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EXHIBIT 10.1
WAVEPHORE, INC.
NON QUALIFIED STOCK OPTION AGREEMENT
This OPTION AGREEMENT is made this 12th day of October, 1998, between
WavePhore, Inc., an Indiana corporation (the "Company"), 0000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, XX 00000, and Xxxxx X. Xxxxx ("the Optionee"), 0000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, XX 00000.
In consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, the parties hereto agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee, subject
to the terms and conditions hereinafter set forth, the right and option to
purchase from the Company all or any part of an aggregate of 445,000 of the
Company's Common Shares (the "Common Shares") at the purchase price of $4.125
per share (the "Shares"), such option to be exercised as hereinafter provided.
The option (the "Option") is not intended to be, and will not be treated as, an
Incentive Stock Option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended. The number of Shares with respect to which the Option
is exercisable, and the purchase price with respect to each Share to be acquired
pursuant to the exercise of the Option herein granted, each are subject to
adjustment under certain circumstances as more fully set forth in Section 6
hereof. The term "Common Shares" as used herein shall include any other class of
stock or other securities resulting from any such adjustment.
2. EXERCISE OF OPTION. The Option herein granted shall be exercisable
as to all 445,000 shares commencing on October 12, 1998, and, to the extent that
it has not theretofore been exercised, shall expire at 11:59 P.M., Mountain
Time, on October 11, 2008.
3. OPTION EXERCISE. The Option granted hereunder, to the extent then
exercisable, may be exercised in whole or in any part, and may be exercised in
part from time to time, all subject to the limitations on exercise set forth
herein provided that no partial exercise of the Option shall be for an aggregate
exercise price of less than $1,000 unless such partial exercise is for the last
remaining unexercised portion of the Option. The partial exercise of the Option
shall not cause the expiration, termination or cancellation of the remaining
portion thereof. The Option may be exercised by delivering written notice, in
the form attached hereto, to the principal office of the Company, to the
attention of its Secretary, no less than one business day in advance of the
effective date of the proposed exercise. Such notice shall be accompanied by
this Option Agreement and shall specify the number of Common Shares with respect
to which the Option is being exercised and the effective date of the proposed
exercise, and shall be signed by the Optionee. The Optionee may withdraw such
notice at any time prior to the close of business on the business day
immediately preceding the effective date of the proposed exercise, in which case
this Option Agreement shall be returned to the Optionee.
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4. PAYMENT OF THE PURCHASE PRICE. Payment for Common Shares to be
purchased upon the exercise of the Option shall be made on the effective date of
such exercise either (i) in cash, by certified check, bank cashier's check or
wire transfer, or (ii) subject to the approval of the Company's Board of
Directors (the "Board"), in Common Shares owned by the Optionee and valued at
their Fair Market Value on the effective date of such exercise (determined in
accordance with the method for establishing Fair Market Value as set forth
below), or partly in Common Shares with the balance in cash, by certified check,
bank cashier's check or wire transfer. Any payment in Common Shares shall be
effected by the delivery of such Shares to the Secretary of the Company, duly
endorsed in blank or accompanied by stock powers duly executed in blank,
together with any other documents and evidences as the Secretary of the Company
shall require from time to time.
The "Fair Market Value of Common Shares with respect to any day shall
be (i) the closing sale price on the immediately preceding business day of
Common Shares as reported on the principal securities exchange on which Common
shares are then listed or admitted to trading, or (ii) if not so reported, the
average of the closing bid and ask prices on the immediately preceding business
day as reported on the National Association of Securities Dealers Automated
Quotation System, or (iii) if not so reported, as furnished by any member of the
National Association of Securities Dealers, Inc. selected by the Board. In the
event that the price of Common Shares shall not be so reported, the Fair Market
Value of Common Shares shall be determined by the Board in its absolute
discretion.
