EXHIBIT 10.12.4
THE SYSTEM WORKS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
No. of Shares subject to option: 112,430. Option No. ___________.
This THE SYSTEM WORKS, INC. NONQUALIFIED STOCK OPTION AGREEMENT (the
"Agreement") is made and entered into this 29th day of July, 1988, between THE
SYSTEM WORKS, INC., a Georgia corporation (the "Company"), and ▇▇▇▇ ▇.
BLEND, III (the "Optionee").
W I T N E S S E T H:
SECTION 1. GRANT OF OPTION. Pursuant to the provisions of The System
Works, Inc. Stock Option Plan (the "Plan"), the Company hereby grants to the
Optionee, a non-qualified stock option (the "Option"), subject to the terms and
conditions of the Plan and subject further to the terms and conditions herein
set forth, giving the Optionee the right to purchase from the Company all or any
part of an aggregate 112,430 shares (the "Shares") of the $.01 par value common
stock of the Company at the purchase price of $2.7211 per Share, such Option to
be exercised as hereinafter provided.
SECTION 2. TERMS AND CONDITIONS. It is understood and agreed that the
Option evidenced hereby is subject to the following terms and conditions:
(a) EXPIRATION DATE. Subject to the terms and conditions hereof, this
Option shall be exercisable until, and shall expire on, December 31, 1998.
(b) EXERCISE OF OPTION. This Option may be exercised, to the extent
exercisable by its terms, in whole or in part at any time on and after the date
hereof to the expiration date set forth hereinabove. Any exercise shall be
accompanied by a written notice to the Company, in the form as attached hereto,
appropriately completed, specifying the number of Shares as to which the Option
is being exercised. Any partial exercise must be for at least 100 shares unless
the remaining number of shares available for purchase hereunder is less than
100. Notation of any partial exercise shall be made by the Company on Schedule
A hereto.
(c) PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of any exercise,
the purchase price of the Shares as to which this Option shall be exercised
shall be paid to the Company in cash or with shares of the Company owned by the
Optionee for a period of at least six (6) months before such tender or with a
Promissory Note substantially in the form attached hereto as Exhibit A, or a
combination of cash, shares of the Company or a Promissory Note. The use of a
Promissory Note to pay all or a portion of the total purchase price may be
solely at the Optionee's election if he is employed by the Company on a full-
time basis on the date of exercise, but shall require the Company's written
consent if Optionee is not employed on the date of exercise on such full-time
basis. Shares of the Company tendered in payment for such Shares shall be
valued at an amount equal to (i) the closing bid price for the Company's common
stock quoted on the over-the-counter market for the most recent date prior to
the date of such tender, or (ii) the closing transaction price for the Company's
common stock quoted on a national securities market for the most recent date
prior to the date of such tender, or (iii) in the absence of any such public
quotation, the per Share value determined by the Board of Directors of the
Company.
(d) EXERCISE UPON DEATH OR TERMINATION OF EMPLOYMENT. (1) In the event
of the death of the Optionee, this Option may be exercised by the person or
persons to whom the Optionee's rights under this Option pass by will or
applicable law, or if no such person has such right, by his executors or
administrators, at any time, or from time to time, within the expiration date
specified in subparagraph (a) of this Section 2. (2) If Optionee's employment
with the Company or a Subsidiary shall terminate for any reason, Optionee may
exercise the Option at any time, or from time to time, within the expiration
date specified in subparagraph (a) of this Section 2.
(e) NONTRANSFERABILITY. This Option shall not be transferable other than
by will or by the laws of descent and distribution. During the lifetime of
Optionee, this Option shall be exercisable only by him.
(f) ADJUSTMENTS. In the event of any change in the capital of the Company
by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or any rights
offering to purchase Shares at a price substantially below fair market value, or
of any similar change affecting the Shares, then in any event the number and
kind of shares subject to this Option and their purchase price per share shall
be appropriately adjusted consistent with such change. Any such change shall be
made in accordance with Treasury Regulation Section 1.425-(1)(a) or its
successor regulation or ruling such that the change will not cause a reissuance
of the Option. Any adjustment so made shall be final and binding upon Optionee.
