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EXHIBIT 10.3
NONQUALIFIED OPTION AGREEMENT
THIS NONQUALIFIED OPTION AGREEMENT (the "Agreement"), made this ____ day
of ________ 19___, between KOFAX IMAGE PRODUCTS, a California corporation
(hereinafter referred to as the "Company"), and ________, an employee of the
Company, its parent or one or more of its subsidiaries (the "Optionee"), is made
with reference to the following facts:
R E C I T A L S:
A. Optionee is employed with the Company and is a valued employee of the
Company.
B. The Company desires, by affording the Optionee an opportunity to
purchase shares of Common Stock of the Company (hereinafter called "Shares"), as
hereinafter provided, to carry out the purpose of the "Amended and Restated
Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase
Plan", a copy of which is attached hereto as Exhibit A (the "Plan").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants hereinafter set
forth, and for good and valuable consideration, the parties hereto have agreed,
and do hereby agree, as follows:
1. Grant of Option.
The Company hereby irrevocably grants to the Optionee the right and option
(hereinafter called the "Option") to purchase all or any part of an aggregate of
(________) Shares (such number being subject to adjustment as provided in
Section 7 hereof) on the terms and conditions herein set forth. The Option
granted herein is a "nonqualified option" and is not subject to the provisions
of Section 422A of the Internal Revenue Code of 1986, as amended.
2. Purchase Price.
The purchase price of the Shares covered by the Option shall be _______
($______) per share, representing one hundred percent (100%) of the fair market
value of the shares as determined pursuant to Section 6 of the Plan as of the
date hereof.
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3. Term of Option.
The term of the Option shall commence on the date hereof and all
rights to purchase shares hereunder shall cease at 11:59 p.m. on the day before
the fifth (5th) anniversary of the date hereof, subject to earlier termination
as provided herein. Except as may otherwise be provided in this Agreement,
options granted hereunder may be exercised pursuant to Section 10 cumulatively,
as follows:
(a) The Option may not be exercised as to any Shares prior to one
year following the date of this Agreement;
(b) The Option may be exercised as to twenty-five percent (25%) of
the total number of Shares subject to the option on or after one year
following the date of this Agreement;
(c) The Option may be exercised as to an additional twenty-five
percent (25%) of the total number of Shares subject to the Option on or
after two years following the date of this Agreement;
(d) The Option may be exercised as to an additional twenty-five
percent (25%) of the total number of Shares subject to the Option on or
after three years following the date of this Agreement; and
(e) The Option may be exercised as to an additional twenty-five
percent (25%) of the total number of Shares subject to the Option on or
after four years following the date of this Agreement, such that on or
after four years following the date of this Agreement all of the Shares
subject to the Option may be exercised.
For the purpose of this Agreement, the Optionee shall be deemed to
be a "Service Provider" to the Company for so long as the Optionee is employed
by the Company, or a parent or subsidiary of the Company, or a corporation or a
parent or subsidiary of a corporation issuing or assuming an option to which
Section 425(a) of the Internal Revenue Code of 1986, as amended, applies. A
leave of absence (regardless of the reason therefor) shall be deemed to
constitute the cessation of Service Provider status as of the commencement date
of the leave, unless such leave is authorized by the Company in writing and the
Optionee recommences providing services prior to the expiration date of such
leave. Accordingly, the Optionee shall receive credit as a Service Provider to
the Company during a leave of absence only if the leave is authorized by the
Company and the Optionee recommences providing services on or prior to the
expiration date of the
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leave. All Shares as to which the Option may have been exercised shall, however,
continue to be subject to the right of first refusal of the Company and its
assignees under Section 8.
