EXHIBIT 4.4
SCANSOFT, INC.
STAND-ALONE STOCK OPTION AGREEMENT (A)
I. NOTICE OF STOCK OPTION GRANT
You, Xxxxxxx X. Xxxxxx (the "Optionee"), have been granted a
Nonstatutory Stock Option to purchase Common Stock of the Company, subject to
the terms and conditions of this Agreement, as follows:
Date of Agreement/Grant October 28, 1999
Exercise Price per Share $1.7200
Total Number of Shares
Purchasable Under this Option: 10,000
Total Exercise Price $17,200.00
Term/Expiration Date: October 28, 2009
Vesting Schedule:
This Option shall vest and become exercisable with respect to the
number of Shares of Common Stock, and on the scheduled vesting dates as set
forth below, provided that the Optionee continues to be a Service Provider on
such date:
100% of the Shares subject to the Option shall vest on October 9, 2002.
Termination Period:
This Option may be exercised for 12 MONTHS after Optionee terminates
his employment for reasons other than for death or disability. Upon the death or
Disability of the Optionee, 50% of the then outstanding unvested options
immediately prior to this termination of employment covered hereunder will
accelerate and will be exercisable for a period of 12 MONTHS after Optionee
ceases to be a Service Provider. In no event shall this Option be exercised
later than the Term/Expiration Date as provided above.
II. AGREEMENT
A. Definitions. As used herein, the following definitions shall apply:
1. "Administrator" means the Board or any of
its Committee of the Board that has been designated to
administer this Agreement, in accordance with Section H below.
2. "Agreement" means this stock option
agreement between the Company and Optionee evidencing the
terms and conditions of this Option.
3. "Applicable Laws" means the requirements
relating to the administration of stock options under U. S.
state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction that may apply to this
Option.
4. "Board" means the Board of Directors of the
Company.
5. "Code" means the Internal Revenue Code of
1986, as amended.
6. "Common Stock" means the common stock of the
Company.
7. "Company" means ScanSoft, Inc. a Delaware
corporation.
8. "Consultant" means a person, including an
advisor, engaged by the Company or a Parent or Subsidiary to
render services to such entity.
9. "Director" means a member of the Board.
10. "Disability" means total and permanent
disability as defined in Section 22(e)(3) of the Code.
11. "Employee" means an employee of the Company
or any Parent or Subsidiary of the Company. A Service Provider
shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent,
any Subsidiary of the Company, or any successor.
12. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
13. "Exercise Price" means the price at which a
Share may be purchased by the Optionee pursuant to the
exercise of this Option, which is the Fair Market Value per
Share on the date of this Agreement.
14. "Fair Market Value" means, as of any date,
the value of Common Stock determined as follows:
(1) 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
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system for the market trading day on the
time of determination, as reported in
The Wall Street Journal or such other
source as the Administrator deems
reliable;
(2) If the Common Stock is regularly quoted
by a recognized securities dealer but
selling prices are not reported, the
Fair Market Value of a Share of Common
Stock shall be the mean between the high
bid and low asked prices for the Common
Stock on the day of determination, as
reported in The Wall Street Journal or
such other source as the Administrator
deems reliable; or
(3) In the absence of an established market
for the Common Stock, the Fair Market
Value shall be determined in good faith
by the Administrator.
15. "Nonstatutory Stock Option" means a stock
option to purchase Shares that is not intended to qualify as
an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.
16. "Notice of Grant" means the written notice
set forth in Part I of this Agreement, which evidences certain
terms and conditions of this Option grant. The Notice of Grant
is part of the Agreement.
17. "Officer" means a person who is an officer
of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated
thereunder.
18. "Option" means this Nonstatutory Stock
Option.
19. "Optioned Stock" means the Common Stock
subject to this Option.
20. "Optionee" means Xxxxxxx X. Xxxxxx or his
successor.
21. "Parent" means a "parent corporation,"
whether now or hereafter existing, as defined in Section
424(e) of the Code.
22. "Service Provider" means an Employee,
Director or Consultant.
23. "Share" means a share of Common Stock, as
adjusted in accordance with Section G of this Agreement.
