Exhibit 10.7
[FORM OF]
INFORMATION MANAGEMENT ASSOCIATES, INC.
Non-Employee Directors Stock Option Agreement
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Non-Employee Directors Stock Option Agreement (the "Agreement") made this
_____ day of _______________, 19____ between INFORMATION MANAGEMENT ASSOCIATES,
INC., a Connecticut corporation, (hereinafter called the "Corporation") and
_______________________ (hereinafter called the "Grantee").
In consideration of the premises, the mutual covenants hereinafter set
forth, and other good and valuable consideration, the Corporation and the
Grantee agree as follows:
1. Award of Option. The Corporation hereby awards to the Grantee, as a
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matter of separate inducement and agreement, and not in lieu of salary or any
other compensation for services, options to purchase an aggregate of [7,500]
shares of the Corporation's Common Stock ("Stock") pursuant to the stock option
provisions contained in Part II of the Information Management Associates, Inc.
1996 Non-Employee Directors Stock Option Plan (the "Plan"), on the terms and
conditions hereinafter set forth, at the purchase price of $________ per share
(such shares, number of shares and purchase price being subject to adjustment as
provided in Paragraph 9 below). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Plan.
2. Terms of Plan. The Plan, a copy of which is attached hereto, is
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incorporated herein by reference and is made part of this Agreement as if fully
set forth herein. This Agreement is subject to, and the Corporation and the
Grantee agree to be bound by, all of the terms and conditions of the Plan as the
same exists at the time this Agreement was entered. The Plan shall control in
the event there is any express conflict between the Plan and the terms hereof,
and on such matters that are not expressly covered in this Agreement.
Subsequent amendments of the Plan shall not adversely affect the Grantee's
rights under this Agreement.
3. Exercise of Option.
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(a) The Stock Options granted pursuant to this Agreement are
exercisable as to all of the shares of Stock covered hereby on or after
__________________.
(b) Each exercise must encompass at least 100 shares. In the event the
Grantee's exercise includes a fractional share, the Corporation will not be
required to issue a fractional share but will pay the Grantee in cash the value
of such fraction. All
unexercised rights shall lapse and forever terminate after the expiration of ten
years from the date of this Agreement (the "Option Period").
4. Termination of Director Status.
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(a) If Grantee's status as a Non-Employee Director is terminated (for
reasons other than retirement at or after age 65, Disability or death), all
Stock Options held by the Grantee shall expire immediately and such Stock Option
shall not be exercisable after the date of termination of the Grantee's Non-
Employee Director status.
(b) If Grantee's status as a Non-Employee Director is terminated by
reason of retirement at or after age 65 or as a result of Disability, only those
Stock Options held by the Grantee which were immediately exercisable at the date
of termination of Non-Employee Director status shall be exercisable by the
Grantee following the termination of Grantee's Non-Employee Director status.
Such Stock Options must be exercised within three months after such termination
of Non-Employee Director status (but in no event after the expiration of the
Option Period) or they shall be forfeited.
(c) Upon the death of Grantee, only those Stock Options immediately
exercisable at the date of the Grantee's death shall be exercisable by the
representative of the Grantee's estate or beneficiaries thereof to whom the
Stock Options have been transferred. Such Stock Options must be exercised by
the earlier of (i) three months from the date of the Grantee's death, or (ii)
the expiration of the Option Period, or they shall be forfeited.
(d) For purposes of this Paragraph 4, Non-Employee Director status of
Grantee shall not be deemed to have terminated solely by Grantee later
attaining status as an employee of the Corporation or an Affiliate.
5. Manner of Exercise. Full payment for the shares of Stock purchased
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shall be made at the time of any exercise of Stock Options pursuant to this
Agreement. The purchase price shall be payable to the Corporation in United
States dollars in cash or by check, bank draft, or postal or express money
order. The Board, in its discretion, may permit Grantee to make partial or full
payment of the purchase price by the surrender of Stock owned by the Grantee
prior to the date of exercise. Shares of Stock surrendered in payment of the
purchase price as provided above shall be valued at the Fair Market Value
thereof on the date of exercise, surrender of such to be evidenced by delivery
of the certificate(s) representing such shares in such manner, and endorsed in
such form, or accompanied by stock powers endorsed in such form, as the Board
may determine. Subject to the terms and conditions hereof, the
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Stock Options shall be exercisable by notice to the Corporation on the form
provided by the Corporation, a copy of which is attached hereto. In the event
that the Stock Options are being exercised by any person or persons other than
the Grantee, the notice shall be accompanied by proof, satisfactory to the
Corporation, of the right of such person or persons to exercise any right under
this Agreement.