The purchase price of the Shares as to which the option shall be
exercised shall be paid in full at the time of exercise (i) in cash or by
certified check or by bank draft; (ii) subject to any legal restrictions on the
acquisition or purchase of such shares by the Company and with the prior written
consent and approval of the Company, by the delivery of shares of Common Stock
of the Company which shall be deemed to have a value to the Company equal to the
aggregate fair market value of such shares determined in accordance with Section
6 of the Plan; (iii) with the prior written consent and approval of the Company,
by the execution and delivery of Optionee's promissory note in the principal
amount of the exercise price, with such term, interest rate and other terms and
provisions, including, without limitation, requiring the shares acquired upon
exercise to be pledged to the Company to secure payment of the note, as the
Board of Directors of the Company may specify, (iv) by cancellation of
indebtedness of the Company to Optionee, (v) by waiver of compensation due or
accrued to Optionee for services rendered, (vi) provided that a public market
for the Company's stock exists, through a "same day sale" commitment from the
Optionee and a broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD" Dealer) whereby the Optionee irrevocably elects to
exercise his Option and to sell a portion of the Shares so purchased to pay for
the exercise price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the exercise price directly to the Company, (vii)
provided that a public market for the Company's stock exists, through a "margin"
commitment from the Optionee and a NASD Dealer whereby the Optionee irrevocably
elects to exercise this option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the exercise price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly to the
Company, or (viii) any combination of (i), (ii), (iii), (iv), (v), (vi), or
(vii) above. Except as provided in Section 5 hereof, the Option may not be
exercised at any time unless the Optionee shall have been continuously, from
the date hereof to the date of the exercise of the Option, a Service Provider to
the Company. The holder of the Option shall not have any of the rights of a
shareholder with respect to the Shares covered by the Option as to any Shares of
Common Stock not actually issued and delivered to Optionee.
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4. Nontransferability.
The Option shall not be transferable otherwise than by will or the
laws of descent and distribution, and the Option may be exercised, during the
lifetime of the Optionee, only by Optionee. More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as provided in Section 6 hereof), pledged or hypothecated in
any way, shall not be assignable by operation of law and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option, shall be null and void and without effect.
5. Termination of Option.
Except as provided below in this Section, this Option shall
terminate on the date Optionee ceases to be a Service Provider for the Company
(the "Termination Date"). Optionee shall be considered to be a Service Provider
to the Company for all purposes under this Section 5 if the Board of Directors
determines that Optionee is rendering substantial services as a part-time
employee, consultant, contractor or adviser to the Company or any Parent,
Subsidiary or Affiliate of the Company.
(a) Termination Generally. In the event Optionee ceases to be a
Service Provider to the Company for any reason except death or disability, this
Option, to the extent (and only to the extent) that it would have been
exercisable by Optionee on the Termination Date, may be exercised by Optionee
within three (3) months after the Termination Date, but in no event later than
the Expiration Date.
(b) Death or Disability. In the event Optionee ceases to be a
Service Provider to the Company because of the death of Optionee or the
disability of Optionee within the meaning of Section 22(e)(3) of the Code, this
Option, to the extent (and only to the extent) that it would have been
exercisable by Optionee on the Termination Date, may be exercised by Optionee
(or Optionee's legal representative) within one year after the Termination Date,
but in no event later than the Expiration Date.
6. Other Terminations or Expirations.
In addition to any other event causing an expiration or termination
of this Option, this Option shall expire and all rights to purchase Shares shall
cease (to the extent not theretofore terminated or expired as herein provided)
upon the
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effective date of the dissolution or liquidation of the Company or upon a
merger, consolidation, acquisition of property or shares, separation or
reorganization of the Company with one or more entities, corporate or otherwise,
as a result of which the Company is not the surviving entity, or if the Company
is the surviving entity and the ownership of the outstanding capital stock of
the Company following the transaction changes by 80% or more as a result of such
transaction, or of a sale of substantially all of the property or shares of the
Company to another entity, corporate or otherwise (collectively, a
"Transaction"); provided, however, that the Company may, in its discretion, and
immediately prior to any such Transaction, cause a new option to be substituted
for this Option or cause this Option to be assumed by an employer entity or a
parent or subsidiary of such entity; and such new option shall apply to all
shares issued in addition to or substitution, replacement or modification of the
shares theretofore covered by such option; provided that:
(1) the excess of the aggregate fair market value of the shares
subject to the option immediately after the substitution or assumption
over the aggregate option price of such shares shall not be more than the
excess of the aggregate fair market value of all shares subject to the
option immediately before such substitution or assumption over the
aggregate option price of such shares; and
(2) the new option or the assumption of the existing option shall
not give the Optionee additional benefits which he did not have under the
old option or prior to such assumption; and
(3) an appropriate adjustment of the original option price shall be
made among original shares subject to the option and any additional shares
or shares issued in substitution, replacement or modification thereof.
If such provision is not made in the Transaction for the substitution or
assumption of this Option, then the Company shall give written notice to the
Optionee of the proposed Transaction not less than thirty (30) days prior to the
anticipated effective date of the Transaction.
