EXHIBIT 10.18
OUTSIDE PLAN
US DATAWORKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR
XXXXX XXXXXXXXXX (OPTIONEE)
AGREEMENT
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1. GRANT OF OPTION. US Dataworks, Inc. (the "Company"), hereby grants,
as of April 25, 2003 (Date of Grant), to Xxxxx Xxxxxxxxxx (the "Optionee") an
option (the "Option") to purchase up to 1,450,000 shares of the Company's Common
Stock, $0.0001 par value per share (the "Shares"), at an exercise price per
share equal to $0.11. The Option shall be subject to the terms and conditions
set forth herein. The Option is granted under an arrangement adopted by the
Board of Directors of the Company (the "Board") pursuant to which the Board has
authorized the issuance to certain key employees of not more than five percent
(5%) of the Company's Common Stock in any one-year period, and not more than ten
percent (10%) in the aggregate of the Company's Common Stock in any five-year
period. The Option is not granted under the Company's 2000 Stock Option Plan and
is not intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code. The Optionee hereby agrees to be bound by all of the
terms and conditions hereof and by all applicable laws and regulations.
2. DEFINITIONS. Unless otherwise provided herein, capitalized terms
used herein shall have the meanings attributed thereto in Section 16 of this
Agreement.
3. EXERCISE SCHEDULE. Except as otherwise provided in Sections 6 or 10
of this Agreement, the Option is exercisable in installments as provided below,
which shall be cumulative. To the extent that the Option has become exercisable
with respect to a certain number of Shares as provided below, the Option may
thereafter be exercised by the Optionee, in whole or in part, at any time or
from time to time prior to the expiration of the Option as provided herein. The
following table indicates each date (the "Vesting Date") upon which the Optionee
shall be entitled to exercise the Option with respect to the number of Shares
granted as indicated beside the date, provided that the Optionee has continued
as a Service Provider through and including the applicable Vesting Date:
NUMBER OF SHARES VESTING DATE
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725,000 March 31, 2005
725,000 March 31, 2006
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date; provided, however,
that vesting shall be subject to acceleration in connection with Optionee's
termination of service to the extent provided in the Employment Agreement
between Optionee and the Company dated as of April 2, 2003 (the "Employment
Agreement"), and pursuant to Section 10 below. Upon an Optionee's termination of
Service, any unvested portion of the Option shall terminate and be null and
void.
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4. METHOD OF EXERCISE. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such Shares as may be required by the
Company, including that the Shares are being purchased only for investment and
without any present intention to sell or to distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed to
be exercised after both (a) receipt by the Company of such written notice
accompanied by the exercise price and (b) arrangements that are satisfactory to
the Board or the Committee in its sole discretion have been made for Optionee's
payment to the Company of the amount, if any, that is necessary to be withheld
in accordance with applicable Federal or state withholding requirements. No
Shares will be issued pursuant to the Option unless and until such issuance and
such exercise shall comply with all relevant provisions of applicable law,
including the requirements of any stock exchange upon which the Shares then may
be traded. Shares issued upon exercise of the Option shall be issued in the name
of the Optionee or, if requested by the Optionee, in the name of the Optionee
and his or her spouse.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; (c) other Shares which (x) in the case of Shares acquired upon
exercise of the Option have been owned by the Optionee for more than six (6)
months on the date of surrender (or such other Shares as the Company determines
will not cause the Company to recognize for financial accounting purposes a
charge for compensation expense), and (y) have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares to which such
Option shall be exercised; (d) if the Shares are publicly traded, a
broker-assisted cashless exercise through a brokerage firm approved by the
Company; or (e) such other consideration or in such other manner as may be
determined by the Board or the Committee in its absolute discretion. A form of
payment will not be available if the Board or the Committee determines, in its
sole discretion, that such form of payment could violate any law or regulation.
