of the amount due in
respect of such exercise and any applicable taxes was made, irrespective of the
date of delivery of such share certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
properly closed, such person shall be deemed to have become the holder of such
Option Shares at the opening of business on the next succeeding date on which
the stock transfer books are open.
-4-
18
(c) In lieu of the Holder exercising this Option (or any
portion hereof) for cash, Holder may, in connection with such exercise, elect to
satisfy the Option Exercise Price by exchanging solely (x) this Option (or such
portion hereof) for (y) that number of Option Shares equal to the product of (i)
the number of shares of Common Stock issuable upon such exercise of the Option
(or, if only a portion of this Option is being exercised, issuable upon the
exercise of such portion) for cash multiplied by (ii) a fraction, (A) the
numerator of which is the Market Price per share of the Common Stock at the time
of such exercise minus the Option Exercise Price per share of the Common Stock
at the time of such exercise, and (B) the denominator of which is the Market
Price per share of the Common Stock at the time of such exercise, such number of
shares so issuable upon such exercise to be rounded up or down to the nearest
whole number of Option Shares.
(d) Notwithstanding anything contained herein, if this Option
constitutes an Incentive Stock Option, then the Option may be exercised by the
original Holder hereof during his or her lifetime only by such original Holder.
(e) This Option shall become exercisable (herein called
"Vesting") in accordance with the following vesting schedule:
Aggregate
Vesting
---------
(i) One year after the Date of this Option 20%
(ii) Two years after the date of this Option 40%
(iii) Three years after the date of this Option 60%
(iv) Four years after the date of this Option 80%
(v) Five years after the date of this Option 100%
3. Covenants as to Common Stock.
(a) The Company covenants and agrees that all Option Shares
which may be issued upon the exercise of the rights represented by this Option
will, upon issuance, be validly issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Option may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of the rights then represented by this Option and
that the par value of said shares will at all times be less than or equal to the
applicable Option Exercise Price.
(b) If any shares of Common Stock reserved or to be reserved
to provide for the exercise of the rights then represented by this Option
require registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued to the Holder,
then the Company covenants that it will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the case may be.
-5-
19
4. Changes in Capitalization; Merger; Liquidation. For purposes of this
Option, the number of shares covered by each outstanding Option, and the price
per share of each outstanding Option shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting from a
subdivision or combination of shares or the payment of a stock dividend in
shares of Stock to holders of outstanding shares of Stock or any other increase
or decrease in the number of such shares effected without receipt of
consideration by the Company. If the Company shall be the surviving corporation
in any merger or consolidation (other than as a subsidiary of another
corporation), recapitalization, reclassification of shares or similar
reorganization, the holder of each outstanding Option shall be entitled to
purchase, at the same times and upon the same terms and conditions as are
provided in this Option, the number and class of shares of stock or other
securities to which a holder of the number of shares of Stock subject to the
Option at the time of such transaction would have been entitled to receive as a
result of such transaction. In the event of any such changes in capitalization
of the Company, the Board or the Committee will make such adjustments in the
number and class of shares of Stock or other securities and/or the exercise
price with respect to which outstanding Options are exercisable to prevent
dilution or enlargement of rights hereunder. Any adjustment pursuant to this
section 4 may provide, in the Board or the Committee's discretion, for the
elimination of any fractional shares that might otherwise become subject to this
Stock Option without payment therefor. In the event of a dissolution or
liquidation of the Company, a sale of substantially all of the stock or
substantially all of the assets of the Company, a merger or consolidation in
which the Company is not the surviving corporation or services only as a
subsidiary of another corporation, or any other transaction having a similar
result or effect, each outstanding Option shall terminate except to the extent
that another corporation assumes such Option or substitutes another option
therefor. In the event of a change of the Company's shares of Stock with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the Stock
within the meaning of this Option. Except as expressly provided in this section
4, the holder of an Option shall have no rights by reason of any subdivision or
combination of shares of Stock of any class or the payment of any stock dividend
or any other increase or decrease in the number of shares of Stock of any class
or by reason of any dissolution, liquidation, merger or consolidation or
distribution to the Company's shareholders of assets or stock of another
corporation. Except as expressly provided herein, any issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to this Stock
Option. The Holder understands and agrees that the existence of the Plan and the
Stock Options granted pursuant to the Plan shall not affect in any way the right
or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the dissolution
or liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding.
5. Notice of Adjustment of Option Exercise Price. Upon any
adjustment of the Option Exercise Price, then the Company shall give notice
thereof to the Holder of this Option, which notice shall state the Option
Exercise Price in effect after such adjustment and the increase, or decrease, if
any, in the number of Option Shares purchasable at the Option Exercise Price
upon the exercise
-6-
20
of this Option, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
6. Computation of Adjustments. Upon each computation of an
adjustment in the Option Exercise Price and the number of shares which
may be subscribed for and purchased upon exercise of this Option, the
Option Exercise Price shall be computed to the nearest cent (i.e.
fraction of .5 of a cent, or greater, shall be rounded to the next
highest cent) and the number of shares which may be subscribed for and
purchased upon exercise of this Option shall be calculated to the
nearest whole share (i.e. fractions of less than one half of a share
shall be disregarded and fractions of one half of a share, or greater,
shall be treated as being a whole share). No such adjustment shall be
made however, if the change in the Option Exercise Price would be less
than $.001 per share, but any such lesser adjustment shall be made (i)
at the time and together with the next subsequent adjustment which,
together with any adjustments carried forward, shall amount to $.001
per share or more, or (ii) if earlier, upon the third anniversary of
the event for which such adjustment is required.
7. Notice of Certain Events. In case at any time:
(a) the Company shall propose to register any of its Common
Stock under the Securities Act in connection with a public offering of such
Common Stock (other than with respect to a registration statement filed on Form
S-8 or such other similar form then in effect under the Securities Act);
(b) there shall be any capital reorganization, or
reclassification of the capital stock, of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its assets
to, another corporation; or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in one or more of said cases,
the Company shall give notice to the Holder of this Option of the date on which
(i) the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall be given not
less than ten (10) days prior to the record date or the date on which the
transfer books of the Company are to be closed in respect thereto in the case of
an action specified in clause (i) and at least ten (10) days prior to the action
in question in the case of an action specified in clause (ii).