7. Adjustments.
The number and class of shares subject to this Option, and the
purchase price per share (but not the total purchase price), and the minimum
number of shares as to which this Option may be exercised at any one time, shall
all be proportionately adjusted in the event of any change or increase or
decrease in the number of issued shares of Common Stock in
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the Company, without receipt of consideration by the Company, which result from
a split-up or consolidation of shares, payment of a share dividend (in excess of
two percent (2%)), a recapitalization, combination of shares or other like
capital adjustment, so that, upon exercise of this Option, the Optionee shall
receive the number and class of shares Optionee would have received had Optionee
been the holder of the number of shares of Common Stock in the Company, for
which this Option is being exercised, on the date of such change or increase or
decrease in the number of issued shares of Common Stock in the Company. Subject
to any required action by its shareholders, if the Company shall be a surviving
entity in any reorganization, merger or consolidation, this Option shall be
proportionately adjusted so as to apply to the securities to which the holder of
the number of shares of Common Stock in the Company subject to this Option would
have been entitled. Adjustments under this Section 7 shall be made by the Board
of Directors whose determination with respect thereto shall be final and
conclusive. No fractional share shall be issued under this Option or upon any
such adjustment.
8. Right of First Refusal.
(a) Grant. In the event the Optionee shall exercise the Option or
any portion thereof, the Company, in the first instance, and all other
shareholders of the Company holding more than 100,000 shares of common stock or
any shares of any other class or series having voting power equivalent to more
than 100,000 shares of common stock of the Company (as adjusted for any change
in the capital structure of the Company) ("Purchasing Shareholders" herein) are
hereby granted the right of first refusal with respect to any proposed sale or
other transfer of the Shares so acquired (to be hereinafter called the
"Purchased Shares") by the Optionee. For purposes of this Section 8, the term
"transfer" shall include any assignment, pledge, encumbrance or other
disposition for value of the Purchased Shares, but shall not include (i) a
gratuitous transfer of the Purchased Shares made to the Optionee's spouse,
parents, siblings, or issue, or a trust for the benefit of any such persons, or
(ii) a transfer of title to the Purchased Shares pursuant to the Optionee's will
or the laws of intestate succession.
(b) Notice of Intended Disposition. In the event the Optionee
desires to accept a bona fide third-party offer to purchase any or all of the
Purchased Shares (the shares subject to such offer to be hereinafter referred to
as the "Target Shares"), the Optionee shall promptly (i) deliver to the
Secretary of the Company written notice of the offer and the basic terms and
conditions thereof, including the proposed purchase price, and (ii) provide
satisfactory proof that the
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disposition of the Target Shares to the third-party offeror would not be
in contravention of the representations made by Optionee in his Investment
Letter to the Company, a form of which is attached hereto as Exhibit B.
(c) Exercise of Right by the Company. The Company (or its assignees)
shall, for a period of fifteen (15) days following receipt of the notice of
intended disposition under Section 8(b), have the right to repurchase the lesser
of (i) all of the Target Shares, or (ii) the greatest number of the Target
Shares that the Company can legally purchase under applicable law upon
substantially the same terms and conditions specified in such notice. Such right
shall be exercisable by written notice given to the Optionee prior to the
expiration of the fifteen (15)-day exercise period.
(d) Exercise of Right by the Purchasing Shareholders. If any of the
Target Shares are not being purchased by the Company, the Company shall notify
the Purchasing Shareholders within five (5) days after the expiration of the
Company's fifteen (15)-day option exercise period. Within fifteen (15) days
after the required date of delivery of the Company's notice, if any of the
Purchasing Shareholders desire to acquire any of the Target Shares pursuant to
the terms of the notice from the Optionee, they shall each deliver to the
Company a written notice of election to purchase such Target Shares or a
specified number thereof. If such notices specify in the aggregate more Target
Shares than are subject to purchase by the Purchasing Shareholders, the Target
Shares shall be allocated as follows:
(i) Each Purchasing Shareholder electing to purchase Target Shares
shall be allocated a number of Target Shares equal to the lesser of (a)
the number of Target Shares which that shareholder has offered to
purchase, or (b) the number of Target Shares which bears the same ratio to
the number of Target Shares which are not being purchased by the Company
as the number of shares owned by that shareholder bears to the number of
shares owned by all shareholders who have elected to purchase Target
Shares.
