Exhibit 99.7
QRS CORPORATION
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board") has
adopted the Corporation's 1993 Stock Option/Stock Issuance Plan (the "Plan") for
the purpose of attracting and retaining the services of key employees (including
officers and directors), non-employee Board members and consultants and other
independent advisors.
B. Optionee is an individual who is to render valuable
services to the Corporation or one or more parent or subsidiary corporations,
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation's grant of a stock
option to Optionee.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and
conditions set forth in this Agreement, the Corporation hereby grants to
Optionee, as of the grant date (the "Grant Date") specified in the accompanying
Notice of Grant of Stock Option (the "Grant Notice"), a stock option to purchase
up to that number of shares of the Corporation's Common Stock (the "Option
Shares") as is specified in the Grant Notice. Such Option Shares shall be
purchasable from time to time during the option term at the option price (the
"Option Price") specified in the Grant Notice.
2. Option Term. This option shall expire at the close of
business on the expiration date (the "Expiration Date") specified in the Grant
Notice, unless sooner terminated in accordance with Paragraph 5 or 6.
3. Limited Transferability. This option shall be exercisable
only by Optionee during Optionee's lifetime and shall not be transferable or
assignable by Optionee other than by will or by the laws of descent and
distribution following Optionee's death.
4. Dates of Exercise. This option shall become exercisable for
the Option Shares in accordance with the installment schedule specified in the
Grant Notice. As the option becomes exercisable for one or more installments,
those installments shall accumulate, and the option shall remain exercisable for
the accumulated installments until the Expiration Date or sooner termination of
the option term under Paragraph 5 or Paragraph 6 of this Agreement.
In no event shall this option become exercisable for any
additional Option Shares following Optionee's cessation of Service.
5. Cessation of Service. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
(i) This option shall immediately terminate and cease
to be outstanding with respect to any Option Shares for which the
option is not exercisable at the time of Optionee's cessation of
Service.
(ii) Should Optionee cease Service for any reason
other than death or permanent disability while this option remains
outstanding, then Optionee shall have a three (3)-month period measured
from the date of such cessation of Service in which to exercise this
option for any or all of the Option Shares for which this option is
exercisable at the time of such cessation of Service. This option shall
cease to be so exercisable, and shall accordingly terminate, upon the
expiration of such three (3)-month period or (if earlier) upon the
specified Expiration Date of the option term.
(iii) Should Optionee die while in Service or within
the three (3)-month period following his or her cessation of Service,
then the personal representative of Optionee's estate or the person or
persons to whom this option is transferred pursuant to Optionee's will
or in accordance with the laws of descent and distribution shall have
the right to exercise the option for any or all of the Option Shares
for which this option is exercisable at the time of Optionee's
cessation of Service, less any Option Shares subsequently purchased by
Optionee prior to death. Such right shall lapse, and this option shall
terminate and cease to remain outstanding, upon the earlier of (A) the
expiration of the twelve (12)-month period measured from the date of
Optionee's death or (B) the Expiration Date.
(iv) Should Optionee become permanently disabled and
cease by reason thereof to remain in Service at any time during the
option term, then Optionee shall have a twelve (12) month period
commencing with the date of such cessation of Service in which to
exercise this option for any or all of the Option Shares for which this
option is exercisable at the time of such cessation of Service. This
option shall cease to remain so exercisable, and shall accordingly
terminate, upon the expiration of such twelve (12)-month period or (if
earlier) upon the Expiration Date.
(v) Should (A) Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty,
willful misconduct, fraud or embezzlement) or (B) Optionee make any
unauthorized use or disclosure of confidential information or trade
secrets of the Corporation or any parent or subsidiary, then in any
such event this option shall terminate immediately and cease to be
outstanding.
(vi) During the limited period of post-Service
exercisability applicable pursuant to subparagraphs (ii) through (iv)
above, this option may not be exercised in the aggregate for more than
the number of Option Shares (if any) for which this option is, at the
time of the Optionee's cessation of Service, exercisable in accordance
with either the normal exercise provisions specified in the Grant
Notice or the special acceleration provisions of Paragraph 6 of this
Agreement.
(vii) For purposes of this Agreement, the following
definitional provisions shall be in effect:
A. Optionee shall be deemed to remain in Service for
so long as such individual renders services on a periodic basis to the
Corporation (or any parent or subsidiary) in the capacity of an
Employee, a non-employee member of the board of directors or an
independent consultant or advisor.
B. Optionee shall be considered to be an Employee for
so long as such individual remains in the employ of the Corporation or
any parent or subsidiary, subject to the control and direction of the
employer entity not only as to the work to be performed but also as to
the manner and method of performance.
C. Optionee shall be deemed to be permanently
disabled and to have incurred a permanent disability if Optionee is
unable to engage in any substantial gainful activity by reason of any
medically-determinable physical or mental impairment expected to result
in death or to be of continuous duration of twelve (12) months or more.
