EXHIBIT 4.12
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of February 28, 1997, by and between
Telular Corporation, a Delaware corporation (the "Company"), having its
principal place of business at Buffalo Grove, Illinois, and Xxxxx X. Xxxx
(the "Grantee").
WHEREAS, the Grantee is a Director of the Company; and
WHEREAS, the Company's Board of Directors has approved the
granting to the Grantee of a Nonqualified Stock Option (the "Option") to
purchase shares of common stock, par value $.01 per share, of the Company
(the "Shares") and the Company desires to evidence the grant of the Option
and to memorialize the terms and conditions of the Option;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the parties hereto, intending to be legally
bound, hereby agree as follows.
1. Grant of Option. The Company grants to the Grantee an option to
purchase up to 20,000 Shares, subject to the terms and conditions of this
Nonqualified Stock Option Agreement (the "Agreement"). This Agreement is
not intended to evidence the grant of an Incentive Stock Option within the
meaning of Section 422 of the Code.
2. Grant Date. The date of grant of the Option is February 28, 1997
(the Grant Date")
3. Option Exercise Price. The purchase price for each Share subject
to the Option shall be $6.250 (the "Option Exercise Price").
4. Option Term.
(a) Subject to this Section 4 and Section 5 below, the Option
shall become exercisable with respect to one-eighth (1/8) of the shares
covered by the Option on March 1, 1997, with respect to one-eighth (1/8) of
the Shares covered by the Option on June 1, 1997, with respect to one-
eighth (1/8) of the Shares covered by the Option on September 1, 1997, and
with respect to one-eighth (1/8) of the Shares covered by the Option on
December 1, 1997, with respect to one-eighth (1/8) of the Shares covered by
the Option on March 1, 1998, with respect to one-eighth (1/8) of the Shares
covered by the Option on June 1, 1998, and with respect to one-eighth (1/8)
of the Shares covered by the Option on September 1, 1998, and with respect
to one-eighth (1/8) of the Shares covered by the Option on December 1,
1998. The Grantee may purchase at any time less than the full number of
Shares for which the Option is then exercisable.
(b) The Option shall terminate, and shall no longer be
exercisable, six years after the Grant Date (if not sooner in accordance
with other provisions hereof).
(c) Except as provided in subsection (d) and only if the Option has not
been terminated on or prior to a Change in Control, upon a Change in Control
the Option shall become exercisable with respect to 50% of any Shares with
respect to which the Option was not exercisable immediately prior to the
Change in Control.
(d) If a Change in Control occurs prior to the expiration of six months
following the date of grant of the Option and the Grantee is a director or
officer (within the meaning of Section 16 of the 0000 Xxx) of the Company,
the Option shall not become exercisable with respect to any Shares upon the
Change in Control but shall become exercisable with respect to the Shares
specified in subsection (c) the day after the expiration of such six-month
waiting period unless the Option has terminated on or prior to the Change in
Control.
(e) If the Grantee's Directorship with the Company terminates after a
Change in Control but before the Option becomes exercisable pursuant to
subsection (d), the Option shall nonetheless become exercisable as provided
in subsection (d), shall remain exercisable for sixty days thereafter and
shall then terminate.
5. Termination of Directorship.
(a) Except as provided in Section 4 above, upon the Grantee's
termination of being a Director with the Company, the Option shall be
canceled with respect to any Shares with respect to which it was not
exercisable on the date of such termination.
(b) Upon the Grantee's termination of being a Director with the
Company because of death or Disability, the Option shall remain exercisable,
to the extent then exercisable, until the earlier of: (i) the expiration of
six months following the termination of Directorship; or (ii) the term of
the Option and shall terminate thereafter.
(c) Upon the Grantee's termination of being a Director with the
Company for fraud, misappropriation of Company property, falsification of
reports to the Company or other instances of serious willful misconduct
related to the Grantee's Director position ("Cause"), the Option shall be
canceled immediately.