(ii) If any Target Shares remain to be allocated after the
application of subsection (i) above, they shall be allocated to the
Purchasing Shareholders who elected to purchase more Target Shares than
were allocated to them. Each such Purchasing Shareholder shall be
allocated a number of Target Shares equal to the lesser of (a) the number
of Target Shares which that Purchasing Shareholder has elected to purchase
less the number of Target Shares already allocated to that Purchasing
Shareholder, or (b)
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the number of Target Shares which bears the same ratio to the number of
Target Shares which have not yet been allocated as the number of shares
owned by that Purchasing Shareholder bears to the total number of shares
owned by all Purchasing Shareholders who have elected to purchase more
Target Shares than were allocated to them. If, as a result of the
foregoing provisions of this subsection (ii) all of the Target Shares not
being purchased by the Company have not been allocated, the balance shall
be allocated by successively applying this subsection (ii) as many times
as is necessary to allocate all of the Target Shares.
(iii) For the purpose of subsection (i) and subsection (ii), shares
owned by any Purchasing Shareholder shall include all shares of Common
Stock and all shares of any class or series which are convertible or
exchangeable for shares of Common Stock, determined as if such convertible
or exchangeable shares had been converted or exchanged for shares of
Common Stock.
(iv) After such allocation, the Company shall deliver to the
Optionee, within ten (10) days from the expiration of the fifteen (15)-day
option period of the Purchasing Shareholders, a written notice indicating
the number of Target Shares to be purchased by the Company and each of the
Purchasing Shareholders.
(e) Procedure for Exercise. If such right is exercised with respect
to all the Target Shares specified in the notice of intended disposition, the
Company (or its assignees) and/or the Purchasing Shareholders shall, except as
provided below, effect the repurchase of the Target Shares, including payment of
the purchase price, not more than ten (10) days after the expiration of the
fifteen (15)-day option period of the Purchasing Shareholders or fifteen (15)
days after the expiration of the fifteen (15)-day option period of the Company
if the Company elects to exercise the option with respect to all of the Target
Shares; and at such time the Optionee shall deliver to the Company the
certificates representing the Target Shares to be repurchased, each certificate
to be properly endorsed for transfer. The Target Shares so purchased shall
thereupon be cancelled and cease to be issued and outstanding shares of the
Company's Common Stock. However, (i) should the purchase price specified in the
notice of intended disposition be payable in property other than cash or
evidences of indebtedness, the Company (or its assignees) and/or the Purchasing
Shareholders shall have the right to pay the purchase price in the form of cash
equal in amount to the value of such property, and (ii) if there is no purchase
price for the intended disposition, the Company (or its assignees) and/or the
Purchasing Shareholders shall have the right to purchase
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any or all of the Target Shares for a purchase price in the form of cash equal
in amount to the value of such Target Shares. If the Optionee and the Company
(or its assignees) and/or the Purchasing Shareholders cannot agree on such cash
value within ten (10) days after the Company's receipt of the notice of intended
disposition, the valuation shall be made by an appraiser of recognized standing
selected by the Optionee and the Company (or its assignees) or, if they cannot
agree on an appraiser within twenty (20) days after the Company's receipt of
such notice, each shall select an appraiser of recognized standing and the two
appraisers shall designate a third appraiser of recognized standing, whose
appraisal shall be determinative of such value. In the event that the valuation
is made by an appraiser, the fees associated with such appraisal shall be borne
by the Company. The closing shall then be held on the later of (i) the fifth
business day following the Company's (or its assignees') exercise of its
purchase rights hereunder or (ii) the fifteenth day after such cash valuation
shall have been made.
(f) Non-Exercise of Right. In the event written notice of exercise
of the Company's and/or the Purchasing Shareholder's right of first refusal is
not given to the Optionee within forty-five (45) days following the date of the
Company's receipt of the notice of intended disposition under Section 8(b), the
Optionee shall, for a period of ninety-five (95) days thereafter, have the right
to sell or otherwise dispose of the Target Shares upon terms and conditions
(including the purchase price) no more favorable to the third party purchaser
than those specified in the notice of intended disposition given to the Company;
provided, however, that any such sale or disposition must not be effected in
contravention of the representations made by the Optionee in Section 10 of this
Agreement. The third party purchaser shall acquire the Target Shares free and
clear of all the terms and provisions of this Agreement (including the Company's
first refusal rights hereunder). In the event Optionee does not sell or
otherwise dispose of the Target Shares within the specified ninety-five (95) day
period, the Company's right of first refusal shall continue to be applicable to
any subsequent disposition of the Target Shares by the Optionee until such right
lapses in accordance with Section 8(i).