8. No Change in Option Terms on Adjustment. Irrespective of any
adjustment in the Option Exercise Price or the number of shares of Common Stock
issuable upon exercise hereof, this Option, whether theretofore or thereafter
issued or reissued, may continue to express the same price and number of shares
as are stated herein and the Option Exercise Price and such number of shares
specified herein shall be deemed to have been so adjusted.
9. Taxes. The Company shall not be required to pay any tax or
taxes attributable to the initial issuance of the Option Shares or any transfer
involved in the issue or delivery of any
-7-
21
certificates for Option Shares of Common Stock in a name other than that of the
registered holder hereof or upon any transfer of this Option.
10. Option Holder Not Deemed a Shareholder. No holder, as such, of this
Option shall be entitled to vote or receive dividends or be deemed the holder of
shares of the Company for any purpose, nor shall anything contained in this
Option be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance of record to the holder of this Option of the
Option Shares which he is then entitled to receive upon the due exercise of this
Option.
11. No Limitation on Corporate Action. No provisions of this Option and
no right or option granted or conferred hereunder shall in any way limit, affect
or abridge the exercise by the Company of any of its corporate rights or powers
to recapitalize, amend its Articles of Incorporation, reorganize, consolidate or
merge with or into another corporation, or to transfer all or any part of its
property or assets, or the exercise of any other of its corporate rights and
powers.
12. Transfer; Opinions of Counsel; Restrictive Legends. Notwithstanding
anything contained herein, this Option is nontransferable except in the case of
the death of the Holder, in which event the Option may be transferred by the
Last Will and Testament of the deceased Holder or by the laws of descent and
distribution. To the extent applicable, each certificate or other document
evidencing any of the Option Shares shall be endorsed with the legends set forth
below, and Holder covenants that, except to the extent such restrictions are
waived by the Company, Holder shall not transfer the Option Shares without
complying with the restrictions on transfer described in the legends endorsed
thereon;
(a) The following legend, if applicable, under the
Securities Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
(b) If required by the authorities of any state in connection
with the issuance or sale of the Option Shares, the legend required by such
state authority.
(c) The Company shall not be required (i) to transfer on its
books any Option Shares which shall have been transferred in violation of any of
the provisions set forth in this Section 12, or (ii) to treat as owner of such
Option Shares or to accord the right to vote as such
-8-
22
owner or to pay dividends to any transferee to whom such Option Shares
shall have been so transferred.
(d) Any legend endorsed on a certificate pursuant to
subsection (a) or (b) of this section 12 shall be removed (i) if the Option
Shares represented by such certificate shall have been effectively registered
under the Securities Act or otherwise lawfully sold in a public transaction, or
(ii) if the holder of such Option Shares shall have provided the Company with an
opinion from counsel, in form and acceptable to the Company and from attorneys
reasonably acceptable to the Company, stating that a public sale, transfer or
assignment of the Option or the Option Shares may be made without registration.
(e) Any legend endorsed on a certificate pursuant to
subsection (b) of this section 12 shall be removed if the Company receives an
order of the appropriate state authority authorizing such removal or if the
holder of the Option or the Option Shares provides the Company with an opinion
of counsel, in form and substance acceptable to the Company and from attorneys
reasonably acceptable to the Company, stating that such state legend may be
removed.
(f) Without in any way limiting the representations set forth
above, Xxxxxx further agrees not to make any disposition of all or any portion
of the Option Shares unless:
(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or
(ii) Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, (A) if requested by the Company, Holder shall have
furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of the Option Shares under the Securities Act and (B) if
requested by the Company, the transferee shall have furnished to the
Company its agreement to abide by the restrictions on transfer set
forth herein as if it were a purchaser hereunder.
(g) Except as set forth in this section 12, the Option shall
not be assignable by the Holder and its assignees.
13. Termination of Employment or Death.
(a) For Non-Qualified Stock Options, upon any termination of
employment of the holder for any reason other than for cause, death or
disability, any such Option held at the date of such employment termination may,
to the extent exercisable, be exercised within ninety (90) days after the date
of such employment termination. If Xxxxxx's employment with the Company
-9-
23
terminates for any reason prior to the Exercise Date, this Option shall be
immediately terminated, canceled and of no further effect. Upon any termination
of employment of the holder by reason of disability, except as otherwise
provided in the particular Stock Option Agreement, any such Option held at the
date of such employment termination may, to the extent exercisable, be exercised
within twelve (12) months after the date of such employment termination. If the
holder of such an Option dies, except as otherwise provided in the particular
Stock Option Agreement, any such Option held at the date of death may, to the
extent exercisable, be exercised by a legatee or legatees of the holder under
the holder's last will, or by the holder's personal representatives or
distributees, within twelve (12) months after the holder's death. This section
13 shall not extend the term of the Option specified pursuant to section 1(d).
For purposes of this section 13, employment of a holder shall not be deemed
terminated so long as the holder is employed by the Company, by a subsidiary of
the Company or by another corporation (or a parent or subsidiary corporation of
such other corporation) which has assumed the Option of the holder. For purposes
of this section 13, the extent to which such an Option is exercisable shall be
determined as of the date of termination of employment.
