OMNIS TECHNOLOGY CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement ("Agreement") is made and entered
into as of February 14, 2000 ("Grant Date") by and between Omnis Technology
Corporation, a Delaware corporation (the "Company"), and XXXXX XXXXX
("Optionee").
W I T N E S S E T H:
A. The Board of Directors of the Company ("Board") has adopted the Omnis
Technology Corporation 1999 Stock Option Plan to create additional incentives
for certain valued employees, directors, consultants and advisors of the Company
or its parent or subsidiary and to promote the financial success and progress of
the Company and such parents and subsidiaries. For purposes hereof the "Plan"
and all section references therein shall be defined as said 1999 Stock Option
Plan as amended or superseded during the term of this Agreement.
B. Optionee is a valued employee of the Company or a parent or subsidiary
thereof, and this Incentive Stock Option Agreement is executed pursuant to, and
is intended to carry out the purposes of, the Plan in connection with the grant
by the Company to Optionee of an incentive stock option as defined by Section
422 of the Internal Revenue Code of 1986, as amended or superseded (the "Code").
NOW, THEREFORE, it is agreed as follows:
1. Grant of Option. Subject to and upon the terms, conditions and
restrictions set forth in this Agreement and the Plan, the Company hereby grants
to Optionee as of the Grant Date an incentive stock option ("Option") to
purchase up to Ninety-Six Thousand Eight Hundred Twenty-Five (96,825) shares
("Option Shares") of the common stock of the Company during the Term hereof (as
defined in Section 3 hereof) at an Option Price of Twelve Dollars and
Twenty-Five Cents ($12.25) per share. For these purposes "Option Shares" also
shall include such stock or other securities as defined by the Plan.
2. Right to Exercise; Vesting.
a. Subject to the expiration or earlier termination of the Term of the
Option and to Section 2(b) hereof, Optionee shall have the right to exercise the
Option in accordance with the following three (3) year vesting schedule:
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(i) Optionee shall have no right to exercise any part of the Option at
any time prior to the expiration of one (1) year from the Grant Date;
(ii) The Option shall become exercisable with respect to Thirty Three
and Three Hundred Thirty Three Thousandths Percent (33.333%) of the Option
Shares upon the expiration of one (1) year from the Grant Date; and
(iii) The Option thereafter shall become exercisable with respect to an
additional Two Point Seven Hundred Seventy Seven Thousandths Percent
(2.777%) of the Option Shares on the last day of each month that commences
following the Grant Date.
b. Exercisable installments may be exercised by Optionee in whole or in
part and to the extent not exercised shall accumulate and be exercisable as
provided. The Company shall not be required to issue fractional shares at any
time; and any fractional shares remaining in the Option following any exercise
thereof shall be rounded down to the next nearest whole number of Shares.
3. Option Term. Subject to earlier termination as provided for in the Plan,
the specified term of the Option ("Term") shall be the period commencing as of
the Grant Date and ending on the expiration of ten (10) years from the Grant
Date. Upon the expiration of the Term or earlier termination of the Option as
provided for in the Plan, the Option shall cease to be exercisable and shall be
of no further force or effect. Such events of earlier termination include but
are not limited to termination of the employment of Optionee.
4. Non-Transferable. The Option shall not be transferable or assignable by
Optionee other than by will or the laws of descent and distribution, and the
Option may be exercised during the lifetime of Optionee solely by Optionee.
Subject to the foregoing, all transfers or assignments or attempted transfers or
assignments of the Option or this Agreement shall be void ab initio.
5. Plan; Controlling Terms.
a. The Option granted hereunder and this Agreement shall be governed by
and subject to each and all of the terms and provisions of the Plan, which is
hereby incorporated by reference in its entirety. All capitalized or other terms
not defined herein shall have the same meaning as in the Plan. In the event of
any conflict between the Plan and this Agreement, the Plan shall control.
