TECHTEAM GLOBAL, INC. OPTION AGREEMENT
Exhibit 10.26
TECHTEAM GLOBAL, INC.
OPTION AGREEMENT
OPTION AGREEMENT
THIS AGREEMENT is entered into by and between TechTeam Global, Inc., a Delaware corporation
(the “Company”), and Xxxx X. Xxxxxxxx (the “Executive”), effective as of February 11, 2008
(“Effective Date”).
WHEREAS, on February 11, 2008, the Company and the Executive entered into that certain
Employment and Noncompetition Agreement (the “Employment Agreement”);
WHEREAS, pursuant to Section 2(b)(ii)(a), the Company granted the Executive a stock option to
purchase 300,000 shares of the Company’s common stock, subject to the terms and conditions set
forth in the Employment Agreement and the Company’s 2006 Incentive Stock and Awards Plan; and
WHEREAS, the Company and the Executive desire to further memorialize the terms and conditions
of such equity awards in this Agreement.
ARTICLE I. DEFINITIONS
Section 1.1. Definitions. Capitalized terms used in this Agreement
have the following meanings:
(a) “Board” means the Board of Directors of the Company.
(b) “Cause” shall have the meaning ascribed in Section 3(c) of the Employment
Agreement.
(c) “Committee” means the Compensation Committee of the Board (or such successor
committee with the same or similar authority).
(d) “Company” means TechTeam Global, Inc., a Delaware corporation, or any
successor thereto.
(e) “Disability” shall have the meaning ascribed in Section 3(b) of the
Employment Agreement.
(f) “Good Reason” shall have the meaning ascribed in Section 3(e) of the
Employment Agreement.
(g) “Plan” means the Techteam Global, Inc. 2006 Incentive Stock and Awards Plan,
as it may be amended from time to time, or any successor plan thereto.
(h) “Share” means a share of common stock of the Company.
Section 1.2. Other Defined Terms. Capitalized terms used herein but
not defined shall have the meaning ascribed to such terms in the Plan.
ARTICLE II. AWARD OF STOCK OPTIONS
Section 2.1. Grant. The Executive is hereby granted an option (the
“Option”) to purchase 300,000 Shares (the “Option Shares”). The Option is a
non-qualified stock option.
Section 2.2. Exercise Price per Share. The Exercise Price is $7.99.
“Exercise Price” means the price per Share to be paid by the Executive to exercise the
Option.
Section 2.3. Termination Date. The Option shall terminate upon the
earlier to occur of the close of business at the Company’s headquarters on the tenth
(10th) anniversary of the Effective Date or twelve (12) months after the Executive’s
employment with the Company is terminated.
Section 2.4. Vesting Schedule. The Option shall vest in 16 equal
installments at the end of each calendar quarter, beginning with the calendar quarter
ending March 31, 2008. Notwithstanding the foregoing, in the event the Executive’s
employment is terminated by the Company without Cause or the Executive resigns for
Good Reason, the portion of the Option that is scheduled to vest within one (1) year
after the date of such termination shall vest immediately. In the event the
Executive’s employment is terminated by reason of death or Disability, the Option
shall vest in full on the date of such termination. The portion of the Option that is
not vested as of the date of the Executive’s termination of employment from the
Company shall be forfeited immediately on the date of such termination.
Section 2.5. Manner of Exercise. The Executive may exercise the
Option, to the extent vested, at any time prior to the date the Option expires or
terminates. To exercise the Option, the Executive must provide a properly completed
Notice of Exercise Form to the Assistant Controller of Company, specifying how many
Option Shares the Executive wishes to purchase. If someone else wants to exercise the
Option after the Executive’s death, that person must contact the General Counsel of
the Company and prove to the Company’s satisfaction that he or she is entitled to do
so. The Executive’s ability to exercise the Option may be restricted by the Company
if required by applicable law.
Section 2.6. Transferability of Option. The Executive may not transfer
or assign the Option for any reason, other than under the Executive’s will or as
required by intestate laws. Any attempted transfer or assignment will be null and
void.
Section 2.7. Repricing Prohibited. Notwithstanding anything in this
Agreement to the contrary, and except for the adjustments provided in Section 3.4,
neither the Committee nor any other person may decrease the exercise price for the
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Option after the Effective Date nor allow the Executive to surrender the Option
to the Company as consideration for the grant of a new option with a lower exercise
price.
Section 2.8. Rights as a Shareholder. The Executive (or any other
individual with an interest in the Option) shall have no rights as a shareholder of
the Company with respect to the Shares subject to the Option unless and until such
individual exercises the Option and is issued the Shares purchased thereby. No
adjustments shall be made for distributions, allocations, or other rights with respect
to any Shares prior to the exercise of the Option except as permitted by Section 3.4.
ARTICLE III. GENERAL TERMS AND CONDITIONS
Section 3.1. Restrictions on Transfer. By accepting this Agreement,
the Executive agree not to sell any Shares acquired under this Agreement at a time
when applicable laws, Company policies (including without limitation, the Company’s
Xxxxxxx Xxxxxxx Policy) or an agreement between the Company and its underwriters
prohibit a sale.