(b) For Incentive Stock Options, upon any termination of
employment of the holder for any reason other than for cause, death or
disability, any such Option held at the date of such employment termination may,
to the extent exercisable, be exercised within three (3) months after the date
of such employment termination. If Xxxxxx's employment with the Company
terminates for any reason prior to the Exercise Date, this Option shall be
immediately terminated, cancelled and of no further effect. Upon any termination
of employment of the holder by reason of disability, within the meaning of
section 22(e)(3) of the Code or any successor provision, any such Option held at
the date of such employment termination may, to the extent exercisable, be
exercised within twelve (12) months after the date of such employment
termination. If the holder of such an Option dies, except as otherwise provided
in the particular Stock Option agreement, any such Option held at the date of
death may, to the extent exercisable, be exercised by a legatee or legatees of
the holder under the holder's last will, or by the holder's personal
representatives or distributees, within twelve (12) months after the holder's
death. This section 13 shall not extend the term of the Option specified
pursuant to section 1(d). For purposes of this section 13, employment of a
holder shall not be deemed terminated so long as the holder is employed by the
Company, by a subsidiary of the Company or by another corporation (or a parent
or subsidiary corporation of such other corporation) which has assumed the
Option of the holder in a transaction to which section 424(a) of the Code or any
successor provision is applicable. For purposes of this section 13, the extent
to which such an Option is exercisable shall be determined as of the date of
termination of employment.
(c) (i) If the Holder retires from his or her employment with
the Company with management approval in the sole discretion of the Compensation
Committee of the Company, then the Holder shall remain on the Vesting schedule
and this Option shall be exercisable by such retired Holder at such time(s) as
if the Holder had remained a full-time employee of the Company. Retirement means
permanent cessation of full-time employment. (ii) If a retired Holder resumes
working after retirement, other than on a limited part-time basis, in the sole
discretion of the Compensation Committee, then all unexercised Options shall
immediately terminate. If a retired Holder becomes employed by a competitor of
the Company to any extent and in any capacity after retirement, Holder shall
repay the Company all gain realized directly or indirectly from the exercise
of the Options which became exercisable since the date of retirement, and all
unexercised Options shall be immediately terminated. (iii) If a Holder retires
without management approval in the sole discretion of the Compensation
Committee, then this Option shall immediately terminate in its entirety and be
of no further force and effect.
-10-
24
(d) This Option shall terminate immediately upon the original
Holder hereof being discharged from the employment of this Company for cause,
and all Options shall be deemed cancelled, void and of no further effect,
whether or not exercisable at the time of termination.
14. Lost, Stolen, Mutilated or Destroyed Option. If this Option is
lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as it may in its discretion impose (except in the event
of loss, theft, mutilation or destruction while this Option is in possession of
the Company's Escrow Agent, in which events the Company shall be solely
responsible) (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination and tenor as the
Option so lost, stolen, mutilated or destroyed. Any such new Option shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Option shall be at any time
enforceable by anyone.
15. Representation of Holder. The Holder, by the acceptance hereof,
represents that it is acquiring this Option for its own account for investment
and not with a view to, or sale in connection with, any distribution hereof or
of any of the shares of Common Stock or other securities issuable upon the
exercise thereof, nor with any present intention of distributing any of the
same. Upon exercise of this Option, the Holder will confirm in writing, in form
reasonably satisfactory to the Company, such Xxxxxx's investment intent.
16. Notices. All Notices, requests and other communications that the
Holder or the Company is required or elects to give hereunder shall be in
writing and shall be deemed to have been given (a) upon personal delivery
thereof, including by appropriate courier service, five (5) days after delivery
to the courier or, if earlier, upon delivery against a signed receipt therefor
or (b) upon transmission by facsimile or telecopier, which transmission is
confirmed, in either case addressed to the party to be notified at the address
set forth below or at such other address as such party shall have notified the
other parties hereto, by notice given in conformity with this section 16.
(a) If to the Company:
Xxxxx Microcomputer Products, Inc.
0000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
(b) If to the Holder, to the address set forth on the
first page hereof as the address for Xxxxxx.
17. Miscellaneous. This Option and any term hereof may be changed,
waived, discharged, or terminated except as provided in the Plan only by an
instrument in writing signed by the party or holder hereof against which
enforcement of such change, waiver, discharge or
-11-
25
termination is sought. The headings in this Option are for purposes of
reference only and shall not limit or otherwise affect the meaning
hereof.
18. Date. The date of this Option is the date set forth on the first
page hereof. This Option, in all events, shall be wholly void and of no effect
after 5:30 p.m., Georgia time, on the Expiration Date, except that
notwithstanding any other provisions hereof, the provisions of Section 12 shall
continue in full force and effect after such date as to any Option Shares or
other securities issued upon the exercise of this Option.
19. Severability. If any provision of this Option is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way and shall be construed in accordance with the
purposes and tenor and effect of this Option.
20. Governing Law. This Option shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia, without
reference to its conflicts of law principles.
21. Confidentiality. Notwithstanding anything contained herein to the
contrary, if at anytime prior to the exercise of the Option granted hereunder
the Holder communicates or discloses in any way or form to any person or entity
that the Holder is the recipient of or the holder of this or any other option
issued by the Company pursuant to the Plan, then this Option shall immediately
terminate and all rights of Holder hereunder shall be null and void, it being
understood and agreed by Xxxxxx, as evidenced by the acceptance of this Option
by the Holder, that it is of the utmost importance to the Company to have the
Holder hereof keep the issuance to and the receipt of this Option by the Holder
in strictest confidence.
22. Governance by Plan. Notwithstanding anything contained herein, this
Option shall be governed by the Plan, and any term or provision herein which
conflicts or is inconsistent with the Plan shall be deemed to be in accordance
with the applicable term or provision of the Plan.
XXXXX MICROCOMPUTER PRODUCTS, INC.
By:
-------------------------
XXXXXX X. XXXXX, Chairman
-12-
26
EXHIBIT A TO
OPTION
SUBSCRIPTION NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH REGISTERED HOLDER
DESIRES TO EXERCISE THIS OPTION
XXXXX MICROCOMPUTER PRODUCTS, INC.
The undersigned hereby exercises the right to purchase Option Shares
covered by this Option according to the conditions thereof and herewith [makes
payment of $_______________, the aggregate Option Exercise Price of such Option
Shares in full] [tenders solely this Option, or applicable portion hereof, in
full satisfaction of the Option Exercise Price upon the terms and conditions set
forth herein.]
