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EXHIBIT 10.51
July 29, 1997
To: Xxxx X. Xxxxxxxxx
RE: NON-QUALIFIED STOCK OPTIONS
The Board of Directors (the "Board") of Lason, Inc., or the committee
(the "Committee") designated by the Board for the purpose of administering the
Lason, Inc. 1995 Stock Option Plan (the "Plan"), hereby grants you (the
"Grantee") a non-qualified stock option (each an "Option"), pursuant to the
Plan, a copy of which is attached hereto. Certain capitalized terms used in this
agreement (the "Agreement") are defined in paragraph 12 hereof. Certain
capitalized terms used in this Agreement which are not defined herein have the
meanings indicated for such terms in Section 10.1 of the Plan. As used herein
references to the "Company" refer to Lason, Inc. or to Lason, Inc. and/or any of
its Subsidiaries, as applicable.
1. STOCK OPTION. The Option entitles the Grantee (and such
Xxxxxxx's permitted transferee as described in paragraph 3(a) below) (each such
person, a "Purchaser") to purchase up to the number of shares of the Company's
Common Stock, par value $.01 per share (the "Option Shares"), specified below
opposite such Grantee's name, at an option price of $27.1875 per share (the
"Option Price"), subject to the terms and conditions of this Agreement:
GRANTEE NUMBER OF OPTION SHARES
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Xxxx X. Xxxxxxxxx 15,000
2. ADDITIONAL TERMS. The Options are also subject to the
following provisions:
(a) EXERCISABILITY. Each Option may be exercised and Option
Shares may be purchased at any time and from time to time after the execution of
this Agreement, subject to the vesting limitations imposed by paragraph 2(b) of
this Agreement. The Option Price for Option Shares shall be paid in full in cash
or by check by the Purchaser of such Option Shares prior to the time of the
delivery of Option Shares, or, at the written request of such Purchaser, the
Committee may (but need not) permit payment to be made by (i) delivery to the
Company of outstanding Shares, (ii) retention by the Company of one or more of
such Option Shares or (iii) any combination of cash, check, such Purchaser's
delivery of outstanding Shares and retention by the Company of one or more of
such Option Shares. Option Shares acquired by Purchaser under this Agreement are
hereinafter referred to as the "Exercise Shares."
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(b) VESTING/EXERCISABILITY.
(i) Purchaser may only exercise the Option to purchase
Option Shares to the extent that such Option has vested and become exercisable
with respect to such Option Shares. Except as otherwise provided in Paragraph
2(b)(ii) below, the Option Shares will vest and become exercisable in accordance
with the following schedule, if as of each such date the Grantee is still
employed by the Company or any of its Subsidiaries:
CUMULATIVE PERCENTAGE
OF OPTION SHARES VESTED
DATE AND EXERCISABLE
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July 29, 1998 20%
July 29, 1999 40%
July 29, 2000 60%
July 29, 2001 80%
July 29, 2002 100%
Option Shares which have become vested and exercisable are referred to herein as
"Vested Shares" and all other Option Shares are referred to herein as "Unvested
Shares."
(ii) Upon the occurrence of a Sale of the Company, each
Option shall vest and all Unvested Shares shall be come Vested Shares if, but
only if, the Grantee thereof is employed by the Company or any of its
Subsidiaries on the date of such occurrence.
(c) PROCEDURE FOR EXERCISE. Subject to the vesting
limitations of Paragraph 2(b) above, a Purchaser may exercise all or any portion
of the Option, so long as it is valid and outstanding, at any time and from time
to time prior to its termination by delivering written notice to the Company as
provided in Section 6.4 of the Plan and written acknowledgment substantially in
the form of Exhibit A hereto that such Purchaser has read, and has been afforded
an opportunity to ask questions of the Company's management regarding all
financial and other information provided to Purchaser concerning the Company,
together with payment of the Option Price times the number of Option Shares
purchased. Subject to Section 6.7 of the Plan, at the time of exercise,
Purchaser will be entitled to review all financial and other information
regarding the Company it believes necessary to enable such Purchaser to make an
informed investment decision.
3. TRANSFERABILITY OF THE OPTIONS.
(a) The Grantee shall not sell, transfer, assign, pledge or
otherwise dispose of (a "Transfer") any interest in any Option with respect to
any Unvested Shares. Any Option with respect to any Vested Shares of the Grantee
shall not be Transferred other than as a result of the death of such Grantee,
testate or intestate, and the restrictions herein shall apply to any Transfer by
any such permitted transferee.
