AXIOHM TRANSACTION SOLUTIONS, INC.
STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION GRANT
Name: Xxxxxxx Xxxxxxxx
Address: Axiohm IPB Inc.
000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
In consideration for the surrender and cancellation of your option to
purchase 1,583 shares of the Common Stock of Axiohm S.A. and subject to the
closing of the merger ("Merger") of AX Acquisition Corporation into DH
Technology, Inc. (which will be renamed Axiohm Transaction Solutions, Inc. at
the time of the Merger) you have been granted an option to purchase Common Stock
of the Company as follows:
Date of Grant: October 2, 1997
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Vesting Commencement Date: October 2, 1997
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Exercise Price per Share: $7.15
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Total Number of Shares Granted: 231,118
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Total Exercise Price: $1,652,493.70
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Type of Option: Nonstatutory Stock Option
-------------------------
Expiration Date: December 31, 2005
-----------------
VESTING SCHEDULE: This Option may be exercised, in whole or in part,
in accordance with the following schedule:
20% of the shares subject to this Option (46,224 shares) are immediately
exercisable; an additional 20% shall become exercisable on January 1 of
each year thereafter, beginning with January 1, 1998.
TERMINATION PERIOD: This Option may be exercised for 60 days after
termination of Optionee's employment with the Company or a Subsidiary or Parent,
or such longer period as may be applicable upon death or Disability of Optionee
as provided in this Option Agreement, but in no event later than the Expiration
Date as provided above.
II. AGREEMENT
1. DEFINITIONS. As used herein, the following definitions
shall apply:
(a) "ADMINISTRATOR" means the Board or such of its Committees as
shall be administering the Company's 1992 Stock Option Plan.
(b) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option plans under applicable securities laws,
California corporate law and the Code.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMON STOCK" means the Common Stock of the Company.
(f) "COMPANY" means Axiohm Transaction Solutions, Inc., a California
corporation.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE" means that the employment or
consulting relationship is not interrupted or terminated by the Company, any
Parent or Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; PROVIDED,
however, that for purposes of Incentive Stock Options, any such leave may not
exceed ninety (90) days, unless reemployment upon the expiration of such leave
is guaranteed by contract (including certain Company policies) or statute; or
(ii) transfers between locations of the Company or between the Company, its
Parent, its Subsidiaries or its successor.
(h) "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(i) "EMPLOYEE" means any person employed by the Company or any Parent
or Subsidiary of the Company. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.
(j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(k) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
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(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, the Fair Market Value of a Share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or 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 last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(l) "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(m) "NONSTATUTORY STOCK OPTION" means any Option that is not an
Incentive Stock Option.
(n) "NOTICE OF XXXXX" means a written notice evidencing certain terms
and conditions of an individual Option. The Notice of Grant is part of the
Option Agreement.
(o) "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.
(p) "OPTION" means a stock option.
(q) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant.
(r) "OPTIONED STOCK" means the Common Stock subject to an Option or
Right.
(s) "OPTIONEE" means an Employee who holds an outstanding Option or
Right.
(t) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
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(u) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor rule thereto, as in effect when discretion is being exercised with
respect to the Plan.
(v) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(w) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
2. GRANT OF OPTION. Subject to the closing of the Merger, the Company
hereby grants to the Optionee named in the Notice of Grant attached as Part I of
this Agreement (the "Optionee") an option (the "Option") to purchase the number
of Shares set forth in the Notice of Grant at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price").
3. OPTION CANCELLATION. Optionee currently holds an option to purchase
1,583 shares of the Common Stock of Axiohm S.A. (the "Axiohm Option"). Optionee
and Company acknowledge and agree that, notwithstanding any other term or
provision of the Axiohm Option, and subject to the closing of the Merger, the
Axiohm Option is hereby canceled and surrendered to the Company and Optionee
shall have no further rights, claims or benefits in connection with such Axiohm
Option. Axiohm S.A. shall be entitled to rely on Optionee's agreements in this
paragraph.
4. EXERCISE OF OPTION.
(a) RIGHT TO EXERCISE. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Option Agreement. In the event of Optionee's
death, Disability or other termination of Optionee's employment relationship,
the exercisability of the Option is governed by the applicable provisions 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 as to
which the Option is being exercised (the "Exercised Shares") and such other
representations and agreements as may be required by the Company pursuant to
this Agreement. The Exercise Notice shall be signed by the Optionee and shall
be delivered in person or by certified mail to the Shareholders' Services
Department 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 Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price and any required
withholding tax.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange
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upon which the Shares are then listed. 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.