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
---------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address
------------------------------------------------------------------------
HOLDER NAME:
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
[Net] Number of Option Shares Being
Purchased
---------------------------
Dated: ______________, 19__
-13-
27
EXHIBIT B
FIRST AMENDMENT TO
XXXXX MICROCOMPUTER PRODUCTS, INC.
KEY EMPLOYEE OPTION (MANAGEMENT GRANT)
THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT AS SPECIFIED HEREIN. NEITHER THE RIGHTS REPRESENTED
BY THIS OPTION NOR THE SHARES ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED FOR OFFER OR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE LAW.
SUCH RIGHTS AND SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN
WHOLE OR IN PART EXCEPT IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
Xxxxx Microcomputer Products, Inc. (the "Company") has issued to
certain key management employees of the Company certain options to purchase
common stock designated as a Key Employee Option (Management Grant) (hereinafter
called "Management Grant Options"). This Amendment hereby amends each of the
outstanding Management Grant Options as follows:
1. Section 1(d) of each of the Management Grant Options is hereby
amended by deleting the word "or" in the third line of Section 1(d) of each of
the Management Grant Options, inserting a "," in lieu thereof, and adding at the
end of said Section 1(d) the following: "(iii) nine (9) years after the Date of
this Option, or (iv) any earlier date established by the Board of Directors of
the Company."
2. Section 1(j) of each of the Management Grant Options is hereby
amended by deleting the word "or" in the fourth line of Section 1(j) of each of
the Management Grant Options, substituting a "," in lieu of the word "or," and
adding at the end of Section 1(j) the following: "or any transaction or series
of related transactions in which all of the outstanding shares of the Company
are exchanged for shares or a combination of cash and shares of another entity
whose common shares are publicly traded on the NASDAQ National Market System,
the American Stock Exchange, or the New York Stock Exchange."
3. Except as expressly hereby amended, each of the Management Grant
Options shall remain unchanged and shall remain in full force and effect.
XXXXX MICROCOMPUTER PRODUCTS, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxx
Chairman
28
KEY EMPLOYEE OPTION
(EXECUTIVE GRANT)
THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT AS SPECIFIED HEREIN. NEITHER THE RIGHTS REPRESENTED
BY THIS OPTION NOR THE SHARES ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED FOR OFFER OR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE LAW.
SUCH RIGHTS AND SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN
WHOLE OR IN PART EXCEPT IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
Option No.: ___________________________________
Holder: ___________________________________
NAME
___________________________________
ADDRESS
___________________________________
CITY, STATE & ZIP CODE
Date of
Grant of
this Option: _______________________________________
Number of
Option Shares:_______________________________________
Option
Exercise
Price Per
Share: U.S.$______________________________
XXXXX MICROCOMPUTER PRODUCTS, INC.
OPTION TO PURCHASE COMMON STOCK
Xxxxx Microcomputer Products, Inc., a Georgia corporation (the
"Company"), hereby certifies that the above-named individual designated on the
line entitled "Holder", the registered holder hereof, or its permitted
registered assigns to whom notice has been given by the Company ("Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company
upon surrender of this Option, at any time or times on or after the Exercise
Date hereof but not after 5:30 P.M., Atlanta, Georgia time, on the Expiration
Date (as defined herein), up to the number of
29
shares set forth above of the Company's fully paid nonassessable shares, as
adjusted pursuant to this Option (the "Option Shares"), of Common Stock (as
defined herein) of the Company by payment of the applicable aggregate Option
Exercise Price (as defined herein) in lawful money of the United States.
1. Definitions. The following words and terms as used in this Option
shall have the following meanings:
(a) "Common Stock" means (i) the Company's common stock and
(ii) any capital stock into which such "Common Stock" shall have been changed or
any capital stock resulting from a reclassification of such "Common Stock."
(b) "Convertible Securities" means any securities issued by
the Company which are convertible into or exchangeable for, directly or
indirectly, shares of Common Stock.
(c) "Exercise Date" means the earlier to occur of (i) the date
on which the Company files a registration statement on Form S-1 (or any similar
form) with the Securities and Exchange Commission in connection with a proposed
Initial Public Offering, (ii) the date of the closing of a Significant
Transaction, (iii) if this Option is intended to constitute an Incentive Stock
Option, if the original Holder hereof owned more than ten (10%) percent of the
combined voting power of all classes of Stock of the Company on the date of the
grant hereof, then the exercise date shall be no sooner than five (5) years from
the date of the grant of this Option, (iv) nine (9) years after the date of
grant of this Option, or (v) any earlier date established by the Board of
Directors of the Company.
(d) "Expiration Date" means: the date five (5) years after the
Exercise Date; however, if this Option constitutes an Incentive Stock Option
under applicable provisions of the Internal Revenue Code, as amended (the
"Code"), then notwithstanding the foregoing, the Expiration Date shall be the
earlier of the date described in (i) above or ten (10) years from the date of
the granting of this Option, provided, that if the Exercise Date is the date set
forth in Section 1(c)(iv), then the Expiration Date shall be one (1) year after
such Exercise Date.
(e) "Initial Public Offering" means the closing of a firm
commitment underwritten public offering pursuant to an effective registration
statement under the Securities Act covering the offer and sale of the Company's
Common Stock.
(f) "Market Price" means the fair market value of one share
determined as follows: (i) where there exists a public market for the Company's
Common Stock at the time of such exercise, the fair market value per share shall
be the average of the closing bid and asked prices of the Common Stock quoted in
the Over-The-Counter Market Summary or the last reported sale price of the
Common Stock or the closing price quoted on the NASDAQ National Market System or
on any exchange on which the Common Stock is listed, whichever is applicable, as
published in The Wall Street Journal for the five (5) trading days (or such
fewer number of trading days as the Company's Common Stock may have been
publicly traded) ending on the trading day prior to the
-2-
30
date of determination of fair market value and (ii) if at any time the Common
Stock is not listed on any domestic exchange or quoted in the NASDAQ System or
the domestic over-the-counter market, the higher of (A) the book value thereof,
as determined by any firm of independent public accountants of recognized
standing selected by the Board of Directors, as at the last day as of which such
determination shall have been made, or (B) the fair value thereof determined in
good faith by the Board of Directors as of the date which is within 15 days of
the date as of which the determination is to be made (in determining the fair
value thereof, the Board of Directors shall consider stock market valuations and
price to earnings ratios of comparable companies in similar industries).