24. "Subsidiary" means a "subsidiary
corporation", whether now or hereafter existing, as defined in
Section 424(f) of the Code.
X. Xxxxx of Option.
The Board hereby grants to the Optionee the option to purchase, on the
terms and conditions set forth in this Agreement, all or any part of the total
number of Shares set forth in the Notice of
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Grant, at the Exercise Price set forth in the Notice of Grant. The Shares may
be authorized, but unissued or reacquired Shares.
C. Exercise of Option.
(a) Right to Exercise. This Option is
exercisable during its term in accordance with the Vesting
Schedule set forth in the Notice of Grant and the applicable
provisions of this Option Agreement.
(b) Method of Exercise. This Option is
exercisable by delivery of an exercise notice, in the form
attached as Exhibit A (the "Exercise Notice"), which shall
state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and
agreements as may be required by the Company. The Exercise
Notice shall be completed by the Optionee and delivered to the
Stock Plan Administrator of the Company. The Exercise Notice
shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Stock Plan Administrator
of the Company of such fully executed Exercise Notice
accompanied by such aggregate Exercise Price (and the amount
of any income or employment tax the Company is required by law
to withhold by reason of such exercise).
(c) Notwithstanding the foregoing, no Shares
shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with Applicable Laws.
Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the
Optionee on the date the Option is exercised with respect to
such Exercised Shares.
D. Method of Payment.
Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:
(a) cash or check; or
(b) consideration received by the
Company under a cashless exercise program implemented
by the Company in connection with this Agreement; or
(c) surrender of other Shares which (i)
in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than
six (6) months on the date of surrender, and (ii)
have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the
Exercised Shares.
E. Non-Transferability of Option.
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This Option may not be transferred in any manner otherwise than by will
or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms this Option Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.
F. Termination of Relationship as a Service Provider/Disability of
Optionee/Death of Optionee.
This Option may be exercised for 12 MONTHS after Optionee terminates
his employment for reasons other than for death or disability. Upon the death or
Disability of the Optionee, 50% of the then outstanding unvested options
immediately prior to this termination of employment covered hereunder will
accelerate and will be exercisable for a period of 12 MONTHS after Optionee
ceases to be a Service Provider. In no event shall this Option be exercised
later than the Term/Expiration Date as provided above.
G. Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.
(a) Changes in Capitalization. Subject to
any required action by the stockholders
of the Company, the number of Shares of
the Optioned Stock, as well as the
Exercise Price of the Optioned Stock,
shall be proportionately adjusted for
any increase or decrease in the number
of issued Shares 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 effected without
receipt of consideration by the Company;
provided, however, that a conversion of
the 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 of
Shares of the Optioned Stock or the
Exercise price of the Optioned Stock.
(b) Dissolution or Liquidation. In the event
of the proposed dissolution or
liquidation of the Company, the Board
shall notify the Optionee as soon as
practicable prior to the effective date
of such proposed transaction. The Board,
in its discretion, may provide for the
Optionee to have the right to exercise
his Option until ten (10) days prior to
such transaction as to all of the
Optioned Stock covered thereby,
including Shares as to which the Option
would not otherwise be exercisable. To
the extent it has not been previously
exercised, the Option will terminate
immediately prior to the consummation of
such proposed.
(c) Merger or Asset Sale. In the event of a
merger of the Company with or into
another Corporation, or the sale of
substantially all of the assets of the
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Company, the Option shall be assumed or
an equivalent option substituted by the
successor corporation or a Parent or
Subsidiary of the successor corporation.
In the event that the successor
corporation refuses to assume or
substitute for the Option, the Optionee
shall fully vest in and have the right
to exercise the Option as to all of the
Optioned Stock, including Shares as to
which it would not otherwise be vested
or exercisable. If the Option becomes
fully vested and exercisable in lieu of
assumption or substitution in the event
of a merger or sale of assets, the Board
shall notify the Optionee that the
Option shall be fully exercisable for a
period of fifteen (15) days from the
date of such notice, and the Option
shall be considered assumed if,
following the merger or sale of assets,
the option confers the right to purchase
or receive for each Share of Optioned
Stock subject to the Option immediately
prior to the merger or sales of assets,
the consideration (whether stock, cash,
or other securities or property)
received in the merger or sale of assets
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 of the outstanding Shares);
provided, however, that if such
consideration received in the merger or
sales of assets is not solely common
stock of the successor corporation or
its Parent, the Administrator may, with
the consent of the successor
corporation, provide for the
consideration to be received upon the
exercise of the Option, for each Share
of Optioned Stock 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 merger or
sale of assets.