Optionee acknowledges receipt of a copy of the Plan and the opportunity to
review the Plan and to consult with his or her legal advisors concerning the
Plan and this Agreement.
b. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE PLAN CONTAINS IMPORTANT
TERMS AND PROVISIONS THAT WILL APPLY
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TO AND CONTROL THE OPTION AND THIS AGREEMENT. THOSE TERMS INCLUDE WITHOUT
LIMITATION IMPORTANT CONDITIONS AND LIMITATIONS ON THE RIGHT OF OPTIONEE TO
EXERCISE THE OPTION; IMPORTANT RESTRICTIONS ON THE RIGHT OF OPTIONEE TO TRANSFER
THE OPTION OR THE OPTION SHARES RECEIVED UPON EXERCISE OF THE OPTION; EARLY
TERMINATION OF THE OPTION FOLLOWING THE OCCURRENCE OF CERTAIN EVENTS, INCLUDING
TERMINATION OF THE EMPLOYMENT OF OPTIONEE FOR ANY REASON; PROCEDURES FOR
EXERCISING THE OPTION; TAX WITHHOLDING AND NOTICE OBLIGATIONS; AND OTHER
SUBSTANTIAL RESTRICTIONS AND OBLIGATIONS IN ADDITION TO THOSE IN THIS AGREEMENT.
6. Tax Status of Option.
a. The Option is intended to be an incentive stock option as defined by
Section 422 of the Code for United States tax purposes, but the Company does not
represent or warrant that the Option so qualifies. Optionee should consult with
his or her own tax advisors regarding the tax effects of the Option and the
requirements for favorable tax treatment under Section 422 and other provisions
of the Code and other tax consequences of the Option under applicable law,
including but not limited to holding period requirements. Without limiting the
foregoing, in the event that the aggregate value of the Option Shares under the
Option and all other incentive stock options held by Optionee (whether granted
by the Company or any parent or subsidiary corporation thereof) exceeds the
dollar amount or other limitations then applicable under the Code when such
options are first exercisable, all or part of the Option may not qualify as an
incentive stock option under the Code.
b. Optionee hereby acknowledges that the rules and requirements of
Section 83 of the Code, including without limitation the election available
under Section 83(b) thereof, may be applicable to the receipt of Option Shares
by Optionee pursuant to this Agreement and the Plan. In the event that the
Option or any part thereof is not classified as an incentive stock option under
Section 422 of the Code, Optionee acknowledges that the exercise of the Option
and the filing or failure to file an election under Code Section 83(b) in timely
manner may result in adverse tax consequences to Optionee.
7. Acceleration of Exercise Right In Certain Events.
a. Acceleration Events. Notwithstanding any other right to exercise the
Option, the Option shall become fully exercisable during the fifteen (15) day
period ("Accelerated Exercise Period") immediately prior to the scheduled
consummation of:
(i) The sale or other transfer of more than Fifty Percent (50%) of the
capital stock of the Company in one or more related transactions for
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material consideration to any person or entity or group of persons or
entities not previously shareholders of the Company and not owned or
controlled by a majority of the previous shareholders of the Company, with
such shareholder status determined immediately prior to the transaction; or
(ii) The sale or other transfer of all or substantially all of the
assets of the Company in one or more related transactions not in the
ordinary course of the business of the Company to unrelated third parties,
whether by sale, exchange, merger, consolidation, reorganization,
dissolution or liquidation (collectively "Acceleration Events");
other than (1) any public offering of capital stock of the Company in a Public
Market (as defined in the Plan); (2) any transaction in which the Company is a
surviving parent of the transferee corporation or entity or is a surviving
subsidiary of a transferee parent corporation or entity owned or controlled by a
majority of the previous shareholders of the Company, with such shareholder
status determined immediately prior to the transaction; (3) any sale or transfer
of the capital stock owned or controlled by the majority shareholder or
shareholders of the Company to trusts or comparable entities for the primary
benefit of such shareholders or their family members or to the estate, heirs or
devisees of any such shareholder in the event of his or her death; or (4) any
transaction in which the Company reincorporates in another jurisdiction or
engages in other internal reorganization or changes in corporate structure
without the receipt of consideration; none of which shall be Acceleration Events
hereunder.
b. Substitution or Assumption of Option. Notwithstanding any other
provision hereof, no accelerated exercise of the Option shall be permitted if
the terms of the Acceleration Event provide, as a condition of the consummation
of such transaction, that the Option (or class of outstanding options of which
the Option is a part) shall either be assumed by a successor corporation (or
parent thereof) or be replaced with a comparable substitute option to purchase
shares of capital stock of a successor corporation (or parent thereof), which
substitution or assumption shall comply with Sections 422 and 424 of the Code;
and the Option may be assumed or replaced pursuant to such transaction.