5. 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
(b) check; or
(c) delivery of a properly executed Exercise Notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price; or
(d) surrender of other Shares that (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.
6. TERMINATION OF EMPLOYMENT RELATIONSHIP. In the event an Optionee's
Continuous Status as an Employee terminates (other than upon the Optionee's
death or Disability), the Optionee may exercise this Option, but only within
such period of time as is determined by the Administrator at the time of grant
and specified in the Notice of Grant and only to the extent that the Optionee
was entitled to exercise it at the date of such termination (but in no event
later than the expiration of the term of this Option as set forth in this Option
Agreement). To the extent that Optionee was not entitled to exercise this
Option at the date of such termination, and to the extent that the Optionee does
not exercise this Option (to the extent otherwise so entitled) within the time
specified herein, this Option shall terminate.
7. DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status
as an Employee terminates as a result of the Optionee's Disability, the Optionee
may exercise his or her Option, but only within such period of time following
the date of termination due to Disability not exceeding ten (10) years as is
determined by the Administrator, and only to the extent that the Optionee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of the term of this Option as set forth in this Option
Agreement). To the extent that Optionee was not entitled to exercise this
Option at the date of such termination, and to the extent that the Optionee does
not exercise this Option (to the extent otherwise so entitled) within the time
specified herein, this Option shall terminate.
8. DEATH OF OPTIONEE. In the event of an Optionee's death, the
Optionee's estate or a person who acquired the right to exercise the deceased
Optionee's Option by bequest or
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inheritance may exercise this Option, but only within ten (10) years following
the date of death, and only to the extent that the Optionee was entitled to
exercise it at the date of death (but in no event later than the expiration of
the term of this Option as set forth in the Option Agreement). To the extent
that Optionee was not entitled to exercise this Option at the date of death, and
to the extent that the Optionee's estate or a person who acquired the right to
exercise this Option does not exercise this Option (to the extent otherwise so
entitled) within the time specified herein, this Option shall terminate.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET
SALE OR CHANGE OF CONTROL.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
this Option, as well as the price per share of Common Stock covered by each this
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock 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 of
Common Stock effected without receipt of consideration by the Company; PROVIDED,
however, that conversion of any 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 or price of shares
of Common Stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, to the extent that this Option has
not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its
sole discretion in such instances, declare that this Option shall terminate as
of a date fixed by the Board and give Optionee the right to exercise this Option
as to all or any part of the Optioned Stock, including Shares as to which this
Option would not otherwise be exercisable.
(c) MERGER OR ASSET SALE. Subject to the provisions of paragraph (d)
hereof, 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 Company, this
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 does not agree to assume this Option or to
substitute an equivalent option, the Administrator shall, in lieu of such
assumption or substitution, provide for the Optionee to have the right to
exercise this Option as to all or a portion of the Optioned Stock, including
Shares as to which it would not otherwise be exercisable. If the Administrator
makes an Option exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee that
this Option shall be exercisable for a period of
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fifteen (15) days from the date of such notice, and this Option will terminate
upon the expiration of such period. For the purposes of this paragraph,this
Option shall be considered assumed if, immediately following the merger or sale
of assets, this Option confers the right to purchase, for each Share of
Optioned Stock subject to this Option immediately prior to the merger or sale 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 sale of assets was not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation and the participant, provide for the
consideration to be received upon the exercise of this Option, for each Share of
Optioned Stock subject to this Option, 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.
(d) CHANGE IN CONTROL. In the event of a "Change in Control" of the
Company, as defined in paragraph (e) below, then the following acceleration and
valuation provisions shall apply:
(i) Except as otherwise determined by the Board, in its
discretion, prior to the occurrence of a Change in Control, any portion of this
Option outstanding on the date such Change in Control is determined to have
occurred that is not yet exercisable and vested on such date shall become fully
exercisable and vested;
(ii) Except as otherwise determined by the Board, in its
discretion, prior to the occurrence of a Change in Control, any portion of this
Option, to the extent that it is exercisable and vested (including any portion
that shall become exercisable and vested pursuant to subparagraph (i) above),
shall be terminated in exchange for a cash payment equal to the Change in
Control Price, (reduced by the exercise price, if any, applicable to this
Option). These cash proceeds shall be paid to the Optionee or, in the event of
death of an Optionee prior to payment, to the estate of the Optionee or to a
person who acquired the right to exercise the Option by bequest or inheritance.
