EXHIBIT 10.16
QUALIFIED STOCK OPTION AGREEMENT
UNDER THE
RSI SYSTEMS, INC.
1994 STOCK OPTION PLAN
THIS AGREEMENT is dated effective as of the grant date set forth on
Exhibit A attached hereto, between RSI Systems, Inc., a Minnesota corporation
(the "Company"), and the employee listed on Exhibit A ("Optionee").
WHEREAS, the Company has adopted the RSI Systems, Inc. 1994 Stock Option
Plan (the "Plan") to permit stock options to be granted to certain key employees
and other persons providing valuable services to the Company; and
WHEREAS, the Company desires to grant and the Optionee desires to accept
the options to purchase shares of common stock of the Company (as defined
below);
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements set forth below, it is mutually agreed as follows:
1. Grant of Options. The Company hereby grants to Optionee an option to
purchase from the Company all or any part of an aggregate amount of the shares
of the common stock of the Company, par value $0.01 per share (the "Common
Stock"), at the option price and on other terms, as set forth in Exhibit A
attached hereto and made a part hereof. The date of this Agreement is the
effective date of the grant. This option is intended to qualify as an incentive
stock option as described in Section 422 of the Internal Revenue Code of 1986.
2. Incorporation of Plan by Reference. This option and any shares
purchased upon the exercise of this option shall be subject to each and every
provision of the Plan. A copy of the Plan and all amendments is available from
the Company upon request of the Optionee. All terms contained in this Agreement
which are not defined in this Agreement shall have the same meaning given to
such terms in the Plan.
3. Exercise Period. This option shall vest and become exercisable in
accordance with the schedule attached hereto as Exhibit A and made a part
hereof. If Optionee terminates employment prior to an applicable vesting date,
all non-vested options shall be immediately forfeited. All options must be
exercised on or before a date five (5) years from the date of the grant.
4. Exercise of Option. This option may be exercised only by written notice
of intent to the Company at its office at 0000 Xxxxx Xxxxxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000. Such notice shall state the number of shares in respect of
which the option is being exercised and shall be accompanied by payment for such
shares in cash, certified or cashier's check or by personal check, if acceptable
to the Committee, or in such other manner as specified in the Plan. A form of
Notice of Exercise is attached hereto.
5. Withholding. In the event that the Optionee elects to exercise this
Option or any part thereof, and if the Company shall be required to withhold any
amounts by reasons of any federal, state or local tax laws, rules or regulations
in respect of the issuance of shares to the Optionee pursuant to the Option, the
Company shall be entitled to deduct and withhold such amounts from any payments
to be made to the Optionee. In any event, the Optionee shall make available to
the Company, promptly when requested by the Company, sufficient funds to meet
the requirements of such withholding; and the Company shall be entitled to take
and authorize such steps as it may deem advisable in order to have such funds
available to the Company out of any funds or property due or to become to the
Optionee.
6. Exercise Upon Death or Termination of Employment. If the Optionee's
employment with the Company or any subsidiary terminates for any reason other
than gross misconduct, the option shall remain in force for a period of ninety
(90) days and remain subject to the terms of the Plan and this Agreement. If
Optionee shall die while an employee of the Company or any subsidiary or within
ninety (90) days after termination of employment, this option may be exercised
(subject to the previous sentence), to the extent that the Optionee was entitled
to do so at the date of death, by the person or persons to whom Optionee's
rights under this option pass by will or applicable law, or if no such person
has such right, by his or her executors or administrators, subject to the terms
of this Agreement. If Optionee is terminated by reason of gross misconduct as
described in the Plan, this option shall terminate as of the date of such
termination.
7. No Right of Employment. Nothing contained in this Agreement shall
obligate the Company or any subsidiary of the Company to continue the employment
of Optionee for any particular period or interfere with the right of the Company
or any such subsidiary to terminate Optionee's employment at any time.
8. No Shareholder Rights. Optionee shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this option prior to the
date of issuance of a certificate or certificates for such shares.
9. Investment Representation. Notice of the exercise of this option shall
include a representation that any of the option shares purchased shall be
acquired as an investment and not with a view to, or for sale in connection
with, any public distribution.
10. Compliance with Law and Regulations. The Optionee acknowledges that
this option may not be exercised until the Company has taken all actions then
required to comply with all applicable federal and state laws, rules and
regulations and any exchange on which the stock may then be listed. The
certificates representing the shares purchased upon the exercise of this option
shall bear a legend in substantially the following form:
THESE SHARES HAVE NOT BEEN REGISTERED EITHER UNDER ANY APPLICABLE FEDERAL
LAW AND RULES AND RESALE WILL NOT BE PERMITTED UNDER STATE LAW UNLESS THE
SHARES ARE FIRST REGISTERED UNDER THE MINNESOTA SECURITIES LAW. FURTHER,
NO SALE, OFFER TO SELL, OR TRANSFER OF THESE SHARES SHALL BE MADE UNLESS A
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, WITH RESPECT TO SUCH SHARES IS THEN IN
EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS
THEN IN FACT APPLICABLE TO SUCH SHARES.