(d) Upon a Grantee's termination of being a Director with the
Company for any reason other than Cause, death or Disability, the Option
shall remain exercisable, to the extent then exercisable, to the extent then
exercisable, until the earlier of: (i) the expiration of 180 days following
the termination of Directorship; or (ii) the term of the Option and shall
terminate thereafter.
(e) After the Grantee's death, the Option may be exercised only by
the Grantee's Beneficiary; provided, however, that if the Grantee's
Beneficiary dies during the term of the Option, the executor or
administrator of the Beneficiary's estate may exercise the Option. If the
Grantee and the Grantee's Beneficiary die in circumstances in which there is
no sufficient evidence that the two have died otherwise than simultaneously,
the Beneficiary shall be deemed to have predeceased the Grantee.
4. Exercise and Withholding.
(a) The Grantee may exercise the Option in respect of Shares by
giving written notice thereof to the Company. Such notice shall specify the
number of Shares to be purchased and shall be accompanied by full payment
for the Shares to be purchased and by such agreement, statement, or other
evidence as the Company may require in order to satisfy itself that the
issuance of the Shares being purchased pursuant to such exercise and any
subsequent resale thereof will be in compliance with applicable laws and
regulations relating to the issuance and sale of securities, including the
provisions of the Securities Act of 1933 and regulations promulgated
thereunder.
(b) Upon exercise of the Option, in whole or in part, the Company
shall notify the Grantee of the amount of withholding tax, if any, that must
be paid under federal, state and/or local law by reason of such exercise.
It shall be a condition to the delivery of Shares hereunder that provision
satisfactory to the Company shall have been made for payment of any taxes
required to be paid or withheld pursuant to any applicable law or
regulations. The Company shall, to the extent permitted by law, have the
right to deduct from any payment of any kind (whether or not related to this
Agreement) otherwise due to the Grantee any such taxes required to be
withheld.
(c) The Grantee may pay the Option Exercise Price and any
withholding obligation by money order, cashier's check or certified check.
Any withholding tax obligation shall be valued at their Fair Market Value on
the date of exercise. The exercise of the Option shall be deemed to occur
on the date that the notice of exercise and the payment of the Option
Exercise Price are received by the Company, or if such notice of exercise
and payment are mailed in the United States and a reputable overnight
delivery service has stamped its postmark thereon, then on the date of such
postmark.
(d) As a condition to receiving Shares purchased upon exercise of
the Option, the Grantee shall satisfy in cash any debts owed to the Company
by the Grantee and to compensate the Company in cash for any losses suffered
by the Company arising out of the Grantee's fraud. If the Grantee fails to
fulfill these obligations, the Company may require the Grantee to return to
the Company all Shares received upon exercise of the Option.
(e) As soon as practicable after each exercise of the Option and
compliance by the Grantee with all applicable conditions, the Company shall
mail or deliver or cause to be mailed or delivered to the Grantee a stock
certificate or certificates registered in the name of the Grantee for the
number of Shares that the Grantee shall be entitled to receive upon such
exercise under the provisions of this Agreement. At the request of the
Grantee, the stock certificate or certificates may be issued in the
Grantee's name and the name of another person as joint tenants with right of
survivorship.
7. Recapitalizations, etc. If, prior to the Grantee's receipt of the
shares of Telular stock, the Company effects a subdivision or consolidation
of interest, stock split, dividend or distribution of shares of Telular
stock or other securities of the Company, or other recapitalization, capital
readjustment or reorganization, the shares of Telular stock subject to these
Options under this Agreement and the applicable option exercise price for
such Option shall be adjusted as follows.
(a) after each such event the number of shares of Telular stock
that the Grantee is entitled to receive with respect to any Option will be
equal to the number of shares of Telular stock that the Grantee would hold
by reason if (i) the exercise of such Option immediately prior to the record
date for such event and (ii) the effect of such event upon the shares of
Telular stock received upon such exercise, subject to further adjustment
pursuant to the Section 8 for subsequent events if applicable; and
(b) the applicable option exercise price shall be adjusted ratably
in proportion to any adjustment in the number of shares of Telular stock to
be issued with respect to any Option.