Notwithstanding the foregoing, in the event the Option is exercised in
connection with the Initial Public Offering, the fair market value per share
shall be the per share price at which registered shares are sold to the public
in the Initial Public Offering. If the holder shall purchase such shares in
conjunction with the closing of any Significant Transaction, then the fair
market value per share shall mean the value received by the holders of the
Company's Common Stock pursuant to such Significant Transaction for each share
of Common Stock, subject to the closing of such Significant Transaction.
(g) "Option Exercise Price" shall initially be the price per
share as set forth on the first page hereof and shall be adjusted and readjusted
from time to time as provided in this Option.
(h) "Securities Act" means the Securities Act of 1933, as
amended.
(i) "Significant Transaction" means the closing of a merger,
consolidation or reorganization of the Company with or into any other
corporation or corporations in which the Company is not the surviving entity
(other than a mere reincorporation transaction), a sale of all or substantially
all of the assets of the Company, a transaction or series of related
transactions in which the Company issues shares representing more than 50% of
the voting power of the Company, immediately after giving effect to such
transaction, to a person or persons who were not Shareholders (as defined in the
Shareholders' Agreement) immediately prior to such transaction, or any
transaction or series of related transactions in which all of the outstanding
shares of the Company are exchanged for shares or a combination of cash and
shares of another entity whose common shares are publicly traded on the NASDAQ
National Market System, the American Stock Exchange, or the New York Stock
Exchange.
(j) Other Definitional Provisions.
(i) Except as otherwise specified herein, all
references herein (A) to any person other than the Company, shall be
deemed to include such person's successors and permitted assigns, (B)
to the Company shall be deemed to include the Company's successors and
(C) to any applicable law defined or referred to herein, shall be
deemed references to such applicable law as the same may have been or
may be amended or supplemented from time to time.
-3-
31
(ii) When used in this Option, the words
"herein," "hereof," and "hereunder," and words of similar import, shall
refer to this Option as a whole and not to any provision of this
Option, and the words "Section," "Schedule," and "Exhibit" shall refer
to Sections of, and Schedules and Exhibits to, this Option unless
otherwise specified.
(iii) Whenever the context so requires the neuter
gender includes the masculine or feminine, and the singular number
includes the plural, and vice versa.
(iv) Any capitalized term not otherwise defined
in this Option shall have the meaning ascribed to such term in that
certain Shareholders' Agreement dated as of April 16, 1996, (the
"Shareholders' Agreement"), by and among the Company, Xxxxxx X. Xxxxx
and the Shareholders.
(v) The "Plan" shall mean the Xxxxx
Microcomputer Products, Inc. Stock Option Plan.
2. Exercise of Option.
(a) Subject to the terms and conditions hereof, this Option
may be exercised in whole or in part, at any time during normal business hours
on or after the Exercise Date and prior to 5:30 p.m., Atlanta, Georgia time, on
the Expiration Date. The rights represented by this Option may be exercised by
the holder hereof then registered on the books of the Company, in whole or from
time to time in part (except that this Option shall not be exercisable as to a
fractional share), by (i) delivery of a written notice, in the form of the
Subscription Notice attached as Exhibit A hereto, of such holder's election to
exercise this Option, which notice shall specify the number of Option Shares to
be purchased, (ii) payment to the Company of an amount equal to the Option
Exercise Price multiplied by the number of Option Shares as to which the Option
is being exercised (plus any applicable issue or transfer taxes) in cash, by
wire transfer or by certified or official bank check, for the number of Option
Shares as to which this Option shall have been exercised, and (iii) the
surrender of this Option, properly endorsed, at the principal office of the
Company at the time of such exercise (or at such other agency or office of the
Company as the Company may designate by notice to the Holder). In the event of
any exercise of the rights represented by this Option, a certificate or
certificates for the Option Shares so purchased, registered in the name of, or
as directed by, the Holder, shall be delivered to, or as directed by the Holder
within a reasonable time, not exceeding 15 days (if the Company's Common Stock
is not then publicly traded) or five (5) business days (if the Company's Common
Stock is then publicly traded), after such rights shall have been so exercised.
(b) Unless the rights represented by this Option shall have
expired or have been fully exercised, the Company shall issue, within such 15
day or 5 business day period, as applicable, a new Option identical in all
respects to the Option exercised except (x) such new Option shall represent
rights to purchase the number of Option Shares purchasable immediately prior to
such exercise under the Option exercised, less the number of Option Shares with
respect to which such original Option was exercised, and (y) the Option Exercise
Price thereof shall be the Option Exercise
-4-
32
Price of the Option exercised. The person in whose name any certificate for
Option Shares is issued upon exercise of this Option shall for all purposes be
deemed to have become the holder of record of such Option Shares immediately
prior to the close of business on the date on which the Option was surrendered
and payment of the amount due in respect of such exercise and any applicable
taxes was made, irrespective of the date of delivery of such share certificate,
except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are properly closed, such person shall be deemed
to have become the holder of such Option Shares at the opening of business on
the next succeeding date on which the stock transfer books are open.