11. Non-Transferability. This option shall not be transferable other than
by will or by laws of descent and distribution. During the lifetime of the
Optionee, this option shall be exercisable only by such Optionee.
12. Dispute or Disagreement. As a condition of the granting of this
option, the Optionee agrees that any dispute or disagreement which may arise
under or as a result of or pursuant to this Agreement or the Plan shall be
determined by the Committee in its sole discretion, and that any interpretation
by the Committee of the terms of this Agreement or the Plan shall be final,
binding and conclusive.
13. Other Assistance. Upon the exercise of this option the Optionee or
other person exercising the option must execute a shareholder's agreement and
make any representation or give any commitment which the Committee, in its
discretion, deems necessary or advisable by reason of the securities laws of the
United States or any state, and execute any document or pay any sum of money in
respect of taxes or undertake to pay or have paid any such sum which the
Committee, in its discretion, deems necessary be reason of the Code or any rule
or regulation thereunder, or by reason of the tax laws of any state.
14. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the legal representatives, executors, administrators, successors
and assigns of each parties to this Agreement.
15. Complete Agreement. This Agreement sets forth the entire understanding
of the parties hereto and shall not be amended, changed or terminated except by
an instrument in writing signed by the parties to this Agreement.
16. Counterparts and Governing Law. This Agreement may be executed in
counterparts, and its validity, construction and performance, shall be governed
by the laws of the state of Minnesota.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the
date first above written.
RSI SYSTEMS, INC.
By /s/ Xxxxxxx X. Xxxxx
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Print Name X. X. Xxxxx
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Title Chairman
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OPTIONEE
[Optionee's signature is set forth on
Exhibit A attached hereto and made a
part hereof.]
NOTICE OF EXERCISE OF STOCK OPTION
RSI Systems, Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
The undersigned is the holder of a qualified stock option (the "Option")
to purchase shares of common stock ("Stock") of RSI Systems, Inc. (the
"Company"), pursuant to the terms of the Company's 1994 Stock Option Plan (the
"Plan") and the Stock Option Agreement between the Company and the undersigned
(the "Agreement"). The undersigned hereby irrevocably elects to exercise the
Option to purchase _____ shares of common stock (the "Option Shares"). Enclosed
herewith are (1) the original signed Agreement, and (2) payment for the Option
Shares as required under the Plan and the Agreement. The undersigned requests
that the certificate representing the Option Shares be issued in the name of the
undersigned and delivered to the address set forth below.
In connection with the issuance of the Option Shares to the undersigned,
the undersigned hereby certifies and represents to the Company that the
undersigned is acquiring such shares for the purpose of investment and not with
a view toward distribution. The undersigned understands that these securities
have not been registered either under any applicable federal law and rules or
applicable state law and rules and that resale will not be permitted under state
law unless the securities are first registered or the sale is a transaction
exempt from registration under the applicable state securities law.
The undersigned further understands that no sale, offer to sell, or
transfer of the Option Shares shall be made unless a registration statement
under the federal Securities Act of 1933, as amended (the "Act"), with respect
to the Option Shares is then in effect or an exemption from the registration
requirements of the Act is then in fact applicable to the Option Shares. The
undersigned understands that a legend reciting this investment restriction shall
be placed on any stock certificate that may be issued to the undersigned.
Dated:
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(Optionee Signature)
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(Address)
S.S. No.
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EXHIBIT A
TO STOCK OPTION AGREEMENT
RSI SYSTEMS, INC.
Name of Optionee: Xxxxxx Lies
Date of Grant: April 14, 1997
Number of Shares Granted: 100,000
Exercise Price: $1.125
Type of Option
(Qualified or Non-Qualified): Qualified
Vesting Schedule No. of Shares Vesting Date
---------------- ------------- --------------
Year 1 75,000 April 14, 1997
Year 2 8,333 April 14, 1998
Year 3 8,333 April 14, 1999
Year 4 8,333 April 14, 2000
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100,000
RSI Systems, Inc. Accepted and agreed to by the
undersigned Optionee
By /s/ X. X. Xxxxx /s/ Xxxxxx Lies
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Signature Xxxxxx Lies
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Chairman
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Title
[Please execute two copies of this Exhibit A
and return one copy to the Company.]
