NONQUALIFIED STOCK OPTION AGREEMENT ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT
10.4
ANALYSTS
INTERNATIONAL CORPORATION
2000
NONQUALIFIED STOCK OPTION PLAN
THIS
AGREEMENT, made effective as of
this 1st day of
November, 2007, by and between Analysts International Corporation, a Minnesota
corporation (the “Company”), and Xxxxx Xxxxxxx (“Optionee”).
W
I T N E
S S E T H:
WHEREAS,
Optionee on the date hereof is
a key employee or officer of the Company or its Affiliate; and
WHEREAS,
the Administrator has
authorized the grant of a nonqualified stock option to Optionee;
NOW,
THEREFORE, in consideration of the
premises and of the mutual covenants herein contained, the parties hereto agree
as follows:
1. Grant
of Option. The Company hereby grants to Optionee on the
date set forth above (the “Date of Grant”), the right and option (the “Option”)
to purchase all or portions of an aggregate of one-hundred fifty-seven thousand
157,000 shares of Common Stock (the “Stock”) at a per share price of $1.65 on
the terms and conditions set forth herein, and subject to adjustment pursuant
to
Section 11 of the Plan. This Option is a nonqualified stock option
and will not be treated as an incentive stock option, as defined under Section
422, or any successor provision, of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations thereunder.
2. Duration
and Exercisability.
a. General. The
term during which this Option may be exercised shall terminate on November
1,
2017, except as otherwise provided in Paragraphs 2(b)
through 2(d) below. This Option shall become exercisable according to
the following schedule:
|
Cumulative
Percentage
|
|
|
Vesting
Date
|
Of
Shares
|
|
Date
of Grant
|
25%
|
|
First
Anniversary of Date of Grant
|
50%
|
|
Second
Anniversary of Date of Grant
|
75%
|
|
Third
Anniversary of Date of Grant
|
100%
|
1
In
the
event of a Change of Control (as defined in Exhibit A to Optionee’s employment
agreement) on or after May 1, 2009, the Option shall vest immediately and be
fully exercisable
Once
the
Option becomes fully exercisable, Optionee may continue to exercise this Option
under the terms and conditions of this Agreement until the termination of the
Option as provided herein. If Optionee does not purchase upon an
exercise of this Option the full number of shares which Optionee is then
entitled to purchase, Optionee may purchase upon any subsequent exercise prior
to this Option’s termination such previously unpurchased shares in addition to
those Optionee is otherwise entitled to purchase.
b. Termination
of Employment (Other Than Disability or Death). If
Optionee ceases to be an employee of the Company or an Affiliate for any reason
other than disability or death, this Option shall completely terminate on the
earlier of (i) the close of business on the three-month anniversary date of
the
termination of such employment, and (ii) the expiration date of this Option
stated in Paragraph 2(a) above. In such period following such
termination, this Option shall be exercisable only to the extent the Option
was
exercisable on the vesting date immediately preceding the date on which
Optionee’s employment with the Company or Affiliate has terminated, but had not
previously been exercised. To the extent this Option was not
exercisable upon the termination of such employment, or if Optionee does not
exercise the Option within the time specified in this Paragraph 2(b), all rights
of Optionee under this Option shall be forfeited.
c. Disability. If
Optionee ceases to be an employee of the Company or an Affiliate because of
disability (as defined in Code Section 22(e), or any successor provision),
this
Option shall completely terminate on the earlier of (i) the close of business
on
the twelve-month anniversary date of the termination of such employment, and
(ii) the expiration date of this Option stated in Paragraph 2(a)
above. In such period following such termination, this Option shall
be exercisable only to the extent the Option was exercisable on the vesting
date
immediately preceding the date on which all of Optionee’s employment with the
Company or Affiliate have terminated, but had not previously been
exercised. To the extent this Option was not exercisable upon the
termination of such relationship, or if Optionee does not exercise the Option
within the time specified in this Paragraph 2(c), all rights of Optionee under
this Option shall be forfeited.
d. Death. In
the event of Optionee’s death, this Option shall terminate on the earlier of (i)
the close of business on the twelve-month anniversary date of the date of
Optionee’s death, and (ii) the expiration date of this Option stated in
Paragraph 2(a) above. In such period following Optionee’s death, this
Option may be exercised by the person or persons to whom Optionee’s rights under
this Option shall have passed by Optionee’s will or by the laws of descent and
distribution only to the extent the Option was exercisable on the vesting date
immediately preceding the date of Optionee’s death, but had not previously been
exercised. To the extent this Option was not exercisable upon the
date of Optionee’s death, or if such person or persons fail to exercise this
Option within the time specified in this Paragraph 2(d), all rights under this
Option shall be forfeited.
