Form of Non-Qualified Stock Option
Agreement for Xxxxxx Xxxxxx Xxxxxxx
and Xxxxxx X. Xxxxxxxx
Date of Grant: April 30, 2001
AREMISSOFT CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
THE GRANT OF THIS OPTION SHALL NOT IMPOSE AN OBLIGATION UPON THE OPTIONEE TO
EXERCISE THIS OPTION.
THIS AGREEMENT is made by and between AremisSoft Corporation, a Delaware
corporation (the "Company"), and ("Optionee"), effective as April 30, 2001.
In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee, in the manner and,
subject to the conditions hereinafter provided, the right, privilege and option
to purchase (the "Option") an aggregate of ( ) shares of the Company's common
stock, $.001 par value (the "Shares" or "Common Stock").
2. Term of Option. Subject to the terms, conditions and restrictions set forth
herein, the term of this Option shall be five (5) years from the date of grant
(the "Expiration Date"). Any portion of this Option not exercised prior to the
Expiration Date shall thereupon become null and void.
3. Exercise of Option.
3.1. Vesting of Option. This Option shall become exercisable over a three
year period, with Shares vesting each month for the ( ) month and Shares vesting
each month for the remaining ( ) month. Each month of vesting, as provided
above, shall be referred to as ah month for "Vesting Date" for that portion of
this Option ("Vested Portion").
All or any portion of the Shares underlying a Vested Portion of this Option
may be purchased during the term of this Option, but not as to less than 100
Shares (unless the remaining Shares then constituting the Vested Portion of this
Option is less than 100 Shares) at any time.
3.2. Manner of Exercise. The Vested Portion of this Option may be exercised
from time to time, in whole or in part, by presentation of a Request to Exercise
Form, substantially in the form attached hereto, to the Company at its principal
office, which Form must be duly executed by the Optionee and accompanied by
payment, subject to any legal restrictions, by: (a) cash; (b) check payable to
the Company; (c) the surrender of shares of Stock owned by the Optionee that
have been held by the Optionee for at least six (6) months, which surrendered
shares shall be valued at Fair Market Value as of the date of such exercise; (d)
provided that a public market for the Stock exists, a "same day sale" commitment
from the Optionee and a NASD Dealer or other acceptable intermediary whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
shares so purchased to pay for the Exercise Price and whereby the NASD Dealer or
other acceptable intermediary irrevocably commits upon receipt of such shares to
forward the Exercise Price directly to the Company; or (e) any combination of
the foregoing, in the aggregate amount of the Exercise Price (as defined below),
multiplied by the number of shares of Stock the Optionee is purchasing at such
time, subject to reduction for withholding for tax obligations as provided in
Section 15.
Upon receipt and acceptance by the Company of such Form, accompanied by the
payment specified, the Optionee shall be deemed to be the record owner of the
Stock purchased, notwithstanding that the stock transfer books of the Company
may then be closed or that certificates representing the Stock purchased under
this Option may not then be actually delivered to the Optionee.
3.3. Exercise Price. The exercise price (the "Exercise Price") payable upon
exercise of this Option shall be seventeen dollars and eighty cents (US $17.80)
per Share.
4. Exercise After Certain Events.
4.1. Termination of Employment/Consulting/Directorship. This Option shall
be exercisable by Optionee at any time prior to the Expiration Date, whether or
not Optionee continues to be a consultant of the Company.
4.2. Permanent Disability and Death. If an Optionee becomes permanently and
totally disabled (within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended), or dies prior to the Expiration Date, Options then
held (to the extent then exercisable) may be exercised by the Optionee,
Optionee's spouse, guardian, heirs or legatees, the Optionee's personal
representative, or by the person to whom the Option is transferred by will or
the laws of descent and distribution, in whole or in part, at any time prior to
the Expiration Date.
5. Restrictions on Transfer of Option. Except as otherwise provided below,
this Option shall not be transferable other than by will or by the laws of
descent and distribution, and during the lifetime of the Optionee, only the
Optionee, his or her guardian or legal representative or authorized assignee may
exercise the Option. The Optionee may designate a beneficiary to exercise his or
her Options after the Optionee's death. The Company may provide for transfer of
the Option, with or without payment of consideration, to: (i) the following
family members of the Optionee, including adoptive relationships: a child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, niece, nephew, former spouse (whether by gift or pursuant to a
domestic relations order); (ii) any person sharing the employee's household
(other than a tenant or employee); (iii) a family controlled or nonfamily
controlled partnership, corporation, limited liability company, or trust; or
(iv) a foundation in which family members (as described above) control the
management of assets. The assigned portion may only be exercised by the person
or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Company may deem
appropriate.