(c) In lieu of the Holder exercising this Option (or any
portion hereof) for cash, Holder may, in connection with such exercise, elect to
satisfy the Option Exercise Price by exchanging solely (x) this Option (or such
portion hereof) for (y) that number of Option Shares equal to the product of (i)
the number of shares of Common Stock issuable upon such exercise of the Option
(or, if only a portion of this Option is being exercised, issuable upon the
exercise of such portion) for cash multiplied by (ii) a fraction, (A) the
numerator of which is the Market Price per share of the Common Stock at the time
of such exercise minus the Option Exercise Price per share of the Common Stock
at the time of such exercise, and (B) the denominator of which is the Market
Price per share of the Common Stock at the time of such exercise, such number of
shares so issuable upon such exercise to be rounded up or down to the nearest
whole number of Option Shares.
(d) Notwithstanding anything contained herein, if this Option
constitutes an Incentive Stock Option, then the Option may be exercised by the
original Holder hereof during his or her lifetime only by such original Holder.
3. Covenants as to Common Stock.
(a) The Company covenants and agrees that all Option Shares
which may be issued upon the exercise of the rights represented by this Option
will, upon issuance, be validly issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Option may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of the rights then represented by this Option and
that the par value of said shares will at all times be less than or equal to the
applicable Option Exercise Price.
(b) If any shares of Common Stock reserved or to be reserved
to provide for the exercise of the rights then represented by this Option
require registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued to the Holder,
then the Company covenants that it will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the case may be.
4. Changes in Capitalization; Merger; Liquidation. For purposes of this
Option, the number of shares covered by each outstanding Option, and the price
per share of each outstanding Option shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting from a
subdivision or combination of shares or the payment of a stock dividend
-5-
33
in shares of Stock to holders of outstanding shares of Stock or any other
increase or decrease in the number of such shares effected without receipt of
consideration by the Company. If the Company shall be the surviving corporation
in any merger or consolidation (other than as a subsidiary of another
corporation), recapitalization, reclassification of shares or similar
reorganization, the holder of each outstanding Option shall be entitled to
purchase, at the same times and upon the same terms and conditions as are
provided in this Option, the number and class of shares of stock or other
securities to which a holder of the number of shares of Stock subject to the
Option at the time of such transaction would have been entitled to receive as a
result of such transaction. In the event of any such changes in capitalization
of the Company, the Board or the Committee will make such adjustments in the
number and class of shares of Stock or other securities and/or the exercise
price with respect to which outstanding Options are exercisable to prevent
dilution or enlargement of rights hereunder. Any adjustment pursuant to this
section 4 may provide, in the Board or the Committee's discretion, for the
elimination of any fractional shares that might otherwise become subject to this
Stock Option without payment therefor. In the event of a dissolution or
liquidation of the Company, a sale of substantially all of the stock or
substantially all of the assets of the Company, a merger or consolidation in
which the Company is not the surviving corporation or services only as a
subsidiary of another corporation, or any other transaction having a similar
result or effect, each outstanding Option shall terminate except to the extent
that another corporation assumes such Option or substitutes another option
therefor. In the event of a change of the Company's shares of Stock with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the Stock
within the meaning of this Option. Except as expressly provided in this section
4, the holder of an Option shall have no rights by reason of any subdivision or
combination of shares of Stock of any class or the payment of any stock dividend
or any other increase or decrease in the number of shares of Stock of any class
or by reason of any dissolution, liquidation, merger or consolidation or
distribution to the Company's shareholders of assets or stock of another
corporation. Except as expressly provided herein, any issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to this Stock
Option. The Holder understands and agrees that the existence of the Plan and the
Stock Options granted pursuant to the Plan shall not affect in any way the right
or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the dissolution
or liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding.
5. Notice of Adjustment of Option Exercise Price. Upon any adjustment
of the Option Exercise Price, then the Company shall give notice thereof to the
Holder of this Option, which notice shall state the Option Exercise Price in
effect after such adjustment and the increase, or decrease, if any, in the
number of Option Shares purchasable at the Option Exercise Price upon the
exercise of this Option, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
-6-
34
6. Computation of Adjustments. Upon each computation of an adjustment
in the Option Exercise Price and the number of shares which may be subscribed
for and purchased upon exercise of this Option, the Option Exercise Price shall
be computed to the nearest cent (i.e. fraction of .5 of a cent, or greater,
shall be rounded to the next highest cent) and the number of shares which may be
subscribed for and purchased upon exercise of this Option shall be calculated to
the nearest whole share (i.e. fractions of less than one half of a share shall
be disregarded and fractions of one half of a share, or greater, shall be
treated as being a whole share). No such adjustment shall be made however, if
the change in the Option Exercise Price would be less than $.001 per share, but
any such lesser adjustment shall be made (i) at the time and together with the
next subsequent adjustment which, together with any adjustments carried forward,
shall amount to $.001 per share or more, or (ii) if earlier, upon the third
anniversary of the event for which such adjustment is required.
7. Notice of Certain Events. In case at any time:
(a) the Company shall propose to register any of its Common
Stock under the Securities Act in connection with a public offering of such
Common Stock (other than with respect to a registration statement filed on Form
S-8 or such other similar form then in effect under the Securities Act);
(b) there shall be any capital reorganization, or
reclassification of the capital stock, of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its assets
to, another corporation; or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in one or more of said cases,
the Company shall give notice to the Holder of this Option of the date on which
(i) the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall be given not
less than ten (10) days prior to the record date or the date on which the
transfer books of the Company are to be closed in respect thereto in the case of
an action specified in clause (i) and at least ten (10) days prior to the action
in question in the case of an action specified in clause (ii).
8. No Change in Option Terms on Adjustment. Irrespective of any
adjustment in the Option Exercise Price or the number of shares of Common Stock
issuable upon exercise hereof, this Option, whether theretofore or thereafter
issued or reissued, may continue to express the same price and number of shares
as are stated herein and the Option Exercise Price and such number of shares
specified herein shall be deemed to have been so adjusted.
9. Taxes. The Company shall not be required to pay any tax or taxes
attributable to the initial issuance of the Option Shares or any transfer
involved in the issue or delivery of any certificates for Option Shares of
Common Stock in a name other than that of the registered holder hereof or upon
any transfer of this Option.