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(b) The Company may assign its rights and delegate its
duties under this Agreement.
4. TRANSFERABILITY OF EXERCISE SHARES.
(a) No Purchaser shall Transfer any Exercise Shares or any
interest therein except in accordance with the provisions of this Agreement.
(b) No holder of any Exercise Shares may Transfer any such
shares (except pursuant to an effective registration statement and/or re-offer
prospectus, as applicable, under the Securities Act) without first delivering to
the Company an opinion of counsel (reasonably acceptable in form and substance
to the Company) that neither registration nor qualification under the Securities
Act and applicable state securities laws is required in connection with such
transfer. Notwithstanding the above, no Exercise Shares may be Transferred
within six (6) months from the date of grant of the Option.
5. CONFORMITY WITH PLAN. The Options are intended to conform
in all respects with, and are subject to all applicable provisions of, the Plan,
which is incorporated herein by reference. Inconsistencies between this
Agreement and the Plan shall be resolved in accordance with the terms of the
Plan, except as modified by Paragraph 2(b)(ii) of this Agreement. By executing
this Agreement, the Grantee acknowledges receipt of the Plan and agrees to be
bound by all of other terms of the Plan.
6. EMPLOYMENT. Notwithstanding any contrary oral
representations or promises made to the Grantee prior to or after the date
hereof, except as set forth in that certain Employment Agreement of even date
herewith between the Company and Grantee (the "Employment Agreement"), the
Grantee and the Company acknowledge that such Xxxxxxx's employment with the
Company is and will continue to be subject to the willingness of each to
continue such employment and nothing set forth herein or otherwise confers any
right or obligation on such Grantee to continue in the employ of the Company or
shall affect in any way such Xxxxxxx's right or the right of the Company to
terminate such Xxxxxxx's employment at any time, for any reason, with or without
cause.
7. ADJUSTMENT. The Board shall make appropriate and
proportionate adjustments to the terms of the Options to reflect any stock
dividend, stock split, combination or exchange of shares, merger, consolidation
or other change in the capitalization of the Company which the Board determines
to be similar, in its substantive effect upon the Plan or the Options, to any of
the changes expressly indicated in this sentence, as provided in Article 8 of
the Plan. The Board may (but shall not be required to) make any appropriate
adjustment to the terms of the Options to reflect any spin-off, spin-out or
other distribution of assets to shareholders or any acquisition of the Company's
stock or assets or other change which the Board determines to be similar, in its
substantive effect upon the Plan or the Options, to any of the changes expressly
indicated in this sentence, as provided in Article 8 of the Plan. In the event
of any adjustments described in the preceding two sentences, any and all new,
substituted,
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or additional securities or other property to which any Purchaser is entitled by
reason of the Option shall be immediately subject to such Option and be included
in the word "Option Shares" for all purposes of such Option with the same force
and effect as the Option Shares presently subject to such Option. After each
such event, the number of Option Shares and/or the Option Price shall be
appropriately adjusted.
8. SHARE LEGEND. Unless the Exercise Shares are the subject of
an effective registration statement and/or re-offer prospectus, as applicable,
all certificates representing any Exercise Shares subject to the provisions of
this Agreement shall have endorsed thereon the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED AS OF JULY 29, 1997, HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET
FORTH IN AN EMPLOYEE STOCK OPTION AGREEMENT BETWEEN THE
COMPANY AND CERTAIN EMPLOYEES OF THE COMPANY DATED JULY 29,
1997. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER
HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT
CHARGE."
9. INVESTMENT REPRESENTATIONS. Upon the purchase of Option
Shares hereunder, the Purchaser thereof shall execute and deliver to the Company
a letter, substantially in the form attached hereto as Exhibit A, confirming
such Purchaser's investment representations.
10. EXPIRATION. Subject to Sections 6.3 and 6.7 of the Plan,
the Grantee's Option shall expire (a) with respect to Vested Shares, at the
earlier of (i) Termination for Cause of such Xxxxxxx's employment with the
Company or (ii) at 5:00 p.m., Detroit time, on the seventh anniversary of the
date hereof and (b) with respect to Unvested Shares, upon the termination of
such Xxxxxxx's employment with the Company.
Further, notwithstanding the above, with respect to Vested
Shares, if the termination of Xxxxxxx's employment with the Company is due to
death, disability, Termination Without Cause or Grantee quitting employment for
Good Reason, then the Option shall expire on the earlier of (i) the 90th day
following the termination of Grantee's employment or (ii) until 5:00 p.m.,
Detroit time, on the seventh anniversary of the date hereof.
