NSTOR TECHNOLOGIES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement"), effective as of March
26, 1999, is made by and between nStor Technologies, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxx (the "Recipient").
In consideration of the mutual covenants herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties agree as follows:
1. Grant of Option. The Company grants to the Recipient an option to
purchase 100,000 shares of the Company's common stock in accordance with the
terms and conditions of this Agreement (the "Option").
2. Option Price. The purchase price of the shares of stock covered by
the Option shall be $2.10 per share.
3. Adjustments in Option. In the event that the outstanding shares of
stock subject to the Option are changed into or exchanged for a different number
or kind of shares of the Company or other securities of the Company by reason of
merger, consolidation, recapitalization, reclassification, stock split, stock
dividend or combination of shares, the shares subject to the Option and the
price per share shall be equitably adjusted to reflect such changes. Such
adjustment in the Option shall be made without change in the total price
applicable to the unexercised portion of the Option (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices)
and with any necessary corresponding adjustment in the Option price per share.
Any such adjustment made by the Company shall be final and binding upon the
Recipient, the Company and all other interested persons.
4. Manner of Exercise. The Option, or any portion thereof, may be
exercised only in accordance with the terms of this Agreement and solely by
delivery to the Secretary of the Company of all of the following items prior to
the time when the Option or such portion becomes unexercisable under the terms
of this Agreement:
(a) Notice in writing signed by the Recipient or the other
person then entitled to exercise the Option or portion thereof, stating
that the Option or portion thereof is thereby exercised, such notice
complying with all applicable rules (if any) established by the
Company;
(b) Full payment (in cash or by cashiers' or certified check)
for the shares with respect to which the Option or portion thereof is
exercised;
1
(c) Full payment (in cash or by cashiers' or certified check)
upon demand of an amount sufficient to satisfy any federal (including
FICA and FUTA amounts), state, and/or local withholding tax
requirements at the time the Recipient or his beneficiary recognizes
income for federal, state, and/or local tax purposes as the result of
the receipt of Shares pursuant to the exercise of the Option or portion
thereof;
(d) Unless a registration statement is filed with the
Securities and Exchange Commission and is effective with respect to the
shares underlying the Option, a bona fide written representation and
agreement, in a form satisfactory to the Company, signed by the
Recipient or other person then entitled to exercise the Option or
portion thereof, stating that the shares of stock are being acquired
for his own account, for investment and without any present intention
of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act of 1933, as amended (the "Act"),
and then applicable rules and regulations thereunder, and that the
Recipient or other person then entitled to exercise such Option or
portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is
contrary to the representation and agreement referred to above. The
Company may, in its absolute discretion, take whatever additional
actions it deems appropriate to ensure the observance and performance
of such representations and agreement and to effect compliance with all
federal and state securities laws or regulations. Without limiting the
generality of the foregoing, the Company may require an opinion of
counsel acceptable to it to the effect that any subsequent transfer of
shares acquired on an Option exercise does not violate the Act and may
issue stop-transfer orders covering such shares.
(e) In the event the Option or any portion thereof shall be
exercised by any person or persons other than the Recipient,
appropriate proof, satisfactory to the Company, of the right of such
person or persons to exercise the Option.
5. Conditions to Issuance of Stock Certificates. The shares of stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
been reacquired by the Company. Such shares shall be fully paid and
nonassessable.
6. Rights of Shareholders. The Recipient shall not be, nor have any of
the rights or privileges of, a shareholder of the Company in respect of any
shares purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
the Recipient.
2
7. Vesting and Exercisability. The Recipient's interest in the Option
shall vest and shall be exercisable as of the date hereof.
8. Duration of Option. The Option shall expire on December 31, 1999.
9. Transfer of Option. Except as otherwise provided in this Section 9,
neither the Option nor any interest or right therein or part thereof shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition is voluntary
or involuntary or by operation of law, by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy)
and any attempted disposition thereof shall be null and void and of no effect;
provided, however, that this Section 9 shall not prevent transfers by will or by
the applicable laws of descent and distribution. In the event of the Recipient's
death, the Option shall be exercisable by the executor or administrator of the
Recipient's estate or by the person or persons to whom the Recipient's rights
under the Option shall pass by the Recipient's will or the applicable laws of
descent and distribution.
10. Notices. Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of its Secretary and
any notice to be given to the Recipient shall be addressed to him at the address
given beneath his signature below. By a notice given pursuant to this Section
10, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Recipient shall,
if the Recipient is then deceased, be given to the Recipient's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 10. Any notice shall
have been deemed duly given when enclosed in a properly sealed envelope
addressed as aforesaid, deposited (with postage prepaid) in a United States
postal receptacle.
11. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
12. Modifications. Any modifications or amendment of any provision of
this Agreement must be in writing and bear the signature of the duly authorized
representatives of both parties.
13. Applicable Law. The validity of this Agreement and the rights,
obligations and relations of the parties hereunder shall be construed and
determined under and in accordance with the laws of the State of Florida therein
as applied to contracts to be performed in Florida between Florida residents.
3
14. Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter hereof, and merges all prior discussions between them and supersedes and
replaces any and every other agreement or understanding which may have existed
between the parties to the extent that any such agreements or understanding
relates to any stock options issued or to be issued to the Recipient.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties as of the date first written above.
NSTOR
TECHNOLOGIES, INC.
By/s/ Xxxx Xxxx
------------------
Xxxx Xxxx
Vice President
Optionee:
/s/Xxxxxxx X. Xxxx
------------------
Xxxxxxx X. Xxxx
4