Provided that the Common Shares to be purchased upon exercise of the
Option may be sold in compliance with applicable securities laws, the Option may
be exercised by a broker-dealer acting on behalf of the Optionee if (i) the
broker-dealer has received from the Optionee or the Company a
fully-and-duly-endorsed agreement evidencing the Option and instructions signed
by the Optionee requesting that the Company deliver the Common Shares subject to
the Option to the broker-dealer on behalf of the Optionee and specifying the
account into which such Shares should be deposited, (ii) adequate provision has
been made with respect to the payment of any withholding taxes due upon such
exercise and (iii) the broker-dealer and the Optionee have otherwise complied
with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220.
Certificates for Common Shares purchased upon the exercise of the
Option shall be issued in the name of the Optionee and delivered to the Optionee
as soon as practicable following the effective date on which the Option is
exercised.
5. EFFECT OF TERMINATION AS EMPLOYEE. This Option shall not be subject
to termination in the event that the Optionee's employment by the Company shall
terminate.
6. ADJUSTMENTS AND CORPORATE REORGANIZATIONS If the Company's Common
Shares subject to this Option are increased or decreased, or changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more reorganizations, recapitalizations, stock splits, reverse stock
splits, stock dividends or the like, appropriate adjustments shall be made in
the number and/or kind of shares or securities for which the unexercised
portions of this Option may thereafter be exercised, all without any change in
the aggregate exercise price applicable to the unexercised portions of this
Option, but with a corresponding adjustment in the exercise price per share or
other unit. No fractional share of
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stock shall be issued under this Option or in connection with any such
adjustment. Such adjustment shall be made by or under the authority of the
Company's Board of Directors whose determinations as to what adjustments shall
be made, and the extent thereof, shall be final, binding and conclusive.
7. INVESTMENT REPRESENTATIONS. The Optionee hereby represents, agrees
and warrants to the Company that unless a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), is in effect as to
shares purchased upon any exercise of the Option:
(a) Any and all Shares so purchased shall be acquired for the
Optionee's personal account for investment only, and not with a view
to, or for sale in connection with, any distribution of the Shares in
violation of the Securities Act, any rule or regulation under the
Securities Act, or any applicable state securities law.
(b) The Optionee has had such opportunity as the Optionee has
deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Optionee to evaluate the
merits and risks of his investment in the Company.
(c) The Optionee is able to bear the economic risk of holding
any Shares acquired pursuant to the exercise of the Option for an
indefinite period.
Upon each exercise of the Option, the Optionee shall be deemed to have
reaffirmed, as of the date of such exercise, the representations made in this
Section 7.
8. SECURITIES LAW MATTERS. As soon as practicable, Company shall
register pursuant to the Securities Act all Shares which may be issued pursuant
the Option and to effect similar compliance under any state securities laws.
Notwithstanding anything to the contrary, the Company shall not be obligated to
cause to be issued or delivered any certificates evidencing the Shares purchased
pursuant to the Option unless and until the Company is advised by its counsel
that the issuance and delivery of such certificates is in compliance with, and
will not cause the Company to incur any liability under, any applicable federal,
state or other laws, any other requirement of law, regulation of governmental
authority or of any regulatory body having jurisdiction over the Company, and
the requirements of any securities exchange on which the Common Shares are
traded. The Company may, in its sole discretion, defer the effectiveness of any
exercise of the Option in order to allow the issuance of Common Shares pursuant
to the Option to be made pursuant to registration or an exemption from the
registration or other methods for compliance available under federal or state
securities laws. The Company shall inform the Optionee in writing of its
decision to defer the effectiveness of the exercise of the Option. During the
period that the effectiveness of the exercise of the Option has been deferred,
the Optionee may, by written notice, withdraw such exercise and obtain the
refund of any amount paid with respect thereto.
9. WITHHOLDING TAXES. The Company's obligation to deliver Shares upon
exercise of the Option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local tax withholding requirements.