3. Manner
of Exercise.
a. General. The
Option may be exercised only by Optionee (or other proper party in the event
of
death or incapacity), subject to the conditions of the Plan and subject to
such
other administrative rules as the Administrator may deem advisable, by
delivering within the option period written notice of exercise to the Company
at
its principal office. The notice shall state the number of shares as
to which the Option is being exercised and shall be accompanied by payment
in
full of the option price for all shares designated in the notice. The
exercise of the Option shall be deemed effective upon receipt of such notice
by
the Company and upon payment that complies with the terms of the Plan and this
Agreement. The Option may be exercised with respect to any number or
all of the shares as to which it can then be exercised and, if partially
exercised, may be exercised as to the unexercised shares any number of times
during the option period as provided herein.
2
b. Form
of Payment. Subject to the approval of the
Administrator, payment of the option price by Optionee shall be in the form
of
cash, personal check, certified check or previously acquired shares of Stock
of
the Company, or any combination thereof. Any Stock so tendered as
part of such payment shall be valued at its Fair Market Value as provided in
the
Plan. For purposes of this Agreement, “previously-owned shares” means
shares of Stock which the Optionee has owned for at least six (6) months prior
to the exercise of the stock option, or for such other period of time as may
be
required by generally accepted accounting principles.
c. Stock
Transfer Records. As soon as practicable after the
effective exercise of all or any part of the Option, Optionee shall be recorded
on the stock transfer books of the Company as the owner of the shares purchased,
and the Company shall deliver to Optionee one or more duly issued stock
certificates evidencing such ownership. All requisite original issue
or transfer documentary stamp taxes shall be paid by the Company.
4. Miscellaneous.
a. Rights
as Shareholder. This Agreement shall not confer on
Optionee any right with respect to the continuance of any relationship with
the
Company or any of its Affiliates, nor will it interfere in any way
with the right of the Company to terminate any such
relationship. Optionee shall have no rights as a shareholder with
respect to shares subject to this Option until such shares have been issued
to
Optionee upon exercise of this Option. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior
to
the date such shares are issued, except as provided in Section 11 of the
Plan.
b. Securities
Law Compliance. The exercise of all or any parts of this
Option shall only be effective at such time as counsel to the Company shall
have
determined that the issuance and delivery of Stock pursuant to such exercise
will not violate any state or federal securities or other
laws. Optionee may be required by the Company, as a condition of the
effectiveness of any exercise of this Option, to agree in writing that all
Stock
to be acquired pursuant to such exercise shall be held, until such time that
such Stock is registered and freely tradable under applicable state and federal
securities laws, for Optionee’s own account without a view to any further
distribution thereof and that such shares will be not transferred or disposed
of
except in compliance with applicable state and federal securities
laws.
3
c. Mergers,
Recapitalizations, Stock Splits, Etc. Pursuant and
subject to Section 11 of the Plan, certain changes in the number or character
of
the Stock of the Company (through sale, merger, consolidation, exchange,
reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in
an
adjustment, reduction or enlargement, as appropriate, in Optionee’s rights with
respect to any unexercised portion of the Option (i.e., Optionee shall
have such “anti-dilution” rights under the Option with respect to such events,
but shall not have “preemptive” rights).
d. Shares
Reserved. The Company shall at all times during the
option period reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.
e. Withholding Taxes. In
order to permit the Company to comply with all applicable federal or state
income tax laws or regulations, the Company may take such action as it deems
appropriate to insure that, if necessary, all applicable federal or state
payroll, income or other taxes are withheld from any amounts payable by the
Company to Optionee. If the Company is unable to withhold such
federal and state taxes, for whatever reason, Optionee hereby agrees to pay
to
the Company an amount equal to the amount the Company would otherwise be
required to withhold under federal or state law.
Subject
to such rules as the
Administrator may adopt, the Administrator may, in its sole discretion, permit
a
Optionee to satisfy such withholding tax obligations, in whole or in part (i)
by
delivering shares of Stock of having an equivalent fair market value, or (ii)
by
electing to have the Company withhold shares of Stock otherwise issuable to
Optionee having a Fair Market Value equal to the minimum required tax
withholding, based on the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes, that are applicable to the
supplemental income resulting from the option. In no event may the
Company or Affiliate withhold shares having a Fair Market Value in excess of
such statutory minimum required tax withholding. Optionee’s election
to have shares withheld for purposes of such withholding tax obligations shall
be made on or before the date that triggers such obligations or, if later,
the
date that the amount of tax to be withheld is determined under applicable tax
law. Optionee’s election shall be approved by the Administrator and
otherwise comply with such rules as the Administrator may adopt to assure
compliance with Rule 16b-3 or any successor provision, as then in effect, of
the
General Rules and Regulations under the Securities and Exchange Act of 1934,
if
applicable.