(g) TAX IMPACT ON OPTIONEE. The Optionee shall be responsible for all
federal and state income taxes which he incurs as the result of the exercise of
this Option and the subsequent sale of the Shares acquired thereby. As long as
the Optionee is employed by the Company on a full-time basis, however, the
Company will assist him in paying the tax liability from the exercise of
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this Option, or any part hereof, by (1) lending the Optionee an amount equal to
such tax liability, up to $250,000 in the aggregate, to be repaid within twelve
(12) months after the date of any such loan or loans, or (2) otherwise providing
indirect assistance, up to $250,000 in the aggregate, to Optionee so that he can
fully discharge such tax liability. While the maximum loan amount or indirect
assistance, or combination thereof, shall not exceed an aggregate of $250,000 at
any one time, there shall be no limit to the number of times that Optionee may
obtain such assistance within the time period specified in Section 2(a).
Indirect assistance shall include, but not be limited to guaranteeing or
co-signing the indebtedness of the Optionee incurred to pay any such tax
liability. The Company shall have the right, in its sole discretion, to provide
a loan or indirect assistance to the Optionee, however the form and terms of
such indirect assistance shall be acceptable to the Optionee. Any such loan or
loans to Optionee shall be evidenced by a promissory note, substantially in the
form as attached hereto, appropriately changed and completed.
(h) NO RIGHTS AS STOCKHOLDER. Optionee shall have no rights as a
stockholder with respect to any Shares subject to this Option prior to the date
of issuance to him of a certificate or certificates for such Shares.
(i) NO RIGHT TO CONTINUED EMPLOYMENT. This Option shall not confer upon
Optionee any right with respect to continuance of employment by the Company or
any Subsidiary, nor shall it interfere in any way with the right of his employer
to terminate his employment at any time.
(j) COMPLIANCE WITH LAW AND REGULATIONS. This Option and the obligation
of the Company to sell and deliver Shares hereunder shall be subject to all
applicable laws, rules and regulations, including, but not limited to, those of
the United States and its states, and to such approvals by any governmental or
regulatory agency as may be required.
SECTION 3. INVESTMENT REPRESENTATION. The Committee appointed pursuant to
Section 3 of the Plan may require Optionee to furnish the Company, prior to the
issuance of any Shares upon the exercise of all or any part of this Option, an
agreement (in such form as such Committee may specify) in which Optionee
represents that the Shares acquired by him upon exercise, if the Shares are not
registered pursuant to applicable state and/or federal securities laws, are
being acquired for investment and not with a view to the sale or distribution
thereof.
SECTION 4. OPTIONEE BOUND BY PLAN. Optionee hereby acknowledges receipt
of a copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
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SECTION 5. NOTICES. Any notice hereunder to the Company shall be
addressed to it at its administrative office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: Treasurer, and any notice hereunder
to Optionee shall be addressed to same at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇; subject to the right of either party to hereafter designate in
writing some other address.
SECTION 6. GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with Georgia law, to the extent such construction and
interpretation does not adversely affect the treatment of any option intended to
qualify as an Option under the Code.
SECTION 7. COUNTERPARTS. This Agreement has been executed in two
counterparts, each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, The System Works, Inc. has caused this Agreement to be
executed by its President or a Vice President and Optionee has executed this
Agreement as of the date first above written.
[CORPORATE SEAL] THE SYSTEM WORKS, INC.
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- ------------------------------------
Title: Secretary Title: President
/s/ ▇▇▇▇ ▇. Blend, III
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▇▇▇▇ ▇. Blend, III, Optionee
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SCHEDULE A
RECORD OF PARTIAL EXERCISE
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Number of Balance of
Date of Shares Shares Authorized Notation
Exercise Purchased on Option Signature Date
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STOCK OPTION EXERCISE FORM
__________________________
Date
Attention: Treasurer of The System Works, Inc.
Dear Sir:
The undersigned elects to exercise that certain Option to purchase
__________________ Shares, $.01 par value, of The System Works, Inc. under and
pursuant to a grant of an option on __________________________, under The System
Works, Inc. Stock Option Plan (the "Plan").