-7-
35
10. Option Holder Not Deemed a Shareholder. No holder, as such, of this
Option shall be entitled to vote or receive dividends or be deemed the holder of
shares of the Company for any purpose, nor shall anything contained in this
Option be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance of record to the holder of this Option of the
Option Shares which he is then entitled to receive upon the due exercise of this
Option.
11. No Limitation on Corporate Action. No provisions of this Option and
no right or option granted or conferred hereunder shall in any way limit, affect
or abridge the exercise by the Company of any of its corporate rights or powers
to recapitalize, amend its Articles of Incorporation, reorganize, consolidate or
merge with or into another corporation, or to transfer all or any part of its
property or assets, or the exercise of any other of its corporate rights and
powers.
12. Transfer; Opinions of Counsel; Restrictive Legends. Notwithstanding
anything contained herein, this Option is nontransferable except in the case of
the death of the Holder, in which event the Option may be transferred by the
Last Will and Testament of the deceased Holder or by the laws of descent and
distribution. To the extent applicable, each certificate or other document
evidencing any of the Option Shares shall be endorsed with the legends set forth
below, and Holder covenants that, except to the extent such restrictions are
waived by the Company, Holder shall not transfer the Option Shares without
complying with the restrictions on transfer described in the legends endorsed
thereon;
(a) The following legend, if applicable, under the Securities
Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
(b) If required by the authorities of any state in connection
with the issuance or sale of the Option Shares, the legend required by such
state authority.
(c) The Company shall not be required (i) to transfer on its
books any Option Shares which shall have been transferred in violation of any of
the provisions set forth in this Section 12, or (ii) to treat as owner of such
Option Shares or to accord the right to vote as such owner or to pay dividends
to any transferee to whom such Option Shares shall have been so transferred.
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(d) Any legend endorsed on a certificate pursuant to
subsection (a) or (b) of this section 12 shall be removed (i) if the Option
Shares represented by such certificate shall have been effectively registered
under the Securities Act or otherwise lawfully sold in a public transaction, or
(ii) if the holder of such Option Shares shall have provided the Company with an
opinion from counsel, in form and acceptable to the Company and from attorneys
reasonably acceptable to the Company, stating that a public sale, transfer or
assignment of the Option or the Option Shares may be made without registration.
(e) Any legend endorsed on a certificate pursuant to
subsection (b) of this section 12 shall be removed if the Company receives an
order of the appropriate state authority authorizing such removal or if the
holder of the Option or the Option Shares provides the Company with an opinion
of counsel, in form and substance acceptable to the Company and from attorneys
reasonably acceptable to the Company, stating that such state legend may be
removed.
(f) Without in any way limiting the representations set forth
above, Xxxxxx further agrees not to make any disposition of all or any portion
of the Option Shares unless:
(i) There is then in effect a registration
statement under the Securities Act covering such proposed disposition
and such disposition is made in accordance with such registration
statement; or
(ii) Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, (A) if requested by the Company, Holder shall have
furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of the Option Shares under the Securities Act and (B) if
requested by the Company, the transferee shall have furnished to the
Company its agreement to abide by the restrictions on transfer set
forth herein as if it were a purchaser hereunder.
(g) Except as set forth in this section 12, the Option shall
not be assignable by the Holder and its assignees.
13. Termination of Employment or Death.
(a) For Non-Qualified Stock Options, upon any termination of
employment of the holder for any reason other than for cause, death or
disability, any such Option held at the date of such employment termination may,
to the extent exercisable, be exercised within ninety (90) days after the date
of such employment termination. Upon any termination of employment of the holder
by reason of disability, except as otherwise provided in the particular Stock
Option Agreement, any such Option held at the date of such employment
termination may, to the extent exercisable, be exercised within twelve (12)
months after the date of such employment termination. If the holder of such an
Option dies, except as otherwise provided in the particular Stock Option
Agreement, any such Option held at the date of death may, to the extent
exercisable, be exercised by a legatee or
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legatees of the holder under the holder's last will, or by the holder's personal
representatives or distributees, within twelve (12) months after the holder's
death. This section 13 shall not extend the term of the Option specified
pursuant to section 1(d). For purposes of this section 13, employment of a
holder shall not be deemed terminated so long as the holder is employed by the
Company, by a subsidiary of the Company or by another corporation (or a parent
or subsidiary corporation of such other corporation) which has assumed the
Option of the holder. For purposes of this section 13, the extent to which such
an Option is exercisable shall be determined as of the date of termination of
employment.
(b) For Incentive Stock Options, upon any termination of
employment of the holder for any reason other than for cause, death or
disability, any such Option held at the date of such employment termination may,
to the extent exercisable, be exercised within three (3) months after the date
of such employment termination. Upon any termination of employment of the holder
by reason of disability, within the meaning of section 22(e)(3) of the Code or
any successor provision, any such Option held at the date of such employment
termination may, to the extent exercisable, be exercised within twelve (12)
months after the date of such employment termination. If the holder of such an
Option dies, except as otherwise provided in the particular Stock Option
agreement, any such Option held at the date of death may, to the extent
exercisable, be exercised by a legatee or legatees of the holder under the
holder's last will, or by the holder's personal representatives or distributees,
within twelve (12) months after the holder's death. This section 13 shall not
extend the term of the Option specified pursuant to section 1(d). For purposes
of this section 13, employment of a holder shall not be deemed terminated so
long as the holder is employed by the Company, by a subsidiary of the Company or
by another corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the Option of the holder in a transaction to
which section 424(a) of the Code or any successor provision is applicable. For
purposes of this section 13, the extent to which such an Option is exercisable
shall be determined as of the date of termination of employment.
(c) This Option shall terminate immediately upon the original
Holder hereof being discharged from the employment of the Company for cause.
14. Lost, Stolen, Mutilated or Destroyed Option. If this Option is
lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as it may in its discretion impose (except in the event
of loss, theft, mutilation or destruction while this Option is in possession of
the Company's Escrow Agent, in which events the Company shall be solely
responsible) (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination and tenor as the
Option so lost, stolen, mutilated or destroyed. Any such new Option shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Option shall be at any time
enforceable by anyone.