6. Adjustment for Changes in Capitalization. The existence of this Option
shall not affect the Company's right to effect adjustments, recapitalizations,
reorganizations or other changes in its or any other corporation's capital
structure or business, any merger or consolidation, any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Shares, the dissolution or liquidation of the Company's or any other
corporation's assets or business, or any other corporate act, whether similar to
the events described above or otherwise. If the outstanding Shares of the
Company's Common Stock are increased or decreased in number or changed into or
exchanged for a different number or kind of securities of the Company or any
other corporation by reason of a recapitalization, reclassification, stock
split, reverse stock split, combination of shares, stock dividend or other
similar event, an appropriate adjustment of the number and kind of securities
with respect to which this Option may be exercised and the exercise price at
which this Option may be exercised will be made.
7. Dissolution, Liquidation and Merger.
7.1 Company Not The Survivor. In the event of a dissolution or liquidation
of the Company, a merger, consolidation, combination or reorganization in which
the Company is not the surviving corporation, or a sale of substantially all of
the assets of the Company (as determined in the sole discretion of the Board of
Directors), the Company, in its absolute discretion, may cancel each outstanding
Option upon payment in cash to the Optionee of the amount by which any cash and
the fair market value of any other property which the Optionee would have
received as consideration for the Shares of Common Stock covered by the Option
if the Option had been exercised before such liquidation, dissolution, merger,
consolidation or sale, exceeds the exercise price of the Option. In addition to
the foregoing, in the event of a dissolution or liquidation of the Company, or a
merger, consolidation, combination or reorganization, in which the Company is
not the surviving corporation, the Company, in its absolute discretion, may
accelerate the time within which each outstanding Option may be exercised.
7.2 Company is the Survivor. In the event of a merger, consolidation,
combination or reorganization in which the Company is the surviving corporation,
the Board of Directors shall determine the appropriate adjustment of the number
and kind of securities with respect to which outstanding Options may be
exercised, and the exercise price at which outstanding Options may be exercised.
The Board of Directors shall determine, in its sole and absolute discretion,
when the Company shall be deemed to survive for purposes of this Agreement.
8. Change of Control. If there is a change of control in the Company, all
outstanding Options shall fully vest immediately upon the Company's public
announcement of such a change. A "change of control" shall mean an event
involving one transaction or a related series of transactions, in which (i) the
Company issues securities equal to 25% or more of the Company's issued and
outstanding voting securities, determined as a single class, to any individual,
firm, partnership, limited liability company, or other entity, including a
"group" within the meaning of SEC Exchange Act Rule 13d-3, (ii) the Company
issues voting securities equal to 25% or more of the issued and outstanding
voting stock of the Company in connection with a merger, consolidation other
business combination, (iii) the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving
company, or (iv) all or substantially all of the Company's assets are sold or
transferred. See Section 7 with respect to Options vesting upon the occurrence
of either of the events described in (iii) or (iv) of this Section 8 and the
result upon the non-exercise of the Options.
9. Reservation of Shares. The Company agrees that prior to the earlier of the
expiration of this Option and the exercise and purchase of the total number of
Shares represented by this Option, there shall be reserved for issuance and
delivery upon exercise of this Option such number of the Company's authorized
and unissued Shares as shall be necessary to satisfy the terms and conditions of
this Agreement.
10. No Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Shares covered by this Option unless the
Optionee shall have exercised this Option, and then only with respect to the
Shares underlying the portion of the Option exercised. The Optionee shall have
no right to vote any Shares, or to receive distributions of dividends or any
assets or proceeds from the sale of Company assets upon liquidation until
Optionee has effectively exercised this Option and fully paid for such Shares.
Subject to Section 6, no adjustment shall be made for dividends or other rights
for which the record date is prior to the date title to the Shares has been
acquired by the Optionee.
11. No Rights to Employment or Continued Employment. The grant of this Option
shall in no way be construed so as to confer on Optionee the rights to
employment or continued employment by the Company. Nothing hereunder shall
confer upon any Optionee any right to employment or to continue in the employ of
the Company, or to interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to terminate or discharge any
Optionee at any time for any reason whatsoever, with or without cause.
12. Suspension and Termination. In the event the Board reasonably believes that
the Optionee has committed an act of misconduct specified below, the Company may
suspend the Optionee's right to exercise any Option pending final determination
by the Board, which final determination shall be made within five (5) business
days of such suspension. If the Board determines that an Optionee has committed
an act of embezzlement, fraud, breach of fiduciary duty, or deliberate disregard
of the Company rules resulting in loss, damage or injury to the Company, or if
an Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company,
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any Option hereunder. In making such determination, the
Board shall act fairly and in good faith and shall give the Optionee an
opportunity to appear and present evidence on the Optionee's behalf.
13. Participation in Company Option Plans. The grant of this Option shall not
prevent Optionee from participating or being granted options in the Company's
other plans; provided, however, that the Optionee meets the eligibility
requirements, and such participation or grant does not prevent the such plans
from meeting the requirements of the Internal Revenue Code of 1986, as amended.