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At the election of the Optionee, and subject to the approval of the
Board, when Common Shares are to be issued upon the exercise of the Option, in
lieu of the cash remittance required hereby, the Optionee may (i) tender to the
Company a number of Common Shares determined by the Optionee, the Fair Market
Value of which at the tender date the Board determines to be sufficient to
satisfy the federal, state and local withholding tax requirements, if any,
attributable to such exercise and is not greater than the Optionee's estimated
total federal, state and local tax obligations associated with such exercise; or
(ii) request that the Company withhold a number of such Common Shares determined
by the Optionee, the Fair Market Value of which at the exercise date the Board
determines to be sufficient to satisfy the federal, state and local withholding
tax requirements, if any, attributable to such exercise and is not greater than
the Optionee's estimated total federal, state and local tax obligations
associated with such exercise.
10. LEGEND ON STOCK CERTIFICATE. Unless a registration statement under
the Securities Act is in effect as to shares purchased upon any exercise of the
Option, all stock certificates representing Common Shares issued to the Optionee
upon exercise of the Option shall have affixed thereto a legend substantially in
the following form, in addition to any other legend required by applicable law
or deemed necessary or advisable by the Company:
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
and may not be transferred, sold or otherwise disposed of in
the absence of an effective registration statement with
respect to the shares evidenced by this certificate, or an
opinion of counsel satisfactory to the Company to the effect
that registration under such Act is not required."
11. NONTRANSFERABILITY. Unless the Board provides otherwise, (i) no
right or interest of Optionee in the Option may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or a Subsidiary,
or shall be subject to any lien, obligation, or liability of Optionee to any
other party other than the Company or a Subsidiary, and (ii) the Option shall
not be assignable or transferable by Optionee other than by will or the laws of
descent and distribution.
12. RIGHTS OF SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to any Shares subject to the Option until the date of
the issuance of a stock certificate with respect to such Shares. Except as
otherwise expressly provided herein, no adjustment to the Option shall be made
for dividends or other rights for which the record date occurs prior to the date
such stock certificate is issued.
13. NO SPECIAL RIGHTS CREATED. Nothing contained in the Option or the
Plan shall confer upon the Optionee any right with respect to the continuation
of his status as an employee of the Company.
14. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or by
registered or certified mail, or
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facsimile, addressed to a party at the address set forth herein or at such other
address as such party may designate by notice in accordance with this paragraph.
15. GOVERNING LAW. This Option Agreement has been executed and
delivered by the Company in the State of Arizona and shall be construed and
enforced in accordance with the laws of such State.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officer, and the Optionee has executed this
Agreement, both as of the day and year first above written.
OPTIONEE: WAVEPHORE, INC.
___________________________ By: _______________________________
Xxxxx X. Xxxxx R. Xxxxx Xxxxxxxxxx,
Executive Vice President and
Chief Operating Officer
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OPTION EXERCISE FORM
TO: WAVEPHORE, INC.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx
Attention: Secretary
RE: Notice of Intention to Exercise Option
I am the Optionee under the Non Qualified Stock Option Agreement (the
"Agreement") entered into with WavePhore, Inc. (the "Company"), dated October
12, 1998. Pursuant to such Agreement, I hereby provide you with official notice
that I elect to exercise my Option to purchase the Company's Common Shares as
follows:
Number of Shares: ________________________________________
Effective Date of Exercise: ______________________________
I understand that payment for the Common Shares to be purchased by me
pursuant to the exercise of the Option must be made on the effective date of
exercise in accordance with the Agreement. I further understand and agree that
the Company shall have the right to require me to remit to the Company in cash
an amount sufficient to satisfy federal, state and local withholding tax
requirements, if any, attributable to my exercise of the Option prior to the
delivery of any certificate or certificates for such Shares.
I understand that this election to exercise the Option is irrevocable
once it is effective in accordance with the terms and conditions of the Plan.
The certificate for the Shares should be delivered to me at the address
listed below:
NAME OF OPTIONEE:
_______________________________________________________________________________
Please typewrite or print
ADDRESS:
_______________________________________________________________________________
_______________________________________________________________________________
SOCIAL SECURITY NUMBER:
_______________________________________________________________________________
DATED:______________, 19__ __________________________________
Signature of Optionee