8. Mergers, etc. If one or more corporations or partnerships merge
into the Company, or if the Company merges or consolidates with one or more
corporations or partnerships, the Company shall cause the surviving entity
to assume the Company's obligations under this Agreement, and shares of
Telular stock subject to these Options under this Agreement and the
applicable option exercise price for such Options shall be adjusted as
follows:
(a) after each such event, the number and nature of securities of
the surviving entity that the Grantee is entitled to receive with respect to
any Option will be equal to the number and nature of such securities that
the Grantee would hold by reason of (i) the exercise of such Option
immediately prior to the record date for such event and (ii) the effect of
such event upon the securities to be received upon such exercise, subject to
further adjustment pursuant to Section 7 for subsequent events if
applicable; and
(b) the applicable Option exercise price shall be adjusted ratably
in proportion to any adjustment in the number or nature of any securities to
be issued with respect to any Option.
9. Status as Shareholder. The Grantee shall not for any purpose be
deemed to be a holder of any Shares until such Shares are issued or
delivered to the Grantee.
10. Choice of Law. This Agreement shall be governed by the laws of
the State of Illinois, without regard to the conflict of law provisions
thereof. Any action to enforce or interpret this Agreement shall be triable
only in courts whose situs is in Xxxx County, Illinois.
11. Representations and Warranties.
(a) The Company represents and warrants to the Grantee that the
Option has been duly and validly authorized and issued by the Company and
that the Shares, when issued in accordance herewith upon payment of the
Option Exercise Price specified herein, will be duly and validly issued,
fully paid and nonassessable.
(b) The Grantee represents and warrants to the Company that he is
acquiring the Option and any Shares pursuant to the Option solely for
investment and without a view to distribution, and that he is aware that
neither the Shares nor the Option has been registered for sale under the
Securities Act of 1933 or any applicable state law and may not be resold
except pursuant to an effective registration statement thereunder or an
exemption from the registration requirements thereof.
12. Legend. The Company may place on the certificates representing
any Shares issued pursuant to the Option a legend indicating that such
Shares may not be resold except pursuant to an effective registration
statement thereunder or an exemption from the registration requirements
thereof.
13. Miscellaneous.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs,
successors and assigns; provided, however, that the Grantee may not
transfer the Option other than by will or the laws of descent. Any
notices to be given hereunder shall be effective only if in writing and
shall be deemed given when delivered in person or when sent by
reputable overnight delivery service to the following addresses:
If to the Company:
Telular Corporation
000 Xxxxxxxxx Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
If to the Grantee:
Xxxxx X. Xxxx
_______________________
_______________________
or to such other address as such party may indicate by notice to the other.
This Agreement may be executed in any number of counterparts, all of which
shall constitute a single instrument.
(b) Whenever the word "Grantee" is used herein in a context where
the provision should logically be construed to apply to the Grantee's
Beneficiary, the word "Grantee" shall be deemed to include such Beneficiary
(c) The Option shall not be exercisable and no certificates
representing Shares subject to the Option shall be delivered if, at any
time, the Company determines, in its discretion, that it is necessary as a
condition of, or in connection with, such exercise (or the delivery of
Shares thereunder):
(i) to satisfy withholding tax or other withholding
liabilities;
(ii) to effect the listing, registration or qualification on
any securities exchange, or any quotation system, or under any
federal, state or local law, of any Company Shares otherwise
deliverable in connection with such exercise; or
(iii) to obtain the consent or approval of any regulatory
body; unless such withholding, listing, registration,
qualification, compliance, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Company in its reasonable and good faith judgment.
The Company shall act with all reasonable diligence to obtain any
such approval or consent and to effect compliance with any such
applicable law, regulation, order, withholding, or listing,
registration or qualification requirement, and the Grantee or
other person entitled to exercise the Option shall take any action
reasonably requested by the Company in such connection.
IN WITNESS WHEREOF, the undersigned have set their hands as
of the day and year first above written.
TELULAR CORPORATION
By:________________________________
Xxxxxxx X. Xxxxxxx
President & Chief Executive Officer
Grantee
____________________________________