f. Nontransferability. During
the lifetime of Optionee, the accrued Option shall be exercisable only by
Optionee or by the Optionee’s guardian or other legal representative, and shall
not be assignable or transferable by Optionee, in whole or in part, other than
by will or by the laws of descent and distribution.
g. 2000
Stock Option Plan. The Option evidenced by this
Agreement is granted pursuant to the Plan, a copy of which Plan has been made
available to Optionee and is hereby incorporated into this
Agreement. This Agreement is subject to and in all respects limited
and conditioned as provided in the Plan. All defined terms of the Plan shall
have the same meaning when used in this Agreement. The Plan governs
this Option and, in the event of any questions as to the construction of this
Agreement or in the event of a conflict between the Plan and this Agreement,
the
Plan shall govern, except as the Plan otherwise provides.
4
h. Lockup
Period Limitation. Optionee agrees that in the event the
Company advises Optionee that it plans an underwritten public offering of its
Common Stock in compliance with the Securities Act of 1933, as amended, and
that
the underwriter(s) seek to impose restrictions under which certain shareholders
may not sell or contract to sell or grant any option to buy or otherwise dispose
of part or all of their stock purchase rights of the underlying Common Stock,
Optionee hereby agrees that for a period not to exceed 180 days from the
prospectus, Optionee will not sell or contract to sell or grant an option to
buy
or otherwise dispose of this option or any of the underlying shares of Stock
without the prior written consent of the underwriter(s) or its
representative(s).
i. Blue
Sky Limitation. Notwithstanding anything in this
Agreement to the contrary, in the event the Company makes any public offering
of
its securities and determines in its sole discretion that it is necessary to
reduce the number of issued but unexercised stock purchase rights so as to
comply with any state securities or Blue Sky law limitations with respect
thereto, the Administrator shall have the right (i) to accelerate the
exercisability of this Option and the date on which this Option must be
exercised, provided that the Company gives Optionee 15 days’ prior written
notice of such acceleration, and (ii) to cancel any portion of this Option
or
any other option granted to Optionee pursuant to the Plan which is not exercised
prior to or contemporaneously with such public offering. Notice shall
be deemed given when delivered personally or when deposited in the United States
mail, first class postage prepaid and addressed to Optionee at the address
of
Optionee on file with the Company.
j. Accounting
Compliance. Optionee agrees that, if a merger,
reorganization, liquidation or other “transaction” as defined in Section 11 of
the Plan is treated as a “pooling of interests” under generally accepted
accounting principles and Optionee is an “affiliate” of the Company or any
Subsidiary (as defined in applicable legal and accounting principles) at the
time of such transaction, Optionee will comply with all requirements of Rule
145
of the Securities Act of 1933, as amended, and the requirements of such other
legal or accounting principles, and will execute any documents necessary to
ensure such compliance.
k. Stock
Legend. The Administrator may require that the
certificates for any shares of Common Stock purchased by Optionee (or, in the
case of death, Optionee’s successors) shall bear an appropriate legend to
reflect the restrictions of Paragraph 4(b) and Paragraphs 4(h) through 4(k)
of
this Agreement.
l. Scope
of Agreement. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and Optionee and any
successor or successors of Optionee permitted by Paragraph 2 or Paragraph 4(f)
above.
5
m. Arbitration. Any
dispute arising out of or relating to this Agreement or the alleged breach
of
it, or the making of this Agreement, including claims of fraud in the
inducement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy. If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be a retired state or federal judge or
an attorney who has practiced securities or business litigation for at least
10
years. If the parties cannot agree on an arbitrator within 20 days,
any party may request that the chief judge of the District Court for Hennepin
County, Minnesota, select an arbitrator. Arbitration will be
conducted pursuant to the provisions of this Agreement, and the commercial
arbitration rules of the American Arbitration Association, unless such rules
are
inconsistent with the provisions of this Agreement. Limited civil
discovery shall be permitted for the production of documents and taking of
depositions. Unresolved discovery disputes may be brought to the
attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. The arbitrator may award to
the prevailing party, if any, as determined by the arbitrator, all of its costs
and fees, including the arbitrator’s fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys’
fees. Unless otherwise agreed by the parties, the place of any
arbitration proceedings shall be Hennepin County, Minnesota.
IN
WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed on the day and year first above
written.
|
ANALYSTS
INTERNATIONAL CORPORATION
|
|
|
By
|
_______________________________________ |
|
Its
|
_______________________________________ |
| _______________________________________ | |
|
Optionee
|
6