6. Rights of Grantee. The granting of a Stock Option hereunder shall not
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give the Grantee any right to similar grants in the future or any right to be
retained as a Non-Employee Director, and Grantee shall remain subject to removal
to the same extent as if the Plan were not in effect.
Neither the Grantee nor any other person legally entitled to exercise any
rights under this Agreement shall be entitled to any of the rights or privileges
of a stockholder of the Corporation with respect to any shares which may be
issuable upon any exercise pursuant to this Agreement, unless and until a
certificate or certificates representing such shares shall have been actually
issued and delivered to the Grantee or such person.
7. Non-Transferability of Stock Option. Except as otherwise provided
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herein, the Stock Options and the rights and privileges conferred hereby may not
be transferred, assigned, pledged or hypothecated in any way, other than by will
or the laws of descent and distribution, and the Stock Options hereunder shall
be exercisable during the Grantee's lifetime only by the Grantee or his
conservator.
8. Taxes and Withholding. All payments to Grantee or to his or her legal
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representative shall be subject to any applicable tax, community property, or
other statutes or regulations of the United States or of any state having
jurisdiction thereof. The Grantee may be required to pay to the Corporation the
amount of any withholding taxes which the Board, in its sole discretion, deems
necessary to be withheld in order to comply with any applicable statutes or
regulations with respect to this Stock Option or its exercise. In the event
that such payment is not made when due, the Corporation shall have the right to
deduct, to the extent permitted by law, from any payment or settlement of any
kind otherwise due to such person all or part of the amount required to be
withheld. If the Board, in its sole discretion, permits shares of Stock to be
used to satisfy any such tax withholding, such Stock shall be valued based upon
the Fair Market Value of such Stock as of the date the tax withholding is
required to be made, such date to be determined by the Board. The Corporation
shall not be required to issue Stock until such obligations are satisfied.
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9. Recapitalization Adjustments.
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(a) In the event of any change in capitalization affecting the Stock,
including, without limitation, a stock dividend or other distribution, stock
split, reverse stock split, recapitalization, consolidation, subdivision, split-
up, spin-off, split-off, combination or exchange of shares or other form of
reorganization or recapitalization, or any other change affecting the Stock, the
Board shall authorize and make such proportionate adjustments, if any, as the
Board deems appropriate to reflect such change, including, without limitation,
the number of shares of Stock covered by this Agreement, and the purchase price
per share of Stock in respect of this Agreement.
(b) Any provision hereof to the contrary notwithstanding, in the event
the Corporation is a party to a merger or other reorganization, this Agreement
shall be subject to the agreement of merger or reorganization. Such agreement
may provide, without limitation, for the assumption of this Agreement by the
surviving corporation or its parent, for its continuation by the Corporation (if
the Corporation is a surviving corporation), for accelerated vesting and
accelerated expiration of Stock Options covered by this Agreement or for
settlement of such options in cash.
10. Notices. Each notice to the Corporation relating to this Agreement
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shall be in writing and delivered in person or by registered mail to the
Corporation at its office, Xxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx
00000, to the attention of the Secretary. All notices to the Grantee or other
person or persons then entitled to exercise any right pursuant to this agreement
shall be delivered to the Grantee or such other person or persons at the
Grantee's address specified below or at such other address as the Grantee or
such other person may specify in writing to the Corporation by a notice
delivered in accordance with this paragraph.