Section 3.2. Amendment of Agreement. This Agreement may be amended
only in a writing signed by the parties hereto. Notwithstanding the foregoing, the
Company need not obtain the Executive’s (or other interested party’s) consent for the
adjustment or cancellation of the Option, or the modification of the Agreement to the
extent deemed necessary to comply with any applicable law, the listing requirements of
any principal securities exchange or market on which the Shares are then traded, or to
preserve favorable accounting or tax treatment of the Option for the Company.
Section 3.3. Taxes. The Company is entitled to withhold the amount of
any tax attributable to any amount payable or Shares deliverable under this Agreement
after giving the Executive notice as far in advance as practicable, and the Company
may defer making payment or delivery if any such tax may be pending unless and until
indemnified to its satisfaction. The Executive may pay all or a portion of the
foreign, federal, state and local withholding taxes arising upon exercise, vesting or
payment of the Option, or a portion thereof, by electing to (i) have the Company
withhold vested Shares otherwise issuable under this Agreement, (ii) tender back
Shares received in connection with this Agreement, or (iii) deliver other previously
owned Shares, in each case having a fair market value equal to the amount to be
withheld; provided, however, the amount to be withheld may not exceed the total
minimum federal, state and local tax withholding obligations associated with the
transaction to the extent needed for the Company to preserve favorable accounting
treatment. The election must be made on or before the date as of which the amount of
tax to be withheld is determined. The Fair Market Value of a fractional Share
remaining after payment of the withholding taxes shall be paid to the Executive in
cash.
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Section 3.4. Adjustment Provisions; Change Of Control.
(a) Adjustment of Shares. The adjustment provisions of Section 14(a) of
the Plan are incorporated herein by reference. As such, the Board or Committee may
modify any provisions of this Agreement as permitted by Section 14(a) of the Plan to
the same extent as if this Agreement had been an award granted under the Plan.
(b) Change of Control. Upon a Change of Control, if the Executive is
employed by the Company on the date of the Change of Control, the Option shall vest in
full. In addition, upon a Change of Control, the Executive shall have the right,
exercisable by written notice to the Company within 60 days after the Change of
Control, to receive, in exchange for the surrender of the Option, an amount of cash
equal to the excess of the Change of Control Price (if the surrender occurs on the
date of the Change of Control) or the Fair Market Value of a Share on the date of
surrender (if the surrender occurs after the date of the Change of Control) of the
Shares covered by the Option that is so surrendered over the Exercise Price of such
Shares.
Section 3.5. Employment and Service. This Agreement shall not confer
upon the Executive any right with respect to continued employment or service with the
Company or any Affiliate. For purposes of this Agreement, the provisions of Section
15(c) of the Plan shall apply.
Section 3.6. Compliance with Rule 16b-3 of the Securities Exchange Act.
Transactions under this Agreement are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Securities Exchange Act of 1934,
as amended, and in all events this Agreement shall be construed in accordance with
Rule 16b-3. To the extent any provision of this Agreement or action by the Board or
Committee fails to so comply, it shall be deemed null and void to the extent permitted
by law and deemed advisable by the Board.
Section 3.7. No Fractional Shares. No fractional Shares or other
securities may be issued or delivered pursuant to this Agreement, and the Committee
may determine whether cash, other securities or other property will be paid or
transferred in lieu of any fractional Shares or other securities, or whether such
fractional Shares or other securities or any rights to fractional Shares or other
securities will be canceled, terminated or otherwise eliminated.
Section 3.8. Requirements of Law. This Agreement and the issuance of
Shares hereunder are subject to all applicable laws, rules and regulations and to such
approvals by any governmental agencies or national securities exchanges as may be
required. Notwithstanding any other provision of this Agreement, the Company has no
liability to deliver any Shares under this Agreement or make any payment unless such
delivery or payment would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.
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Section 3.9. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the laws
of Michigan, without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified except by a written agreement
executed by the parties hereto or their respective successors and legal
representatives. The arbitration provisions of Section 6 of the Employment Agreement
shall apply with respect to any dispute hereunder.
(b) All notices and other communications hereunder shall be in writing and shall
be deemed to be received when (i) hand delivered (with written confirmation of
receipt), (ii) when received by the addressee, if sent by nationally recognized
overnight delivery service (receipt requested) in each case to such address as a party
may designate by written notice to the other party.
(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement.
(d) This Agreement may be executed through the use of separate signature pages or
in any number of counterpart copies and each of such counterparts shall, for all
purposes, constitute one agreement binding on all the parties.
(e) The provisions of this Agreement contain all of the terms and conditions
agreed upon by the parties relating to the subject matter of this Agreement and shall
supersede all prior agreement, negotiations, correspondence, undertakings and
communications of the parties, either oral or written, with respect to such subject
matter. Specifically, this Agreement memorializes all of the terms and conditions of
the “Initial Grant Options” in the Employment Agreement.
IN WITNESS WHEREOF, the Executive has executed this Agreement and the Company has caused this
Agreement to be executed in its name on its behalf, as of the Effective Date.
| /s/ Xxxx X. Xxxxxxxx | ||||
| Xxxx X. Xxxxxxxx, “Executive” | ||||
| TECHTEAM GLOBAL, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Its: Corporate Vice President, General Counsel | ||||
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