15. Representation of Holder. The Holder, by the acceptance hereof,
represents that it is acquiring this Option for its own account for investment
and not with a view to, or sale in connection with, any distribution hereof or
of any of the shares of Common Stock or other securities
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38
issuable upon the exercise thereof, nor with any present intention of
distributing any of the same. Upon exercise of this Option, the Holder will
confirm in writing, in form reasonably satisfactory to the Company, such
Xxxxxx's investment intent.
16. Notices. All Notices, requests and other communications that the
Holder or the Company is required or elects to give hereunder shall be in
writing and shall be deemed to have been given (a) upon personal delivery
thereof, including by appropriate courier service, five (5) days after delivery
to the courier or, if earlier, upon delivery against a signed receipt therefor
or (b) upon transmission by facsimile or telecopier, which transmission is
confirmed, in either case addressed to the party to be notified at the address
set forth below or at such other address as such party shall have notified the
other parties hereto, by notice given in conformity with this section 16.
(a) If to the Company:
Xxxxx Microcomputer Products, Inc.
0000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
(b) If to the Holder, to the address set forth on the
first page hereof as the address for Xxxxxx.
17. Miscellaneous. This Option and any term hereof may be changed,
waived, discharged, or terminated except as provided in the Plan only by an
instrument in writing signed by the party or holder hereof against which
enforcement of such change, waiver, discharge or termination is sought. The
headings in this Option are for purposes of reference only and shall not limit
or otherwise affect the meaning hereof.
18. Date. The date of this Option is the date set forth on the first
page hereof. This Option, in all events, shall be wholly void and of no effect
after 5:30 p.m., Georgia time, on the Expiration Date, except that
notwithstanding any other provisions hereof, the provisions of Section 12 shall
continue in full force and effect after such date as to any Option Shares or
other securities issued upon the exercise of this Option.
19. Severability. If any provision of this Option is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way and shall be construed in accordance with the
purposes and tenor and effect of this Option.
20. Governing Law. This Option shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia, without reference
to its conflicts of law principles.
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21. Confidentiality. Notwithstanding anything contained herein to the
contrary, if at anytime prior to the exercise of the Option granted hereunder
the Holder communicates or discloses in any way or form to any person or entity
that the Holder is the recipient of or the holder of this or any other option
issued by the Company pursuant to the Plan, then this Option shall immediately
terminate and all rights of Holder hereunder shall be null and void, it being
understood and agreed by Xxxxxx, as evidenced by the acceptance of this Option
by the Holder, that it is of the utmost importance to the Company to have the
Holder hereof keep the issuance to and the receipt of this Option by the Holder
in strictest confidence.
22. Governance by Plan. Notwithstanding anything contained herein, this
Option shall be governed by the Plan, and any term or provision herein which
conflicts or is inconsistent with the Plan shall be deemed to be in accordance
with the applicable term or provision of the Plan.
XXXXX MICROCOMPUTER PRODUCTS, INC.
By:
----------------------------------------
XXXXXX X. XXXXX, Chairman
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EXHIBIT A TO
OPTION
SUBSCRIPTION NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH REGISTERED HOLDER
DESIRES TO EXERCISE THIS OPTION
XXXXX MICROCOMPUTER PRODUCTS, INC.
The undersigned hereby exercises the right to purchase Option Shares
covered by this Option according to the conditions thereof and herewith [makes
payment of $_______________, the aggregate Option Exercise Price of such Option
Shares in full] [tenders solely this Option, or applicable portion hereof, in
full satisfaction of the Option Exercise Price upon the terms and conditions set
forth herein.]
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address ________________________________________________________________________
HOLDER NAME:
By:
----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
[Net] Number of Option Shares Being
Purchased
------------------------------
Dated: ______________, 19__
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EXHIBIT C
FIRST AMENDMENT TO
XXXXX MICROCOMPUTER PRODUCTS, INC.
KEY EMPLOYEE OPTION (EXECUTIVE GRANT)
THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT AS SPECIFIED HEREIN. NEITHER THE RIGHTS REPRESENTED
BY THIS OPTION NOR THE SHARES ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED FOR OFFER OR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE LAW.
SUCH RIGHTS AND SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN
WHOLE OR IN PART EXCEPT IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
Xxxxx Microcomputer Products, Inc. (the "Company") has heretofore
issued to certain key executives of the Company certain Key Employee Options
(Executive Grants) (hereinafter called "Executive Grant Options"). This First
Amendment hereby amends each outstanding Executive Grant Option as follows:
1. Section 1(c) of each Executive Grant Option is hereby amended by
deleting the word "or" in the third line of Section 1(c), by deleting the word
"or" in the fourth line of Section 1(c), and substituting in lieu thereof
"(iii)" and by adding at the end of Section 1(c) the following: ", (iv) nine (9)
years after the date of grant of this Option, or (v) any earlier date
established by the Board of Directors of the Company."
2. Section 1(d) of each of the Executive Grant Options is hereby
amended by adding at the end of said Section 1(d) the following: "provided, that
if the Exercise Date is the date set forth in Section 1(c)(iv), then the
Expiration Date shall be one (1) year after such Exercise Date."
3. Section 1(i) of each of the Executive Grant Options is hereby
amended by deleting the word "or" in the fourth line of said Section 1(i) of
each Executive Grant Option, inserting a "," in lieu thereof, and adding at the
end of said Section 1(i) the following: "or any transaction or series of related
transactions in which all of the outstanding shares of the Company are exchanged
for shares or a combination of cash and shares of another entity whose common
shares are publicly traded on the NASDAQ National Market System, the American
Stock Exchange, or the New York Stock Exchange."
4. Except as expressly hereby amended, each of the Executive Grant
Options shall remain unchanged and shall remain in full force and effect.
XXXXX MICROCOMPUTER PRODUCTS, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxx
Chairman