6. TERMINATION OF OPTION.
(a) Any unexercised portion of the Option shall automatically
and without notice terminate and become null and void at the time of the
earliest to occur of:
(i) three months after the date on which the Optionee
ceases to be a Service Provider for any reason other than by reason of (A)
cause, which, for purposes of this Agreement, shall be as defined in the
Employment Agreement ("Cause"), (B) the Disability of the Optionee as determined
by a medical doctor satisfactory to the Board or the Committee, or (C) the death
of the Optionee;
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(ii) immediately upon the date of the termination of
the Optionee's Service for Cause;
(iii) twelve months after the date on which the
Optionee's Service is terminated by reason of Disability as determined by a
medical doctor satisfactory to the Board or the Committee (or, if later, three
months after the date on which the Optionee dies if such death shall occur
during such twelve-month period);
(iv) twelve months after the date of termination of
the Optionee's Service by reason of the death of the Optionee; or
(v) the tenth anniversary of the date as of which the
Option is granted.
(b) To the extent not previously exercised, (i) the Option
shall terminate immediately in the event of (1) the liquidation or dissolution
of the Company, or (2) any reorganization, merger, consolidation, asset sale or
other form of corporate transaction in which the Company does not survive,
unless the successor corporation, or a parent or subsidiary of such successor
corporation, assumes the Option or substitutes an equivalent option or right,
and (ii) the Board or the Committee in its sole discretion may by written notice
("cancellation notice") cancel, effective upon the consummation of any
reorganization, merger, consolidation, asset sale or other form of corporate
transaction in which the Company does survive, the Option (or portion thereof)
that remains unexercised on such date. The Board or the Committee shall give
written notice of any proposed transaction referred to in this Section 6(b) a
reasonable period of time as shall be determined by the Board or the Committee
prior to the closing date for such transaction (which notice may be given either
before or after approval of such transaction), in order that Optionee may have a
reasonable period of time as shall be determined by the Board or the Committee
within which to exercise the Option if and to the extent that it then is
exercisable (including any portion of the Option that may become exercisable
upon the closing date of such transaction). The Optionee may condition his
exercise of the Option upon the consummation of a transaction referred to in
this Section 6(b).
(c) For the purposes of Section 6(b) hereof, the Option shall
be considered assumed if, following the reorganization, merger, consolidation,
or asset sale, the option or right confers the right to purchase or receive, for
each Share subject to the Option immediately prior to the reorganization,
merger, consolidation, or asset sale, the consideration (whether stock, cash, or
other securities or property) received in the reorganization, merger,
consolidation, or asset sale by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority or
the outstanding Shares), provided, however, that if such consideration received
in the reorganization, merger, consolidation, or asset sale is not solely common
stock of the successor corporation or its Parent, the Board or the Committee
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per Share consideration received by
holders of Common Stock in the reorganization, merger, consolidation, or asset
sale.
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7. NON-TRANSFERABILITY.
(a) Unless the prior written consent of the Board or the
Committee is obtained (which consent may be withheld for any reason), this
Option is not transferable otherwise than by will or the laws of descent and
distribution, and any attempt to make any such prohibited transfer shall be
void. This Option shall be exercisable during the Optionee's lifetime only by
the Optionee, or in the case of the Option that has been assigned or transferred
with the prior written consent of the Board or the Committee, only by the
permitted assignee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.
(b) No Shares acquired pursuant to the exercise of the Option
may be sold, assigned, pledged or otherwise transferred prior to the expiration
of the six-month period following the date on which the Option was granted,
unless the transaction does not violate the requirements of Rule 16b-3
promulgated under the Exchange Act.
8. NO RIGHTS OF STOCKHOLDERS. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the Shares are issued, except as provided in Section 9 of this
Agreement.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The number of shares of
Common Stock covered by this Option and the price per Share of Common Stock
covered by this Option shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock affected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to this Option.
10. ACCELERATION OF EXERCISABILITY OF OPTION. This Option shall become
immediately and fully exercisable in the event that (a) the Option is terminated
pursuant to Section 6(b)(i) hereof, (b) the Board or the Committee exercises its
discretion to provide a cancellation notice with respect to the Option pursuant
to Section 6(b)(ii) hereof, or (c) there is a Change in Control.
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11. NO RIGHT TO CONTINUED SERVICE. Neither the Option nor this
Agreement shall confer upon the Optionee any right to continued employment or
service with the Company.
12. LAW GOVERNING. This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Nevada.
13. INTERPRETATIONS OF THE BOARD OR THE COMMITTEE CONTROLLING. This
Agreement is subject to such rules, regulations and interpretations relating
hereto adopted by the Board or the Committee as may be in effect from time to
time. The Optionee accepts the Option subject to all the terms and provisions of
this Agreement. The undersigned Optionee hereby accepts as binding, conclusive
and final all decisions or interpretations of the Board or the Committee upon
any questions arising under this Agreement.