(g) Judicial Transfers. All proposed judicial transfers and sales of
the Shares by order of any court or referee in bankruptcy ("Order") shall be
subject to the terms and provisions of Section 8 of this Agreement. In the event
a sale or transfer is proposed pursuant to an Order, all of the terms of this
Section 8 shall apply, with the following modification. Instead of a notice of
intent to transfer being
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delivered to the Company, a copy of the Order shall be delivered to the Company
by the proposed transferee, which shall state the name and address of the
proposed transferee and shall specify the number of the Shares to be sold and
the consideration per Share. For other purposes of this Section 8, the receipt
of the Order shall be treated as the receipt of the notice of intended
disposition as set forth in Section 8(b) above. All proposed transfers pursuant
to an Order which do not set forth the purchase price capable of valuation which
would allow the Company to exercise its rights of first refusal are expressly
prohibited. Any purported transfer in contravention of this Section 8(g) shall
be null and void and shall pass no title to the proposed transferee.
(h) Partial Exercise of Right. In the event the Company (or its
assignees) and/or the Purchasing Shareholders make a timely exercise of its
first refusal rights hereunder with respect to a portion, but not all, of the
Target Shares specified in the Optionee's notice of intended disposition, the
optionee shall have the option, exercisable by written notice to the Company
delivered within sixty (60) days after the date of the initial notice of
intended disposition, to effect the sale of the Target Shares pursuant to one of
the following alternatives:
(i) sale or other disposition of all the Target Shares to a
third-party purchaser in compliance with the requirements of Section 8(a),
as if the Company and/or the Purchasing Shareholders did not exercise
their respective first refusal rights hereunder; or
(ii) sale to the Company (or its assignees) and/or the Purchasing
Shareholders of the portion of the Target Shares which the Company (or its
assignees) and/or the Purchasing Shareholders have elected to purchase,
such sale to be effected in substantial conformity with the provisions of
Sections 8(c), (d) and (e) and, at the option of Optionee, sale of the
remaining portion of the Target Shares to a third-party purchaser in
compliance with Section 8(f).
Failure of the Optionee to deliver timely notification to the
Company under this Section 8(h) shall be deemed to be an election by the
Optionee to sell the Target Shares pursuant to alternative (i) above.
(i) Lapse. The Company's right of first refusal under this Section 8
shall lapse and cease to have effect upon the closing of an underwritten public
offering pursuant to an effective registration statement under the 1933 Act
covering
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the offer and sale of common stock for the account of the Company.
(j) Restrictive Legend. Until such time as the Company's right of first
refusal lapses and ceases to have effect pursuant to the provisions of Section
8(h), the stock certificate for the Purchased Shares shall be endorsed with the
following additional legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, PLEDGED OR ENCUMBERED, EXCEPT IN CONFORMITY WITH THE TERMS OF
A NONQUALIFIED OPTION AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER OF THE SHARES (OR HIS PREDECESSOR IN INTEREST). SUCH AGREEMENT
GRANTS CERTAIN RIGHTS OF FIRST REFUSAL TO THE COMPANY (OR ITS ASSIGNS)
UPON THE SALE, ASSIGNMENT, TRANSFER, PLEDGE OR ENCUMBRANCE OF THE SHARES.
A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY.
9. Notice.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered or
mailed, by United States certified or registered mail, prepaid, to the parties
or their assignees at the addresses set forth opposite their signatures below
(or such other address as shall be given in writing by either party to the
other).
10. Method of Exchanging Option.
Subject to the terms and conditions of this Option Agreement, this
Option may be exercised by written notice to the Company, at its principal
office in the State of California, which presently is located at 0 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000. Such notice shall state the election to
exercise the Option and the number of shares in respect of which it is being
exercised and shall be signed by the person or persons so exercising the Option.