In consideration of the total price of $_____________________ for the
shares purchased hereby, the undersigned herewith delivers (1) a certified check
of the Optionee, or bank cashier's or teller's check, in the amount of
$__________________ in payment of the total purchase price, or (ii)
___________________ shares of the $.01 par value common stock of The System
Works, Inc. which have been owned by the undersigned for at least six (6) months
and have a fair market value (as established by the Plan) on the date hereof of
$_________________ per share, or (iii) a Promissory Note in the amount of
$_______________________, or (iv) a combination of (i), (ii) or (iii) equal to
the total purchase price.
The full legal name, current address and social security number of the
undersigned are as follows:
Name: ___________________________________________________________
Address: ________________________________________________________
Social Security Number: _________________________________________
The undersigned acknowledges that the shares being purchased hereby are not
registered under the Securities Act of 1933, as amended (the "Act") or under any
applicable state securities law. The undersigned represents and warrants to the
Company, and to each of its directors, officers, and control persons as follows:
that all of the Shares being purchased hereunder are being acquired for
investment purposes only and not with a view to the further sale or distribution
thereof; that such shares may not be sold, transferred, pledged, hypothecated,
alienated or otherwise assigned or disposed of by the undersigned or the heirs
and successors of the undersigned without either (i) registration under the Act
and any applicable state securities law, (ii) qualification under an exemption
promulgated pursuant to the Act and/or law, or (iii) an
opinion of counsel, which opinion is satisfactory to The System Works, Inc., and
its counsel, to the effect that such registration or qualification is not
required.
Very truly yours,
___________________________________
▇▇▇▇ ▇. Blend, III
Optionee
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EXHIBIT "A"
PROMISSORY NOTE
$____________________ Atlanta, Georgia
Date:___________
FOR VALUE RECEIVED, the undersigned _____________________________, a
resident __________________________________ (hereinafter the "Obligor"),
promises to pay to the order of THE SYSTEM WORKS, INC., a Georgia corporation
(hereinafter, together with any subsequent holder or transferee hereof, the
"Holder"), at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at such other address as the Holder shall specify, the principal sum of
_______________________________ ($______________), together with simple interest
on the unpaid balance of such principal amount outstanding from time to time at
the rate of ____________ percent (______) per annum.
This Promissory Note (hereinafter the "Note"), and all interest thereon,
shall be payable one year from the date hereof.
Any payment of principal not paid to the Holder when due as set forth above
shall bear interest at the rate of fifteen percent (15%) per annum until paid.
The Obligor shall be entitled, at any time and from time to time, without
the consent of the Holder and without paying any penalty or premium therefor, to
prepay all or any portion or portions of the outstanding principal amount hereof
and any interest accrued thereon.
The indebtedness payable under this Note is secured by a pledge of the
common stock of The System Works, Inc. being purchased hereby and other personal
collateral of the Obligor as
follows:________________________________________________________________________
___________________________________________________________________________.
Should any default be made in the payment of principal as stipulated above,
the principal indebtedness evidenced hereby, and all interest accrued thereon
shall, without notice to the Obligor, at once become due and payable and may be
collected forthwith.
Time is of the essence in this Note, and in the event this Note is
collected by law or through an attorney at law, the Obligor agrees to pay all
reasonable costs of collection, including all court costs and attorneys' fees.
This Note shall be governed by the laws and decisions of the State of Georgia.
No delay or omission on the part of the Holder in exercising any right
hereunder shall operate as a waiver of any such right or of
any other right under this Note. A waiver of any right or remedy on any one
occasion shall not be construed as a bar to or waiver of any right of remedy on
any future occasion.
IN WITNESS WHEREOF, the undersigned has caused these presents to be duly
executed under seal as of the date and year first above written.
OBLIGOR:
__________________________________(Seal)
________________________________________
(Print Name)
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SCHEDULE TO EXHIBIT 10.12.4
SCHEDULE OF TERMS OF
STOCK OPTION AGREEMENTS
GRANTED PURSUANT TO THE 1984 STOCK OPTION PLAN, AS AMENDED,
TO ▇▇▇▇ ▇. BLEND, III
DATE OF TYPE OF NUMBER OF EXERCISE EXPIRATION
AGREEMENT OPTION SHARES PRICE DATE
---------- -------------- ----------- --------- -----------
7/29/88 Non-qualified 54,237 $2.7211 12/31/98
7/29/88 Non-qualified 112,430 2.7211 12/31/98
