MERISEL, INC.
1997 Stock Award and Incentive Plan
Nonqualified Stock Option Agreement
This NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is
entered into this 14th day of January, 1998 (the "Grant Date"), by and between
MERISEL, INC., a Delaware corporation (the "Company"), and XxxxxXxxx XxxxXxxx,
an employee of the Company (the "Optionee"). Any capitalized terms not defined
herein shall have the meaning set forth in the Plan (as defined below).
1. Grant of Option
Pursuant to the Merisel, Inc. 1997 Stock Award and Incentive
Plan (the "Plan"), the Committee has determined that the Optionee is to be
granted, on the terms and conditions set forth herein (and subject to the terms
and provisions of the Plan), a nonqualified stock option (an "Option") to
purchase shares of the Company's common stock, par value $.01 per share ("Common
Stock"), and hereby grants such Option. It is intended that the Option
constitute a "nonqualified stock option" and not an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. Number of Shares and Option Price
The Option entitles the Optionee to purchase Total shares of
Common Stock (the "Option Shares") at an exercise price (the "Option Price") of
$4.06 per share.
3. Term of Option and Agreement
Subject to Section 5 hereof, the Option, this Agreement and
all rights to acquire Common Stock hereunder shall expire when the first of the
following occurs:
(a) the expiration of ten years from the Grant
Date, provided, however, that if the Optionee is a 10 percent stockholder
of the Company as detailed in Section 422A(c)(8) of the Code, the expiration of
five years from the Grant Date;
(b) the date and time of the termination of
the Optionee's employment by, or status as an independent contractor of,
the Company or a Subsidiary, except that, with respect to any Option that is
vested and exercisable under Section 4(b) hereof upon the date of such
termination, this Agreement shall expire on the expiration of three months
from the date of such termination (unless by reason of death) or, if such
termination is by reason of Optionee's Disability (as defined below), the
expiration of one year from the date of such termination; and
(c) the expiration of one year from the date
of Optionee's death if such death occurs while Optionee is, or not later
than three months after Optionee has ceased to be, an employee or
independent contractor of the Company or any Subsidiary.
"Disability" means the inability of the Optionee to perform
substantially his duties and responsibilities to the Company or a Subsidiary by
reason of a physical or mental disability or infirmity (i) for a continuous
period of six months or (ii) such earlier time as the Optionee submits medical
evidence satisfactory to the Company that he has a physical or mental disability
or infirmity which will likely prevent him from returning to the performance of
his work duties for six months or longer. The date of such Disability shall be
on the last day of such six-month period or the day on which the Optionee
submits such satisfactory medical evidence, as the case may be.
4. Exercise of Option
Subject to the restrictions on exercise set forth in Section
10, this Option may be exercised by the Optionee (or, after his or her death, by
the person designated in Section 6) in accordance with the following provisions:
(a) this Option may be exercised by the Optionee
upon delivery of the following to the Company at its principal executive
offices:
(i) a written notice of exercise, in
a form provided by or otherwise satisfactory to the Secretary of
the Company, which identifies this Agreement and states the
number (which may not be less than 100) of shares of Common Stock then
being purchased;
(ii) payment of the Option Price either (A)
in lawful money of the United States of America in an amount equal to
the Option Price in such form as is acceptable to the Company or (B)
by delivery of shares of Common Stock having a Fair Market Value (as of
the date of exercise) equal to the Option Price or (C) any combination
of (A) and (B) which equals the Option Price or (D) by transacting a
"same day sale" and thereby executing a "cashless" option exercise
provided such a transaction does not violate any applicable federal or
state laws or regulations; and
(iii) if requested by the Company either
before or after the Company's receipt of the notice of exercise,
payment in such form as is acceptable to the Company of the amount
of any taxes (other than stock issue or transfer taxes) that the
Company is obligated to collect or withhold by reason of the exercise
of this Option.
(b) Subject to the provisions of the Plan and this
Agreement, this Option shall become
vested and exercisable in the following installments:
Anniversary of Percentage of Option
Grant Date Shares Exercisable
First Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25%
Second Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25%
Third Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25%
Fourth Year . . . . . . . . . . . . . . . . . . . . . . . . . . . .25%
The installments shall be cumulative, such that this Option
may be exercised as to any or all of the Option Shares covered by an installment
at any time or times after the installment becomes vested and exercisable and
until this Option expires or terminates. Any other provision of the Plan or this
Agreement notwithstanding, no further exercise or vesting rights shall accrue
after Optionee ceases to be an employee or independent contractor of the Company
or a Subsidiary. If the Optionee takes a leave of absence from the Company or a
Subsidiary in excess of six months' duration, other than a sick leave or
disability leave (to be determined in the sole discretion of the Committee),
then the date when any installment of this Option would otherwise become vested
and exercisable under the foregoing schedule shall be delayed for a period equal
to the duration of such leave of absence.
(c) Notwithstanding any contrary provisions of this Agreement,
the Option may not be exercised unless the restrictions on exercise set forth in
Section 10 have been met.