Determination of comparability in the case of any substitute option shall be
made by the Board of Directors of the Company and shall be final, binding and
conclusive on Optionee. Optionee agrees to execute and deliver such documents as
reasonably required to effect such assumption or substitution hereunder.
c. Conditional Exercise; Termination. Any permitted exercise of the
Option during the Accelerated Exercise Period hereunder shall be conditioned
upon the consummation of the Acceleration Event and shall be effective only
immediately prior to such consummation, provided that Optionee may indicate in
writing that such exercise is unconditional with respect to all or part of the
Option then exercisable without regard to the acceleration provisions of this
Section. Upon consummation of the Acceleration Event, the Option shall terminate
and cease to be exercisable, unless assumed by the
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successor corporation or parent thereof. In the event such Acceleration Event is
not consummated, the Option shall revert to being exercisable in accordance with
the vesting schedule.
d. Exercise Period. In the event the expiration or earlier termination
of the Term of the Option shall occur prior to the expiration of the Accelerated
Exercise Period provided in this Section, then the Accelerated Exercise Period
shall be shortened to said expiration or earlier termination of the Term.
e. Other Provisions. The right of Optionee to exercise the Option
separately may be accelerated in part in the event of the termination of his
employment under certain circumstances, to the extent provided in Section 2(b)
hereof.
8. Limitations on Share Transfer; Mandatory Notice of Disposition. Optionee
shall transfer or dispose of the Option Shares only in accordance with the
provisions of this Agreement and the Plan. Without limiting the foregoing,
mandatory notice of disposition of any Option Shares must be made to the Company
as provided in the Plan and such disposition may be subject to tax withholding
or payments by Optionee.
9. Securities Laws; Restrictions on Grant or Issuance. THE RESTRICTIONS ON
THE TRANSFER OF THE OPTION OR THE OPTION SHARES SHALL BE IN ADDITION TO ANY
OTHER LIMITATIONS ON TRANSFER OR EXERCISE OF THE OPTION OR ISSUANCE OR TRANSFER
OF THE OPTION SHARES IMPOSED BY APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
THE GRANT OF THE OPTION AND THE EXERCISE OF THE OPTION AND THE ISSUANCE OF THE
OPTION SHARES UPON EXERCISE OF THE OPTION AND ANY RESALE OR OTHER TRANSFER OF
SUCH OPTION SHARES BY OPTIONEE SHALL BE SUBJECT TO COMPLIANCE WITH ALL
APPLICABLE REQUIREMENTS OF FEDERAL OR STATE LAW WITH RESPECT TO SUCH SECURITIES.
Notwithstanding any contrary provision of this Agreement:
a. Optionee understands that since the Option is not transferable, and
since the Option Shares have not been and may not be registered or exempt under
applicable statutes, Optionee may bear the economic risk of the investment for
an indefinite period of time. The Option Shares may not be sold or otherwise
disposed of until such time as the Option Shares are registered under the
Securities Act of 1933 ("Securities Act") or the Option Shares may be sold
pursuant to an applicable exemption from the registration requirements of the
Securities Act. Optionee understands that the Company has no obligation to file
a registration statement under the Securities Act for the Option or the Option
Shares or to otherwise assist Optionee in complying with any exemption from
registration.
b. Optionee represents and warrants that the Option is being acquired
and the Option Shares will be acquired upon exercise for his or her own account
and not
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with a view to or for sale in connection with any distribution of such
securities. Optionee further acknowledges that any investment in the Common
Stock of the Company is inherently speculative and illiquid and subject to
material risks.
c. As a condition to the exercise of the Option, the Company may
require Optionee to satisfy any qualifications that may be necessary or
appropriate in the sole judgment of the Company or its counsel to evidence
compliance with any applicable law or regulation and to make any written
representation or warranty with respect thereto as may be requested by the
Company.
d. Notwithstanding any contrary provision hereof, the inability of the
Company with reasonable efforts to obtain approval from any regulatory body
having authority deemed by the Company to be necessary for the lawful issuance
and sale of any Option Shares pursuant to the Option shall relieve the Company
of any liability in respect of the non-issuance or sale of the Option Shares as
to which such approval shall not have been obtained.
10. Assignment; Binding Effect.
a. The Company may transfer or assign any of its rights or obligations
under this Agreement or the Plan. Optionee shall have no right to transfer or
assign any of the rights and obligations of Optionee under the Option or this
Agreement, subject to Section 4 hereof in the case of a will or the laws of
descent and distribution.
b. Subject to the foregoing, this Agreement shall inure to the benefit
of and be binding upon each of the parties hereto and the officers, directors,
employees, shareholders, owners, agents, representatives, parents, subsidiaries,
affiliates, successors and assigns of the Company, and the spouses,
representatives, executors, administrators, heirs, devisees, agents, successors
and assigns of Optionee.
