EXHIBIT 10.34
NON-QUALIFIED STOCK OPTION AGREEMENT
Xxxxxx Xxxxxx
GTSI CORP.
Nonqualified Stock Option Agreement
GTSI Corp., a Delaware corporation (the "Company"), hereby grants to Xxxxxx
Xxxxxx (the "Optionee") an option (the "Option") to purchase a total of 125,000
shares of Common Stock, $0.005 par value (the "Shares"), of the Company, at the
price and on the terms set forth herein.
1. Nature of the Option. This Option is intended to be a nonqualified stock
option and is not intended to be an incentive stock option within the meaning of
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), or
to otherwise qualify for any special tax benefits to the Optionee.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the Common Stock, $0.005 par value, of the
Company.
(c) "Continuous Employment" or "Continuous Status As An Employee" shall mean
the absence of any interruption or termination of employment or service as an
Employee by the Company or any Parent or Subsidiary of the Company which now
exists or is hereafter organized or acquired by or acquires the Company.
Continuous Employment shall not be considered interrupted in the case of
transfers between locations of the Company or between the Company, its Parent,
or any of its Subsidiaries or its successors.
(d) "Employee" shall mean any person, including officers and directors,
employed by the Company, its Parent, any of its Subsidiaries or its successors.
The payment of directors' fees by the Company shall not be sufficient to
constitute employment by the Company.
(e) "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Sections 425(e) and (g) of the Code.
(f) "Subsidiary" shall mean a subsidiary corporation, whether now or hereafter
existing, as defined in Sections 425(f) and (g) of the Code.
3. Date of Grant; Term of Option. This Option is granted as of January 28,
2003 (the "Grant Date"), and it may not be exercised later than the earlier of
(i) seven years from the Grant Date or (ii) three months after the Optionee has
ceased to be an Employee of the Company.
4. Option Exercise Price. The Option exercise price is $11.30 per Share.
5. Exercise of Option. This Option shall be exercisable during its term only
as follows:
(a) Right to Exercise. This Option shall vest and be exercisable cumulatively
in five equal installments, the first installment vesting on the Grant Date and
the remaining installments occurring upon each subsequent anniversary of the
Grant Date; provided, however, that the entire Option shall vest and be
exercisable immediately as to all outstanding shares if your duties or
responsibilities are materially
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modified without your consent, or in the case of a "change in control," and if
your employment ceases for any reason other than for "cause."
"Change in control" is defined as (i) control of 50% or more of outstanding
shares of GTSI; (ii) a change in a majority of the Company Board of Directors if
the change occurred during any 12 consecutive months, and the new directors were
not elected by the Company's stockholders or by a majority of the directors who
were in office at the beginning of the 12 months; or (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation.
"Cause" is defined as termination by GTSI of an officer's employment as a
result of: (i) acts or omissions involving unacceptable performance or conduct
(examples of which include, but are not limited to: failure or refusal to
perform assigned duties or to follow Company policies, as determined in the sole
discretion of the Company; commission of sexual harassment; excessive
absenteeism; unlawful use or possession of drugs or misuse of legal drugs or
alcohol; misappropriation of a Company asset or opportunity; the offer, payment,
solicitation or acceptance of any bribe or kickback with respect to the
Company's business; the assertion, representation or certification of any false
claim or statement to a Company customer; or indictment or conviction for any
felony whatsoever or for any misdemeanor involving moral turpitude); (ii)
inability for any reason to perform the essential functions of the position; or
(iii) other conduct deemed by the Company to be inappropriate for an officer or
harmful to the Company's interests or reputation.
(b) Method of Exercise. This Option shall be exercisable from time to time as
to all or any portion of the Shares as to which this Option is then exercisable
by written notice in the form attached hereto (the "Notice"). The Notice shall
be signed by the Optionee and shall be delivered in person or by certified mail
to the Secretary of the Company or such other person as may be designated by the
Company. The Notice shall be accompanied by payment of the aggregate Option
exercise price. Such payment of the aggregate Option exercise price shall be by
cash, check or such other consideration and method of payment as may be approved
by the Board or authorized by this Option. The certificate or certificates for
the Shares as to which this Option shall be exercised shall be registered in the
name of the Optionee and shall bear any legend required under Section 14 hereof
and/or applicable Blue Sky or other laws.
(c) Restrictions on Exercise. This Option may not be exercised if the issuance
of the Shares upon such exercise would constitute a violation of any applicable
federal or state securities laws or other laws or regulations. The Company shall
not be obligated to take any affirmative action in order to cause the exercise
of this Option or the issuance of shares pursuant thereto to comply with such
laws or regulations. As a condition to the exercise of this Option, the Company
may require the Optionee to make any representation and warranty to the Company
as may be required by any applicable law or regulation. This Option may not be
exercised for a fraction of a Share.
(d) Effect of Exercise. Exercise of this Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available for sale
under this Option by the number of Shares as to which this Option is exercised.
6. No Rights as Stockholder. Until this Option is properly exercised in whole
or in part in accordance with the terms of Section 5 hereof, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock. No adjustment shall be made for a dividend or other right
for which the record date is prior to the date this Option is exercised, except
as provided in Section 10 hereof.
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7. Delivery of Share Certificates. As soon as practicable after any proper
exercise of this Option, the Company shall, without transfer or issue tax to the
Optionee, deliver to the Optionee at the principal executive office of the
Company or such other place as shall be mutually agreed upon between the Company
and the Optionee, a certificate or certificates representing the Shares for
which this Option shall have been exercised. The time of issuance and delivery
of the certificate(s) representing the Shares for which this Option shall have
been exercised may be postponed by the Company for such period as may be
required by the Company, with reasonable diligence, to comply with any
applicable listing requirements of any national or regional securities exchange
or any law or regulation applicable to the issuance or delivery of such Shares.