(d) The Company retains the right to amend the schedule of
vesting, as set forth in Section 4(b) above, as follows:
(i) accelerate any unvested and
unexercisable portion of this Option to permit the Optionee to
exercise this Option with respect to that accelerated portion and
any previously vested and exercisable portion of the Option hereby
granted; or
(ii) accelerate the date by which any
unexercised portion of this Option terminates, requiring the
Optionee to exercise the vested and unexercised portion of the
Option or forfeit such Option; however, such date shall, in no event,
be less than two (2) weeks from the date the Optionee is informed in
writing of such acceleration.
(e) After receiving a proper notice of exercise, and timely
payment of the Option Price and any applicable tax withholding, the Company
shall cause to be issued a certificate or certificates for the Option Shares as
to which this Option has been exercised, registered in the name of the person
exercising this Option (or in the names of such person and his or her spouse as
community property or as joint tenants with right of survivorship) and bearing
any appropriate legends. The Company shall cause such certificate or
certificates to be delivered to or upon the order of the person exercising this
Option.
5. Termination of Employment
Notwithstanding any other provision of this Agreement, the
Company shall retain the right to terminate all unexercised Options, whether
vested or not, granted to an Optionee pursuant to the Plan if the employment of
such Optionee is terminated, except if such termination of employment is by
reason of death or Disability.
6. Death of Optionee; No Assignment
The rights of the Optionee under this Agreement may not be
assigned or transferred except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order ("QDRO"). This
Option shall be exercisable during the Optionee's lifetime only by the Optionee
or his guardian or legal representative or as otherwise provided by a QDRO. Any
attempt to assign this Option in contravention of this Agreement shall be void
and shall have no effect. If the Optionee should die while he or she is, or not
later than three months after he or she has ceased to be, an employee or
independent contractor of the Company or a Subsidiary, his or her legal
representative, his or her legatee, or the person who acquired the right to
exercise this Option by reason of the death of such Optionee (this group shall
be collectively known as "Successors") succeeds to the Optionee's rights under
this Agreement. After the death of such Optionee, only his or her Successor may
exercise this Option.
7. No Employment or Service Contract
Nothing in this Agreement or the Plan shall confer upon the
Optionee any right to continue in the employment or service of the Company (or
any parent corporation of the Company or Subsidiary employing or retaining the
Optionee) for any period of time or interfere with or restrict in any way the
rights of the Company (or any parent corporation of the Company or Subsidiary
employing or retaining the Optionee) or the Optionee, which rights are hereby
expressly reserved by each, to terminate the employment of the Optionee at any
time for any reason whatsoever, with or without cause.
8. No Rights as Stockholders
The Optionee shall have no rights as a stockholder of any
Option Shares until the date of issuance of a stock certificate representing
such Shares.
9. Agreement Subject To Plan
This Agreement is made under the provisions of the Plan and
shall be interpreted in a manner consistent with it. Any provision in this
Agreement inconsistent with the Plan shall be superseded and governed by the
Plan. A copy of the Plan is available to the Optionee at the Company's principal
executive offices upon request and without charge. Optionee has carefully
reviewed the Plan and understands the restrictions on the Option Shares to be
purchased by Optionee pursuant to this Option.
10. Restrictions on Exercise
This Option may not be exercised until (a) the issuance to the
Optionee and the resale to the public of the Option Shares issuable upon
exercise have been registered under the Securities Act of 1933, as amended (the
"Act"), on a Form S-8 (or equivalent Form) and such issuance otherwise complies
with applicable federal and state securities laws or (b) the Company receives an
opinion of counsel to Optionee in form and substance satisfactory to the Company
that (i) the issuance of such Shares is exempt from registration under the Act
and otherwise complies with federal and state securities laws, and (ii) the
issuance of such Shares, when combined with the issuance of stock or other
securities of the Company issuable under any employee stock option or related
plan, will not result in a violation of federal or state securities laws. As a
condition of the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as the Company may
request in order to comply with any applicable law or regulation.
11. No Disclosure
Optionee acknowledges and agrees that neither the Company, its
stockholders nor its directors and officers has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Common Stock at any time, whether before,
at the time of or after termination of the Optionee as an employee or
independent contractor of the Company or a Subsidiary, including, without
limitation, any information concerning plans for the Company to make a public
offering of its securities, to acquire another entity or to be acquired by or
merged with or into another firm or entity.
12. Investment Representation
Upon the exercise of all or any part of this Option, the
Committee may require the Optionee to furnish to the Company an agreement (in
such form as the Committee may specify) in which the Optionee shall represent
that the Option Shares are to be acquired for the Optionee's own account and not
with a view to the sale or distribution thereof.
13. Authority of the Committee
The Committee shall have full authority to interpret and
construe the terms of the Plan and this Agreement. The determination of the
Committee as to any such of interpretation or construction shall be final,
binding and conclusive.
14. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to
principles of conflicts of laws.
The Company and the Optionee have executed this Agreement as
of the date set forth in the first paragraph.
MERISEL, INC.
By: ___________________________
Xxxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
The undersigned hereby accepts and
agrees to all the terms and
provisions of the foregoing
Agreement and to all the terms and
provisions of the Plan herein
incorporated by reference.
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Optionee
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