14. NOTICES. Any notice under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at US Dataworks, Inc.,
0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx XX 00000, or if the Company should move
its principal office, to such principal office, and, in the case of the
Optionee, to the Optionee's last permanent address as shown on the Company's
records, subject to the right of either party to designate some other address at
any time hereafter in a notice satisfying the requirements of this Section 14.
15. WITHHOLDING OR DEDUCTION FOR TAXES. If at any time specified herein
for the issuance or delivery of any Common Stock to the Optionee, any law or
regulation of any governmental authority having jurisdiction in the premises
shall require the Company to withhold, or to make any deduction for, any taxes
or to take any other action in connection with the issuance or delivery then to
be made, the issuance or delivery shall be deferred until the withholding or
deduction shall have been provided for by the Optionee or beneficiary, or other
appropriate action shall have been taken.
16. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company, as
constituted from time to time.
(b) "Change in Control" means the occurrence of any of the
following events:
(i) A change in the composition of the Board of
Directors occurs, as a result of which fewer than two-thirds of the incumbent
directors are directors who either:
(A) Had been directors of the Company on the
"look-back date" (as defined below) (the "original directors"); or
(B) Were elected, or nominated for election, to
the Board of Directors with the affirmative votes of at least a majority of the
aggregate of the original directors who were still in office at the time of the
election or nomination and the directors whose election or nomination was
previously so approved (the "continuing directors"); or
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(ii) Any "person" (as defined below) who by the
acquisition or aggregation of securities, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of
directors (the "Base Capital Stock"); except that any change in the relative
beneficial ownership of the Company's securities by any person resulting solely
from a reduction in the aggregate number of outstanding shares of Base Capital
Stock, and any decrease thereafter in such person's ownership of securities,
shall be disregarded until such person increases in any manner, directly or
indirectly, such person's beneficial ownership of any securities of the Company;
(iii) The consummation of a merger or consolidation
of the Corporation with or into another entity or any other corporate
reorganization, if persons who were not stockholders of the Company immediately
prior to such merger, consolidation or other reorganization own immediately
after such merger, consolidation or other reorganization 50% or more of the
voting power of the outstanding securities of each of (A) the continuing or
surviving entity and (B) any direct or indirect parent corporation of such
continuing or surviving entity; or
(iv) The sale, transfer or other disposition of all
or substantially all of the Company's assets.
For purposes of subsection (b)(i) above, the term "look-back" date
shall mean the later of (1) July 25, 2002 or (2) the date 24 months prior to the
date of the event that may constitute a Change in Control.
For purposes of subsection (b)(ii) above, the term "person" shall have
the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act
but shall exclude (1) a trustee or other fiduciary holding securities under an
employee benefit plan maintained by the Company or a Parent or Subsidiary and
(2) a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of the Common
Stock.
Any other provision of this Section 16(b) notwithstanding, a
transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means a committee of two or more Directors
delegated by the Board to administer outstanding Options.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means US Dataworks, Inc., a Nevada corporation.
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(g) "Consultant" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services to
such entity.
(h) "Director" means a member of the Board of Directors of the
Company.
(i) "Disability" means total and permanent disability as
defined in Section 22(e) (3) of the Code.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(k) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the date on which the Option is granted, as reported in The Wall Street Journal
or such other source as the Board or the Committee deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the date on which the Option is granted; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board or the Committee.
(l) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(m) "Service" means service as an Employee, Director or
Consultant.
(n) "Service Provider" means an Employee, Director or
Consultant.
(o) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the ___________ day of May, 2003.
COMPANY:
US DATAWORKS, INC.
By: /s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Chief Executive Officer
Optionee acknowledges receipt of this Agreement and represents that he
is familiar with the terms and provisions hereof, and hereby accepts this Option
subject to all of the terms and provisions hereof. Optionee has reviewed this
Agreement in its entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement, and fully understands all provisions
of the Agreement.
Dated: May 21, 2003 OPTIONEE: XXXXX XXXXXXXXXX
By: /S/ XXXXX XXXXXXXXX
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(signature)
XXXXX XXXXXXXXX
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(print name)
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