11. Representations and Warranties.
a. Optionee represents and warrants that he or she has read the Plan
and this Agreement and has had the opportunity to consult with his or her legal
advisors concerning the legal and tax effects of the Plan and this Agreement and
the Option.
b. Each party represents and warrants that such party has the full
right, power, legal capacity and authority to enter into and execute this
Agreement and to discharge all of its obligations under the terms hereof, and
that such party does not have any outstanding obligation and is not a party to
any outstanding agreement which obligation or agreement is inconsistent with
this Agreement. This Agreement has been duly executed and delivered by said
party, and constitutes its valid and legally binding agreement and obligation
and is enforceable in accordance with its terms.
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12. Miscellaneous.
a. This Agreement together with the Plan sets forth the entire
agreement of the parties relating to the subject matter hereof, subject to the
provisions of the Plan; and the Plan and this Agreement shall supersede any
prior discussions, understandings and agreements concerning the grant of stock
options or the issuance of option stock between the parties, provided however
that this Agreement shall not supersede and shall be in addition to any separate
fully executed written stock option agreement between the parties pursuant to
any separate stock option grant by the Company. This Agreement may be amended by
further written agreement signed by each of the parties.
b. This Agreement shall be construed in accordance with and governed by
the laws of the State of California without reference to the principles of
conflicts of law.
c. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law. In
the event that any provision of this Agreement shall be held by the final
judgment of a court of competent jurisdiction to be invalid or unlawful or
unenforceable, then the remaining provisions of this Agreement shall remain in
full force and effect and shall be construed to give the fullest effect to the
purpose of the Plan and this Agreement and the intended qualification of the
Plan and this Agreement pursuant to Section 422 of the Code and pursuant to
Section 25102 of the California Corporations Code and the respective regulations
and rules thereunder (as amended or superseded).
d. No remedy conferred by this Agreement or the Plan shall be exclusive
of any other remedy, and each and all such remedies shall be cumulative. The
waiver of any breach or violation of this Agreement in whole or in part shall
not operate as a waiver of any subsequent breaches or violations of the same or
a different kind. Any exercise or failure to exercise by a party of any rights
or remedies under this Agreement shall not operate as a waiver of the right of
such party to exercise the same or different rights or remedies in a subsequent
event.
e. Both parties agree to execute any additional documents or
instruments necessary or appropriate to fully effectuate out the purposes of
this Agreement and which are consistent with the Plan.
f. Section headings in this Agreement are for the convenience of the
parties and are not part of the agreement of the parties and shall not be used
in the construction hereof. Whenever in this Agreement the context requires,
references to the plural shall include the singular and the singular the plural,
and each gender shall include all other genders. No provision in this Agreement
shall be interpreted or construed against any party because such party or its
counsel was the drafter thereof.
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g. THIS AGREEMENT AND THE TERMS AND CONDITIONS HEREOF ARE CONFIDENTIAL
AND OPTIONEE SHALL NOT DISCLOSE ANY OF THE TERMS OR CONDITIONS HEREOF TO ANY
OTHER EMPLOYEE OF THE COMPANY OR TO ANY OTHER PERSON FOR ANY PURPOSE, OTHER THAN
TO THE SPOUSE, LEGAL COUNSEL OR ACCOUNTING AND FINANCIAL ADVISORS OF OPTIONEE,
OR TO THE APPROPRIATE EMPLOYEES OR REPRESENTATIVES OF THE COMPANY AS NECESSARY
IN CONNECTION WITH THE ENFORCEMENT, MODIFICATION OR EXERCISE OF THIS AGREEMENT,
OR AS REQUIRED IN CONNECTION WITH LEGAL PROCEEDINGS IN WHICH OPTIONEE IS A PARTY
OR WITNESS.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and delivered in duplicate on its behalf by its duly authorized officer, and
Optionee has also executed and delivered this Agreement in duplicate, all on the
date first above written.
OMNIS TECHNOLOGY CORPORATION
By: ____________________________
Xxxxx X. Xxxxx
Chief Operating Officer and
Chief Financial Officer
OPTIONEE
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XXXXX XXXXX
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