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Further, notwithstanding the above, with respect to Vested
Shares, if the Company discovers after termination of Xxxxxxx's employment, that
Xxxxxxx engaged in conduct that would have justified Termination for Cause,
Xxxxxxx's Option shall expire immediately on the date of such discovery.
11. CONFIDENTIALITY/NON-COMPETITION. In consideration of the
Option granted herein, Xxxxxxx acknowledges and agrees to be fully bound by the
"Non-Competition/Confidentiality" covenants included in Paragraph 5 of that the
Employment Agreement, which is incorporated herein by reference. If Grantee
violates the Non- Competition/Confidentiality provisions incorporated into this
Paragraph 11, the Company, in addition to any other rights and remedies shall
not be obligated to sell any shares subject to the Option upon exercise of the
Option.
The provisions of this Paragraph 11 shall survive the
termination of this Agreement and Xxxxxxx's employment with the Company.
12. DEFINITIONS.
"DISABILITY" means permanent and total disability as such term
is defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
"FULLY DILUTED BASIS" means, without duplication, (i) all
shares of Common Stock outstanding at the time of determination plus (ii) all
shares of Common Stock issuable upon conversion of any convertible securities or
the exercise of any option, warrant or similar right, whether or not such
conversion, right or option, warrant or similar right is then exercisable.
"GOOD REASON" shall have the meaning ascribed to such term in
the Employment Agreement.
"INDEPENDENT THIRD PARTY" means any person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a Fully Diluted Basis (a "5% Owner"), who is not
controlling, controlled by or under common control with the Company or any such
5% Owner and who is not the spouse or descendent (by birth or adoption) of any
such 5% Owner or a trust for the benefit of such 5% Owner and/or such other
persons.
"SALE OF THE COMPANY" means the sale of the Company (by
merger, consolidation or sale of stock or assets) to an Independent Third Party
or group of Independent Third Parties pursuant to which such party or parties
acquire (i) capital stock of the Company possessing the voting power under
normal circumstances to elect a majority of the Board (whether by merger,
consolidation or sale or transfer of the Company's capital stock) or (ii) all or
substantially all of the Company's assets determined on a consolidated basis.
The Sale of the Company does not include a sale of stock pursuant to a secondary
public offering by the Company.
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"TERMINATION FOR CAUSE" shall have the meaning ascribed to
such term in the Employment Agreement.
"TERMINATION WITHOUT CAUSE" means any termination by the
Company of Grantee's employment which is not a Termination for Cause, including,
but not limited to, a voluntary quit by Grantee other than for Good Reason.
13. FURTHER ACTIONS. The parties agree to execute such further
instruments and to take such further actions as may reasonably be required to
carry out the intent of this Agreement.
14. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
15. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
16. NOTICES. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed, in the case of a Grantee, and, in
the case of the Company, to the respective addresses below:
Xx. Xxxx X. Xxxxxxxxx
00 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
Lason, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Executive Vice
President
or at such other address as a party may designate by 10 days advance written
notice to each other party.
17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the Company and,
subject to the restrictions on transfer herein set forth, be binding upon
Xxxxxxx's heirs, executors, administrators, successors
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and assigns and inure to the benefit of Xxxxxxx's heirs, executors,
administrators, successors and permitted assigns.
18. GOVERNING LAW. This Agreement and all documents
contemplated hereby, and all remedies in connection therewith and all questions
or transactions relating thereto, shall be construed in accordance with and
governed by the laws of the State of Michigan.
19. ENTIRE AGREEMENT. This Agreement and the Plan constitute
the entire understanding between the Grantee and the Company, and supersede all
other agreements, whether written or oral, with respect to the acquisition by
the Grantee of Common Stock from the Company pursuant to any option or option
agreement.
Please sign as Grantee the extra copy of this Agreement in the
space below and return it to the Secretary of the Company, Xxxxxxx X.
Xxxxxxxxxx, to confirm your understanding and acceptance of the agreements
contained in this letter.
Very truly yours,
LASON, INC.
By:
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Xxxxxxx X. Xxxxxxxxxx
Its: Executive Vice President
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THE UNDERSIGNED hereby acknowledges having read this
Agreement, the Plan, and the other enclosures to this Agreement, and hereby
agrees to be bound by all provisions set forth herein and in the Plan.
GRANTEE
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Xxxx X. Xxxxxxxxx
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