Such notice shall be accompanied by payment as provided in Section 3 hereof. The
notice of exercise shall be accompanied with an executed investment letter in
the form of Exhibit B attached hereto as a condition to exercise. The Company
shall deliver a certificate or certificates representing the Shares subject to
such exercise as soon as practicable after the notice and investment letter
shall be received. The certificate or certificates for the shares as to which
the Option shall have been so exercised shall be registered in the name of the
person or persons so exercising the Option and shall be delivered as provided
above
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to or upon the written order of the person or persons exercising the Option. In
the event the Option shall be exercised by any person or persons other than the
Optionee in accordance with the terms hereof, such notice shall be accompanied
by appropriate proof of the right of such person or persons to exercise the
Option. All shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable. The holder of this Option
shall not be entitled to the privileges of share ownership as to any shares of
Common Stock not actually issued and delivered to Optionee. The Optionee hereby
certifies that all shares of Common Stock in the Company purchased or to be
purchased by Optionee pursuant to the exercise of this Option are being or are
to be acquired by Optionee for investment and not with a view to the
distribution thereof.
11. No Agreement to Employ.
Nothing in this Agreement shall be construed to constitute or be
evidence of any agreement or understanding, express or implied, on the part of
the Company to employ or retain Optionee for any specific period of time.
12. Market Standoff Agreement.
Optionee agrees in connection with any registration of the Company's
securities that, upon the request of the Company or the underwriters managing
any public offering of the Company's securities, Optionee will not sell or
otherwise dispose of any Shares without the prior written consent of the Company
or such underwriters, as the case may be, for a period of time (not to exceed 90
days) from the effective date of such registration as the Company or the
underwriters may specify.
13. Stop-Transfer Notices.
Optionee understands and agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
"stop-transfer" instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations to the
same effect in its own records.
14. Reports to Optionee.
Until the expiration of the right to exercise this option as
provided in Section 3 above, the Company will furnish to the Optionee copies of
all annual and other periodic financial and informational reports that the
Company distributes generally to its shareholders.
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15. General.
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of Common Stock as will be sufficient
to satisfy the requirements of this Option Agreement, shall pay all original
issue and transfer taxes with respect to the issue and transfer of shares
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith, and will from time to time use its best efforts
to comply with all laws and regulations, which, in the opinion of counsel for
the Company, shall be applicable thereto.
16. Counterparts.
This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one agreement and any party hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
binding upon Optionee and the Company at such time as the Agreement, in
counterpart or otherwise, is executed by Optionee and the Company.
17. Applicable Law.
This Agreement shall be construed under, and enforced in accordance
with and governed by the laws of the State of California.
IN WITNESS WHEREOF, the Company has caused this Nonqualified Option
Agreement to be duly executed by its officers thereunto duly authorized, and the
Optionee has hereunto set his hand, all as of the day and year first above
written.
COMPANY:
KOFAX IMAGE PRODUCTS
Address:
0 Xxxxxx Xxxxxx
Xxxxxx, XX 00000 By
---------------------------------------
OPTIONEE:
Address:
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EXHIBIT A
The Plan
15
EXHIBIT B
Kofax Image Products
0 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Gentlemen:
1. (a) In connection with the acquisition of _________ shares of the common
stock of Kofax Image Products, a California corporation (the "Company"), by the
undersigned, the undersigned represents that the shares which the undersigned is
acquiring are being acquired for investment and not with a view to the sale or
distribution of any part thereof, and that the undersigned has no present intent
of selling or otherwise distributing the same.
You have advised the undersigned that the shares have not
been registered under the Securities Act of 1933, as the offering of the shares
is to be effected pursuant to an exemption from the registration provisions of
such Act, and, in this connection, you are relying in part on the
representations of the undersigned set forth herein.
Without in any way limiting the representations set forth
above, the undersigned further agrees in no event to make any disposition of all
or any part of said shares unless and until (i) the undersigned shall have
notified you of the proposed disposition; (ii) the undersigned shall have
furnished you with an opinion of counsel to the effect that such disposition
will not require registration of such shares under the Act, and (iii) such
opinion of counsel shall have been concurred in by the Company's counsel and the
Company shall have advised you of such concurrence.
(b) The undersigned acknowledges receipt of all such information as
the undersigned deems necessary and appropriate to enable the undersigned to
evaluate the financial risk inherent in acquiring said shares and acknowledges
receipt of satisfactory and complete information covering the business and
financial condition of the Company, including the opportunity to obtain
information regarding the Company's financial status, in response to all
inquiries in respect thereof.
2. The undersigned understands and agrees that the certificate evidencing
said shares will bear the following legends:
16
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED BY THE HOLDER
FOR INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT
OF 1933, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
The undersigned acknowledges receipt of a copy of Rule 260.141.11 of Title 10 of
the California Administrative Code, which is attached hereto as Exhibit A. The
undersigned represents and warrants that he will give a copy of such Rule to any
transferee or successor of the undersigned. Such Rule and the conditions of its
application restrict the transfer and assignment of the shares and certificates
evidencing such shares.