H. Administration of the Agreement.
The Board shall have the authority, in its discretion, to construe and
interpret the terms of this Agreement and the Option granted pursuant thereto,
to prescribe, amend and rescind rules and regulations relating to the Agreement,
to determine the Fair Market Value of the Common Stock, and to make all other
determinations deemed necessary or advisable for administering the Agreement.
The Board's decisions, determinations and interpretations shall be final and
binding on the Optionee and all other persons.
I. Notices.
Any notice to be given to the Company hereunder shall be in writing and
shall be addressed to the Company at its then current principal executive office
or to such other address as the Company may hereafter designate to the Optionee
by notice as provided in this Section. Any notice to be given to the Optionee
hereunder shall be addressed to the Optionee at the address set forth beneath
his signature hereto, or at such other address as the Optionee may hereafter
designate to the Company by notice as provided herein. A notice shall be deemed
to have been duly given when personally delivered or mailed by registered or
certified mail to the party entitled to receive it.
J. Withholding Taxes.
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The Optionee agrees to make appropriate arrangements with the Company
(or the Parent or Subsidiary of the Company employing or retaining the Optionee)
for the satisfaction of all federal, state, and local income and employment tax
withholding requirements applicable to the Option exercise. The Optionee
acknowledges and agrees that the Company may refuse to honor the exercise and
refuse to deliver Shares if such withholding amounts are not delivered a the
time of exercise.
K. Entire Agreement; Governing Law.
This Option Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Company and Optionee with respect to
the subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee. This
agreement is governed by the internal substantive laws, but not the choice of
law rules, of Delaware.
NO GUARANTEE OF CONTINUED SERVICE
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT
OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE
PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of this Option Agreement. Optionee has reviewed this
Option Agreement in its entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement and fully understands all
provisions of the Option Agreement. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions relating to the Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.
OPTIONEE: SCANSOFT, INC.
______________________________ _________________________________
Signature By
Chairman
______________________________ _________________________________
Xxxxxxx X. Xxxxxx Title
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_____________________________
Residence Address
_____________________________
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EXHIBIT A
SCANSOFT, INC.
STAND-ALONE STOCK OPTION AGREEMENT (A)
EXERCISE NOTICE
ScanSoft, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Stock Plan Administrator
1. Exercise of Option. Effective as of today, ________________,
_____, the undersigned ("Purchaser") hereby elects to purchase ______________
shares (the "Shares") of the Common Stock of ScanSoft, Inc. (the "Company")
under and pursuant to the Stand-Alone Stock Option Agreement (A), dated October
28, 1999 (the "Option Agreement").. The purchase price for the Shares shall be
$1.7200 as set forth in Part I of the Option Agreement.
2. Delivery of Payment. The Purchaser herewith delivers to the
Company the full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Part II Section G
of the Agreement.
5. Tax Consultation. The Purchaser hereby acknowledges and
confirms that he understands the he may suffer adverse tax consequences as a
result of his purchase or disposition of the Shares. The Purchaser hereby
represents that he has consulted with any tax consultants he deems advisable in
connection with the purchase or disposition of the Shares and that he is not
relying on the Company for any tax advice.
6. Interpretation. Any dispute regarding the interpretation of
this Exercise Notice shall be submitted by the Purchaser or by the Company
forthwith to the Board (as defined in the Option Agreement). The resolution of
such a dispute by the Board shall be final and binding on all parties.
6. Entire Agreement; Governing Law. The Option Agreement is
incorporated herein by reference. This Exercise Notice and the Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Delaware.
Submitted by: Accepted by:
PURCHASER: SCANSOFT, INC.
___________________________ ___________________________
Signature By
___________________________ ___________________________
Print Name Its
Address: Address:
___________________________ SCANSOFT, INC.
___________________________
___________________________
Date Received
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