8. Termination of Status as an Employee. If the Optionee ceases to serve as an
Employee for any reason other than death or permanent and total disability
(within the meaning of Section 22(e)(3) of the Code) and thereby terminates his
Continuous Status as an Employee, the Optionee shall have the right to exercise
this Option at any time within three months after the date of such termination
to the extent that the Optionee was entitled to exercise this Option at the date
of such termination. If the Optionee ceases to serve as an Employee due to death
or permanent and total disability (within the meaning of Section 22(e)(3) of the
Code), this Option may be exercised at any time within six months after the date
of death or termination of employment due to disability, in the case of death,
by the Optionee's estate or by a person who acquired the right to exercise this
Option by bequest or inheritance, or, in the case of disability, by the
Optionee, but in any case only to the extent the Optionee was entitled to
exercise this Option at the date of such termination. To the extent that the
Optionee was not entitled to exercise this Option at the date of termination, or
to the extent this Option is not exercised within the time specified herein,
this Option shall terminate. Notwithstanding the foregoing, this Option shall
not be exercisable after the expiration of the term set forth in Section 3
hereof.
9. Nontransferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. Subject to the foregoing, the terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
10. Reservation of Shares. The Company covenants and agrees that during the
term of this Option the Company will at all times have authorized and reserved
for the purpose of the issue upon exercise of this Option at least the maximum
number of shares of Common Stock as are issuable upon the exercise of this
Option.
11. Continuation of Employment. This Option shall not confer upon the Optionee
any right to continue in the employment of the Company or any of its
Subsidiaries or limit in any respect the right of the Company to discharge the
Optionee at any time, with or without cause and with or without notice.
12. Withholding. The Company reserves the right to withhold, in accordance with
any applicable laws, from any consideration payable to Optionee any taxes
required to be withheld by federal, state or local law as a result of the grant
or exercise of this Option or the sale or other disposition of the Shares issued
upon exercise of this Option. If the amount of any consideration payable to the
Optionee is insufficient to pay such taxes or if no consideration is payable to
the Optionee, upon the request of the Company, the Optionee shall pay to the
Company an amount sufficient for the Company to satisfy any federal, state or
local tax withholding requirements it may incur, as a result of the grant or
exercise of this Option or the sale or other disposition of the Shares issued
upon the exercise of this Option.
13. Legends. Each certificate representing the Shares shall contain such
legends as may be required under applicable blue sky laws. Unless an appropriate
registration statement is filed and becomes effective pursuant to the Securities
Act of 1933, as amended, with respect to the Shares, each certificate
representing such Shares shall also have endorsed thereon a legend substantially
as follows:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
14. Action by the Company. The existence of this Option shall not affect in any
way the right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding.
15. Interpretation. As a condition to the granting of this Option, the Optionee
and each person who succeeds to the Optionee's rights hereunder, agrees that any
dispute or disagreement which shall arise under or as a result of or pursuant to
this Option shall be determined by the Board in its sole discretion, and that
any such determination or interpretation of the terms of this Option by the
Board shall be final, binding and conclusive.
16. Notices. Any notice to be given to the Company pursuant to this Option
shall be addressed to the Company in care of its Secretary (or such other person
as the Company may designate from time to time) as its principal office, and any
notice to be given to the Optionee shall be delivered personally or addressed to
him at the address given beneath his signature set forth below, or at such other
address as the Optionee may hereafter designate in writing to the Company. Any
such notice shall be deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as aforesaid, registered or certified, and
deposited, postage and registry or certification fee prepaid, in a post office
or branch post office regularly maintained by the United States Postal Service.
17. Invalid Provisions. In the event that any provision of this Option is found
to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision was not contained herein.
18. Governing Law. This Option shall be governed by and construed in accordance
with the laws of the State of Delaware.
IN WITNESS WHEREOF, this Option Agreement has been duly executed on behalf
of the Company by an authorized representative of the Company and by the
Optionee and is dated as of the Grant Date.
GTSI Corp. Optionee: Xxxxxx Xxxxxx
By: Signature:
--------------------------------- --------------------------
Name: X. Xxxxx Young Address:
------------------------------ ----------------------------
Title: Chairman & CEO
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GTSI Corp.
NOTICE OF EXERCISE OF STOCK OPTION
(Please print legibly or type)
I, Xxxxxx Xxxxxx, ("Optionee"), hereby agree, represent and warrant to GTSI
Corp. (the "Company") as follows:
1. On January 28, 2003, I was granted a Nonqualified Stock Option (the
"Option") pursuant to which I was granted the right to purchase 125,000 shares
of the Company's Common Stock, subject to adjustment in accordance with the
Nonqualified Stock Option Agreement evidencing said Option (the "Optioned
Shares").
2. I am eligible to exercise the Option to the extent that I am
exercising the Option.
3. I hereby elect to exercise the Option to purchase __________ of such
Optioned Shares (the "Shares") under the Nonqualified Stock Option Agreement
evidencing said Option at $11.30 per Share, for an aggregate purchase price of
$__________.
4. This Notice of Exercise of Stock Option is accompanied by payment in
full for the Shares and withholding tax in the form of cash, a check or any
combination thereof.
5. In connection with my exercise of the Option, I have received a copy
of the Nonqualified Stock Option Agreement relating to the Company's Common
Stock issuable under the Option.
Dated:____________________________ _________________________________________
Signature of Optionee
__________________________________ _________________________________________
Social Security Number Address
___________________________________________________
City, State, Zip
================================================================================
Received on behalf of GTSI Corp. on _________________________.
Signature: __________________________________
Print Name: _________________________________
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