3. (a) The undersigned recognizes that said shares are unregistered and
must be held indefinitely unless they are subsequently registered under the Act
or an exemption from such registration is available, and further recognizes that
you are under no obligation to register said shares or to comply with any
exemption from such registration.
(b) The undersigned understands that Rule 144 under the Act does
not presently apply and may never apply to the Company's securities because the
Company does not now, and may never, file reports required by the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and has not made, and may
never make, publicly available the information required by Rule 15c2-11 of the
Exchange Act. Furthermore, if Rule 144 were available, the undersigned
understands that sales of securities made in reliance thereof could be made only
in certain limited amounts, after certain holding periods and only when there
was available specified current public information, all in accordance with the
terms and conditions of said Rule. The undersigned understands that, in the case
of securities to which said rule is not applicable, compliance with some other
exemption under the Act will be required.
Dated:
------------------------
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17
Exhibit A
CALIFORNIA ADMINISTRATIVE CODE
Title 10, Section 260.141.11
Restriction on Transfer.
(a) The issuer of any security upon which a restriction on transfer
has been imposed pursuant to Section 260.102.6, 260.141.10 or 260.534 shall
cause a copy of this section to be delivered to each issuee or transferee of
such security at the time the certificate evidencing the security is delivered
to the issuee or transferee.
(b) It is unlawful for the holder of any such security to consummate a
sale or transfer of such security, or any interest therein, without the prior
written consent of the Commissioner (until this condition is removed pursuant
to Section 260.141.12 of these rules), except:
(1) to the issuer;
(2) pursuant to the order or process of any court;
(3) to any person described in Subdivision (i) of Section 25102 of the
Code or Section 260.105.14 of these rules;
(4) to the transferor's ancestors, descendants or spouse, or any
custodian or trustee for the account of the transferor or the transferor's
ancestors, descendants, or spouse; or to a transferee by a trustee or
custodian for the account of the transferee or the transferee's ancestors,
descendants or spouse;
(5) to holders of securities of the same class of the same issuer;
(6) by way of gift or donation inter vivos or on death;
(7) by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state, territory or
country who is neither domiciled in this state to the knowledge of the
broker-dealer, nor actually present in this state if the sale of such
securities is not in violation of any securities law of the foreign state,
territory or country concerned;
(8) to a broker-dealer licensed under the Code in a principal
transaction, or as an underwriter or member of an underwriting syndicate or
selling group;
(9) if the interest sold or transferred is a pledge or other lien
given by the purchaser to the seller upon a sale of the security for which the
Commissioner's written consent is obtained or under this rule not required;
(10) by way of a sale qualified under Sections 25111, 25112, 25113, or
25121 of the Code, of the securities to be transferred, provided that no order
under Section 25140 or subdivision (a) of Section 25143 is in effect with
respect to such qualification;
(11) by a corporation to a wholly owned subsidiary of such corporation,
or by a wholly owned subsidiary of a corporation to such corporation;
(12) by way of an exchange qualified under Section 25111, 25112 or
25113 of the Code, provided that no order under Section 25140 or subdivision
(a) of Section 25143 is in effect with respect to such qualification;
(13) between residents of foreign states, territories or countries who
are neither domiciled nor actually present in this state;
(14) to the State Controller pursuant to the Unclaimed Property Law or
to the administrator of the unclaimed property law of another state; or
(15) by the State Controller pursuant to the Unclaimed Property Law or
by the administrator of the unclaimed property law of another state if, in
either such case, such person (i) discloses to potential purchasers at the sale
that transfer of the securities is restricted under this rule, (ii) delivers
to each purchaser a copy of this rule, and (iii) advises the Commissioner of
the name of each purchaser;
(16) by a trustee to a successor trustee when such transfer does not
involve a change in the beneficial ownership of the securities;
(17) by way of an offer and sale of outstanding securities in an
issuer transaction that is subject to the qualification requirement of Section
25110 of the Code but exempt from that qualification requirement by subdivision
(f) of Section 25102;
provided that any such transfer is on the condition that any
certificate evidencing the security issued to such transferee shall contain the
legend required by this section.
(c) The certificates representing all such securities subject to such
a restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as follows:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