D. A corporation shall be considered to be a
subsidiary of the Corporation if it is a member of an unbroken chain of
corporations beginning with the Corporation, provided each such
corporation in the chain (other than the last corporation) owns, at the
time of determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the
other corporations in such chain.
E. A corporation shall be considered to be a parent
of the Corporation if it is a member of an unbroken chain ending with
the Corporation, provided each such corporation in the chain (other
than the Corporation) owns, at the time of determination, stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
6. Corporate Transaction.
A. In the event of any of the following shareholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):
(i) a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction the
principal purpose of which is to change the State in which the
Corporation is incorporated,
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is
the surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from those who held such securities immediately prior to such merger,
this option, to the extent outstanding at such time
but not otherwise fully exercisable, shall automatically accelerate so that such
option shall, immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable for all the Option Shares at the
time subject to such option and may be exercised for all or any portion of such
shares. No such acceleration of this option, however, shall occur if and to the
extent: (i) this option is, in connection with the Corporate Transaction, either
to be assumed by the successor corporation or parent thereof or replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation or parent thereof or (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on any Option Shares for which
this option is not otherwise at that time exercisable (the excess of the Fair
Market Value of those Option Shares over the aggregate Option Price payable for
such shares) and provides for subsequent pay-out in accordance with the same
vesting schedule in effect for those Option Shares pursuant to the option
exercise schedule set forth in the Grant Notice. The determination of option
comparability under clause (i) shall be made by the Plan Administrator, and such
determination shall be final, binding and conclusive.
B. The portion of this option accelerated in connection with
any Corporate Transaction shall remain exercisable as an incentive stock option
under the Federal tax laws (if the option is designated as such in the Grant
Notice) only to the extent the applicable dollar limitation of Paragraph 17 is
not exceed in the calendar year of such Corporate Transaction.
C. This option, to the extent not previously exercised, shall
terminate upon the consummation of such Corporate Transaction and cease to be
outstanding, unless it is expressly assumed by the successor corporation or
parent thereof.
D. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. Adjustment in Option Shares.
A. In the event any change is made to the Common Stock
issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class effected without the
Corporation's receipt of consideration, the Plan Administrator shall make
appropriate adjustments to (i) the number and/or class of securities subject to
this option and (ii) the Option Price payable per share in order to prevent any
dilution or enlargement of benefits hereunder. Such adjustments shall be final,
binding and conclusive.
B. If this option is to be assumed in connection with any
Corporate Transaction under Paragraph 6 or is otherwise to continue outstanding,
then this option shall, immediately after such Corporate Transaction, be
appropriately adjusted to apply and pertain to the number and class of
securities which would have been issued to Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the Option
Price payable per share, provided the aggregate Option Price payable hereunder
shall remain the same.
8. Privilege of Stock Ownership. The holder of this option
shall not have any of the rights of a shareholder with respect to the Option
Shares until such individual shall have exercised the option and paid the Option
Price for the purchased Option Shares.
9. Manner of Exercising Option.
A. In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Deliver to the Corporate Secretary of the
Corporation an executed notice of exercise in substantially the form of
Exhibit I to this Agreement (the "Exercise Notice") in which there is
specified the number of Option Shares which are to be purchased under
the exercised option.
(ii) Pay the aggregate Option Price for the purchased
shares through one or more of the following alternatives:
- full payment in cash or by check payable to the
Corporation's order;
- full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date (as those terms are defined below);
- full payment in a combination of shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation's reported earnings and valued at Fair Market Value on the
Exercise Date and cash or check payable to the Corporation's order; or
- full payment effected through a broker-dealer sale
and remittance procedure pursuant to which Optionee (I) shall provide
irrevocable instructions to a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Option Price payable for the
purchased shares plus all applicable Federal, State and local income
taxes and employment taxes required to be withheld in connection with
such purchase and (II) shall provide directives to the Corporation to
deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date shall be
the date on which the executed Exercise Notice shall have been delivered to the
Corporation. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the option exercise, payment of the Option
Price for the purchased shares must accompany such Exercise Notice. For all
valuation purposes under this Agreement, the Fair Market Value per share of
Common Stock on any relevant date shall be the closing selling price per share
of Common Stock on the date in question, as such price is reported by the
National Association of Securities Dealers on the Nasdaq National Market. If
there is no such reported price on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which
such quotation exists.
C. As soon as practical after receipt of the Exercise Notice,
the Corporation shall mail or deliver to or on behalf of Optionee (or any other
person or persons exercising this option in accordance herewith) a certificate
or certificates representing the purchased Option Shares.
D. In no event may this option be exercised for any fractional
shares.
10. Governing Law. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
11. Compliance with Laws and Regulations. The exercise of this
option and the issuance of Option Shares upon such exercise shall be subject to
compliance by the Corporation and Optionee with all applicable requirements of
law relating thereto and with all applicable regulations of any stock exchange
on which shares of the Corporation's Common Stock may be listed at the time of
such exercise and issuance.