11. Restriction on Shares. The Corporation's obligation to issue or
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deliver any certificate or certificates for shares of Stock under this
Agreement, and the transferability of shares of Stock acquired by the exercise
of these Stock Options, shall be subject to all of the following conditions,
which, by his execution of this Agreement, the Grantee acknowledges may affect
the exercisability of these Stock Options and the transferability of any shares
acquired upon exercise hereof:
(a) Any registration or other qualification of such shares under any
state or federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Board shall, in its absolute
discretion upon the advice of counsel, deem necessary or
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advisable provided that, the Corporation shall be under no obligation to
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register or qualify these Stock Options or the shares subject to these Stock
Options;
(b) The obtaining of any other consent, approval, or permit from any
state or federal governmental agency which the Board shall, in its absolute
discretion upon the advice of counsel, determine to be necessary or advisable;
(c) Each stock certificate issued pursuant to this Agreement shall bear
such legends which the Corporation shall determine, in its absolute discretion,
are necessary or advisable, or which in the opinion of counsel to the
Corporation are required under applicable federal or state securities laws; and
(d) The Corporation shall not be obligated to issue or deliver any
shares of Stock pursuant to this Agreement or the exercise thereof if such
issuance or delivery would, in the opinion of counsel to the Corporation, be a
violation of any applicable state or federal law or regulation.
12. Miscellaneous.
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(a) This Agreement comprises the whole agreement between the parties
hereto. It may not be modified or terminated orally, and it shall be deemed to
be a Connecticut contract, subject to construction and enforcement in accordance
with the laws of Connecticut.
(b) This Agreement shall inure to the benefit of, and be binding upon,
each successor of the Corporation and, to the extent specifically provided
herein and in the Plan, shall inure to the benefit of and be binding upon the
Grantee's heirs, legal representatives, and successors.
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IN WITNESS WHEREOF, this Agreement is executed by the Grantee and by the
Corporation through its duly authorized officer or officers as of the day and
year first above written.
GRANTOR:
INFORMATION MANAGEMENT
ASSOCIATES, INC.
By:
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Name:
Title:
GRANTEE:
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Name:
Address:
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Social Security No.:
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LETTER OF STOCK OPTION EXERCISE
CONFIDENTIAL
INFORMATION MANAGEMENT ASSOCIATES, INC.
Xxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
Gentlemen:
I wish to purchase the following shares of Common Stock by exercising the
options granted to me on ________________________ pursuant to a Non-Employee
Directors Stock Option Agreement, dated ______________________:
Stock option shares: __________________
The purchase price for these shares is $______ per share. My check payable
to Information Management Associates, Inc. in the amount of $_______________ in
payment of the purchase price is enclosed. Please issue the stock
certificate(s) for these shares in my name as follows:
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*Name
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Address
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Social Security Number
I understand and acknowledge that neither the stock options granted to me
under the Non-Employee Directors Stock Option Agreement or the shares to be
issued to me upon exercise thereof have been registered under the Securities Act
of 1933, as amended (the "Act") or under state securities laws. I am acquiring
such shares for investment and not with a view to the distribution thereof. I
have been provided with financial and other information regarding Information
Management Associates, Inc. ("IMA") sufficient to enable me to make an informed
investment decision
with respect to the purchase of the shares and have had an opportunity to ask
questions of and receive answers from management of IMA with respect to its
financial condition, results of operations and material aspects of its business.
I understand and agree that the Company is under no obligation to register the
shares and that I must hold the shares indefinitely unless such shares are
registered under the Act or there is an exemption from the registration
requirements of the Act which applies to any proposed transfer.
Sincerely yours,
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Signature
(____)__________(____)_________
Office Telephone/Home Telephone
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* If you wish to have the shares issued in your name and that of another
person jointly, we suggest that the following form be used: "(Your name) and
(name of other person), as joint tenants with right of survivorship."
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LETTER OF STOCK OPTION GRANT
Date
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Dear ____________________:
I am pleased to confirm that you have been awarded a Stock Option (the
"Option") under the Information Management Associates, Inc. 1996 Non-Employee
Directors Stock Option Plan (the "Plan"). Enclosed is a Non-Employee Directors
Stock Option Agreement (the "Agreement"), which has been signed by Information
Management Associates, Inc. Please sign such Agreement and return a copy to me
in the enclosed envelope.
As you know, the Option covers common shares of Information Management
Associates, Inc. and are exercisable in accordance with the terms of the
Agreement. In addition, the shares covered by this Option have not been
registered under state or federal securities laws. Accordingly, under these
laws, until such time as an effective registration statement is filed or an
exemption becomes available with respect to these shares, there are prohibitions
upon the exercise of this Option and the later sale of any shares purchased
under this Option. These prohibitions stem from the securities laws.
Please contact the undersigned with any questions you may have.
Sincerely,