(e) DEFINITION OF "CHANGE IN CONTROL". For purposes of
this Section 11, a "Change in Control" means the happening of any of the
following:
(i) When any "person," as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (other than the Company, a Subsidiary or a Company
employee benefit plan, including any trustee of such plan acting as trustee) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or
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(ii) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or
(iii) A change in the composition of the Board of Directors of
the Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either
(A) are directors of the Company as of the date the Plan is approved by the
shareholders, or (B) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).
(f) CHANGE IN CONTROL PRICE. For purposes of this Section 11,
"Change in Control Price" shall be, as determined by the Board, (i) the highest
Fair Market Value of a Share within the 60-day period immediately preceding the
date of determination of the Change in Control Price by the Board (the "60-Day
Period"), or (ii) the highest price paid or offered per Share, as determined by
the Board, in any bona fide transaction or bona fide offer related to the Change
in Control of the Company, at any time within the 60-Day Period, or (iii) such
lower price as the Board, in its discretion, determines to be a reasonable
estimate of the fair market value of a Share.
10. NON-TRANSFERABILITY OF OPTION. 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 of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
11. TAX CONSEQUENCES. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY
IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a) EXERCISING THE OPTION. If this Option does not qualify as an
Incentive Stock Option, the Optionee may incur regular federal income tax
liability upon exercise. The Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the Exercised Shares on the date of exercise
over their aggregate Exercise Price. If the Optionee is an employee or a former
employee, the Company will be required to withhold from his or her compensation
or collect from Optionee and pay to the
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applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(b) DISPOSITION OF SHARES. If the Optionee holds the Shares for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.
12. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of this Option unless the exercise of this Option and the issuance and
delivery of such Shares shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, Applicable Laws,
and the requirements of any stock exchange or quotation system upon which the
Shares may then be listed or quoted, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of
this Option the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
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
Administrator upon any questions relating to the Option Agreement.
OPTIONEE: AXIOHM TRANSACTION SOLUTIONS, INC.
----------------------------- By:
Signature -------------------------------
----------------------------- Title:
Print Name ----------------------------
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CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of this Option Agreement. In consideration of the Company's
granting his or her spouse the right to purchase Shares as set forth in this
Option Agreement, the undersigned hereby agrees to be irrevocably bound by the
terms and conditions of the this Option Agreement and further agrees that any
community property interest shall be similarly bound. The undersigned hereby
appoints the undersigned's spouse as attorney-in-fact for the undersigned with
respect to any amendment or exercise of rights under this Option Agreement.
--------------------------------
Spouse of Optionee
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EXHIBIT A
AXIOHM TRANSACTION SOLUTIONS, INC.
EXERCISE NOTICE
Axiohm Transaction Solutions, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, XX 00000
Attention: Shareholders' Services Department
1. EXERCISE OF OPTION. Effective as of today, ___________, 199__, the
undersigned ("Purchaser") hereby elects to purchase _________ shares (the
"Shares") of the Common Stock of DH Technology, Inc. (the "Company") under and
pursuant to the Stock Option Agreement dated ________ (the "Option Agreement").
The aggregate purchase price for the Shares shall be $___________, as required
by the Option Agreement.
2. DELIVERY OF PAYMENT. 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 Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of this
Agreement, Purchaser shall have all of the rights of a shareholder of the
Company with respect to the Shares from and after the date the stock certificate
evidencing such Shares is issued, as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company.
5. TAX CONSULTATION. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. ENTIRE AGREEMENT; GOVERNING LAW. The Option Agreement is incorporated
herein by reference. This Agreement and the Option Agreement constitute the
entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Purchaser
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with respect to the subject matter hereof, and such agreement is governed by
California law except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
PURCHASER: AXIOHM TRANSACTION SOLUTIONS, INC.
----------------------------- By:
Signature -------------------------------
----------------------------- Its:
Print Name -----------------------------
ADDRESS: ADDRESS:
--------------------------- 00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, XX 00000
---------------------------
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