12. Successors and Assigns. Except to the extent otherwise
provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to
the benefit of, and be binding
upon, the successors, administrators, heirs and legal representatives of
Optionee and the successors and assigns of the Corporation.
13. Liability of Corporation. The inability of the Corporation
to obtain approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of any Common Stock
pursuant to this option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Corporation however, shall use its
best efforts to obtain all such approvals.
14. No Employment/Service Contract. Nothing in this Agreement
or in the Plan shall confer upon Optionee any right to continue in the Service
of the Corporation (or any parent or subsidiary employing or retaining Optionee)
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any such parent or subsidiary) or
Optionee, which rights are hereby expressly reserved by each party, to terminate
Optionee's Service at any time for any reason whatsoever, with or without cause.
15. Notices. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation in care of the Corporate Secretary at the
Corporation's principal offices at 0000 Xxxxxx Xxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
00000. Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated on the Grant Notice.
All notices shall be deemed to have been given or delivered upon personal
delivery or upon deposit in the U.S. mail, by registered or certified mail,
postage prepaid and properly addressed to the party to be notified.
16. Construction. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the express terms and provisions of the Plan. All decisions of
the Plan Administrator with respect to any question or issue arising under the
Plan or this Agreement shall be conclusive and binding on all persons having an
interest in this option.
17. Additional Terms Applicable to an Incentive Stock Option.
In the event this option is designated an incentive stock option in the Grant
Notice, the following terms and conditions shall also apply to the grant:
A. This option shall cease to qualify for favorable tax
treatment as an incentive stock option under the Federal tax
laws if (and to the extent) this option is exercised for one
or more Option Shares: (i) more than three (3) months after
the date Optionee ceases to be an Employee for any reason
other than death or permanent disability (as defined in
Paragraph 5) or (ii) more than one (1) year after the date
Optionee ceases to be an Employee by reason of permanent
disability.
B. If this option is to become exercisable in a series of
installments as indicated in the Grant Notice, no such
installment shall qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to
the extent) the aggregate Fair Market Value (determined at the
Grant Date) of the Corporation's Common Stock for which such
installment first becomes exercisable hereunder will, when
added to the aggregate fair market value (determined as of the
respective date or dates of grant) of the Common Stock or
other securities for which this option or one or more other
incentive stock options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the
Corporation or any parent or subsidiary) first become
exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the
number of shares of Common Stock for which this option first
becomes exercisable in any calendar year exceed the applicable
One Hundred Thousand Dollar ($100,000) limitation, the option
may nevertheless be exercised for those excess shares in such
calendar year as a non-statutory option.
C. Should the exercisability of this option be accelerated
upon a Corporate Transaction in accordance with Paragraph 6,
then this option shall qualify for favorable tax treatment as
an incentive stock option under the Federal tax laws only to
the extent the aggregate Fair Market Value (determined at the
Grant Date) of the Corporation's Common Stock for which this
option first becomes exercisable in the calendar year in which
the Corporate Transaction occurs does not, when added to the
aggregate fair market value (determined as of the respective
date or dates of grant) of the Common Stock or other
securities for which this option or one or more other
incentive stock options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the
Corporation or any parent or subsidiary) first become
exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the
number of shares of Common Stock for which this option first
becomes exercisable in the calendar year of such Corporate
Transaction exceed the applicable One Hundred Thousand Dollar
($100,000) limitation, the option may nevertheless be
exercised for the excess shares in such calendar year as a
non-statutory option.
D. Should the Optionee hold, in addition to this option, one
or more other options to purchase Common Stock which become
exercisable for the first time in the same calendar year as
this option, then the foregoing limitations on the
exercisability of such options as incentive stock options
under the Federal tax laws shall be applied on the basis of
the order in which such options are
granted.
E. To the extent this option should fail to qualify as an
incentive stock option under the Federal tax laws, Optionee
will recognize compensation income in connection with the
acquisition of one or more Option Shares hereunder, and
Optionee must make appropriate arrangements for the
satisfaction of all Federal, State or local income and
employment tax withholding requirements applicable to such
compensation income.
18. Additional Terms Applicable to a Non-Statutory Stock
Option. In the event this option is designated a non-statutory stock option in
the Grant Notice, Optionee shall make appropriate arrangements with the
Corporation or any parent or subsidiary employing Optionee for the satisfaction
of all Federal, State or local income tax and employment tax withholding
requirements applicable to the exercise of this option.
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify QRS Corporation (the "Corporation") that I
elect to purchase _____ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $_____ per share (the "Option Price")
pursuant to that certain option (the "Option") granted to me under the
Corporation's 1993 Stock Option/Stock Issuance Plan on_____________, 199__.
Concurrently with the delivery of this Exercise Notice to the
Corporate Secretary of the Corporation, I shall hereby pay to the Corporation
the Option Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Option Price for the Purchased Shares.
______________, 199__
Date
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Optionee
Address:
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Print name in exact manner
it is to appear on the
stock certificate:
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Address to which certificate
is to be sent, if different
from address above:
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Social Security Number:
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Employee Number:
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