14. Payment of Taxes. Upon the exercise of the Option, the Company shall have
the right to require the Optionee or such other person to pay by cash, or check
payable to the Company, the amount of any required withholding on applicable
federal, state, and local taxes and FICA with respect to such transactions. Any
such payment must be made promptly when the amount of such obligation becomes
determinable (the "Tax Date"). To the extent permissible under applicable tax,
securities and other laws, the Committee may, in its sole discretion and upon
such terms and conditions as it may deem appropriate, permit the Optionee to
satisfy his or her obligation to pay any such tax, in whole or in part, up to an
amount not greater than the employer's minimum statutory withholding based on
the minimum statutory withholding rates, by (a) directing the Company to apply
shares of Stock to which the Optionee is entitled as a result of the exercise of
this Option, or (b) delivering to the Company shares of Stock owned by the
Optionee. The shares of Stock so applied or delivered in satisfaction of the
Optionee's tax withholding obligation shall be valued at their Fair Market Value
as of the date of measurement of the amount of income subject to withholding.
15. Issue and Transfer Tax. The Company will pay all issuance taxes, if any,
attributable to the initial issuance of Shares upon the exercise of the Option;
provided, however, that the Company shall not be required in respect of any
transfer involved in the issue or delivery of any certificates for Shares in a
name other than that of the Optionee.
16. Arbitration. Any controversy, dispute or claim arising out of or relating
to this Option which cannot be amicably settled including, but not limited to,
the suspension or termination of Optionee's right in accordance with Section 11
above, shall be settled by arbitration. Said arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association at a time and place as selected by the arbitrator(s).
16.1.Initiation of Arbitration. After seven (7) days prior written notice
to the other, either party hereto may formally initiate arbitration under this
Agreement by filing a written request therefor, and paying the appropriate
filing fees, if any.
16.2.Hearing and Determination Dates. The hearing before the arbitrator
shall occur within thirty (30) days from the date the matter is submitted to
arbitration. Further, a determination by the arbitrator shall be made within
forty-five (45) days from the date the matter is submitted to arbitration.
Thereafter, the arbitrator shall have fifteen (15) days to provide the parties
with his or her decision in writing. However, any failure to meet the deadlines
in this section will not affect the validity of any decision or award.
16.3.Binding Nature of Decision. The decision of the arbitrator shall be
binding on the parties. Judgment thereon shall be entered in a court of
competent jurisdiction.
16.4.Injunctive Actions. Nothing herein contained shall bar the right of
either party to seek to obtain injunctive relief or other provisional remedies
against threatened or actual conduct that will cause loss or damages under the
usual equity rules including the applicable rules for obtaining
preliminary injunctions and other provisional remedies.
16.5.Costs. The cost of arbitration, including the fees of the arbitrator,
shall initially be borne equally by the parties; provided, the prevailing party
shall be entitled to recover such costs, in addition to attorneys' fees and
other costs, in accordance with Section 18 of this Agreement.
17. Notices. All notices to be given by either party to the other shall be in
writing and may be transmitted by personal delivery, facsimile transmission,
overnight courier or mail, registered or certified, postage prepaid with return
receipt requested; provided, however, that notices of change of address or telex
or facsimile number shall be effective only upon actual receipt by the other
party. Notices shall be delivered at the following addresses, unless changed as
provided for herein:
To the Optionee:
To the Company:
AremisSoft Corporation
000 Xxxxxx Xxxxxx, #000
Xxxxxxxx, XX 00000
Attn: Secretary
18. Applicable Law. This Option and the relationship of the parties in
connection with its subject matter shall be governed by, and construed under,
the laws of the state of Delaware.
19. Attorneys Fees. In the event of any litigation, arbitration or other
proceeding arising out of this Option, the prevailing party shall be entitled to
an award of costs, including an award of reasonable attorneys' fees. Any
judgment, order or award entered in any such proceeding shall designate a
specific sum as such an award of attorneys' fees and costs incurred. This
attorneys' fee provision is intended to be severable from the other provisions
of this Agreement, shall survive any judgment or order entered in any
proceeding, and shall not be deemed merged into any such judgment or order, so
that such further fees and costs as may be incurred in the enforcement of an
award or judgment or in defending it on appeal shall likewise be recoverable by
further order of a court or panel or in a separate action as may be appropriate.
20. Binding Effect. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, executors and
successors.
21. Tax Effect. The federal tax consequences of stock options are complex and
subject to change. Each person should consult with his or her tax advisor before
exercising any Option or disposing of any Shares acquired upon the exercise of
an Option.
IN WITNESS WHEREOF, this Option Agreement has been executed as of the date
first above written.
THE COMPANY: AREMISSOFT CORPORATION
Roys Poyiadjis,
Co-Chief Executive Officer
