Exhibit 99.8
NON-QUALIFIED STOCK OPTION AGREEMENT
This NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is entered
into as of March 15, 2005 by and between VERSO TECHNOLOGIES, INC., a Minnesota
corporation (the "Company"), and Xxxxxxxxxx Xxxxxxxxx ("Optionee"), and
effective as of November 19, 2004 (the "Date of Grant").
WITNESSETH
WHEREAS, the Board of Directors of the Company (the "Board") desires to
give Optionee an inducement to acquire a proprietary interest in the Company and
an added incentive to advance the interests of the Company by granting to
Optionee an option to purchase shares of common stock of the Company, par value
$.01 per share (the "Common Stock"); and
WHEREAS, Board desires to memorialize the grant of the Option (as defined
below) to the Optionee made on the Date of Grant;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties hereto hereby agree as follows:
I. DEFINITIONS.
For purposes of this Agreement, the following terms will have the meanings
set forth below, unless the context clearly otherwise requires:
"Change of Control" means:
(i) the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a person or entity that
is not controlled by the Company;
(ii) the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;
(iii) any person becomes after the Date of Grant a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act ), directly or indirectly, of
(a) 20% or more, but less than 50%, of the combined voting power of the
Company's outstanding securities ordinarily having the right to vote at
elections of directors, unless the transaction resulting in such ownership has
been approved in advance by the Incumbent Directors, or (b) 50% or more of the
combined voting power of the Company's outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any approval by the
Incumbent Directors);
(iv) a merger or consolidation to which the Company is a party if the
shareholders of the Company immediately prior to effective date of such merger
or consolidation have "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act), immediately
following the effective date of such merger or consolidation, of securities of
the surviving corporation representing (a) more than 50%, but less than 80%, of
the combined voting power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of directors, unless
such merger or consolidation has been approved in advance by the Incumbent
Directors, or (b) 50% or less of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right to vote at
elections of directors (regardless of any approval by the Incumbent Directors);
(v) the Incumbent Directors cease for any reason to constitute at
least a majority of the Board; or
(vi) any other change in control of the Company of a nature that would
be required to be reported pursuant to Section 13 or 15(d) of the Exchange Act,
whether or not the Company is then subject to such reporting requirements.
"Code" means the Internal Revenue Code of 1986, as amended.
"Disability" means the disability of Optionee such as would entitle
Optionee to receive disability income benefits pursuant to the long-term
disability plan of the Company or Subsidiary then covering Optionee or, if no
such plan exists or is applicable to Optionee, the permanent and total
disability of Optionee within the meaning of Section 22(e)(3) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Incumbent Directors" means any individuals who are members of the Board on
the Date of Grant and any individual who subsequently becomes a member of the
Board whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the Incumbent Directors (either
by specific vote or by approval of the Company's proxy statement in which such
individual is named as a nominee for director without objection to such
nomination).
"Retirement" means termination of employment or service pursuant to and in
accordance with the regular (or, if approved by the Board, early)
retirement/pension plan or practice of the Company or Subsidiary then covering
Optionee, provided that if Optionee is not covered by any such plan or practice,
Optionee will be deemed to be covered by the Company's plan or practice for
purposes of this determination.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any entity that is directly or indirectly controlled by
the Company or any entity in which the Company has a significant equity
interest, as determined by the Board.
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II. GRANT OF OPTION.
A. Option and Option Shares. The Company hereby grants to Optionee the
right, privilege and option (the "Option") to purchase 250,000 shares (the
"Option Shares") of Common Stock according to the terms and subject to the
conditions hereinafter set forth. The Option is a "non-qualified stock option,"
and the Option is not intended to be an "incentive stock option" within the
meaning of Section 422 of the Code.
B. Adjustment of Option. In the event of any reorganization, merger,
consolidation, recapitalization, reclassification, stock dividend, stock split,
rights offering, divestiture or extraordinary dividend (including a spin-off) or
any other change in the corporate structure or shares of the Company, the Board
(or, if the Company is not the surviving corporation in any such transaction,
the board of directors of the surviving corporation) will make appropriate
adjustment (which determination will be conclusive) as to, in order to prevent
dilution or enlargement of the rights of Optionee hereunder, (i) the number and
kind of securities or other property (including cash) issuable upon exercise of
the Option, and (ii) the exercise price of the Option.
III. OPTION EXERCISE PRICE.
The exercise price to be paid by Optionee upon exercise of the Option or
any portion thereof shall be $0.69 per Option Share purchased (the "Exercise
Price").
IV. EXERCISABILITY AND EXPIRATION OF OPTION.
A. Exercisability.
(i) The Option shall vest and first become exercisable with respect to
25% of the Option Shares on each of November 19, 2005, November 19, 2006,
November 19, 2007 and November 19, 2008, and once vested, shall be exercisable
any time thereafter until the Expiration Date (as defined below).
(ii) Notwithstanding anything herein to the contrary, upon a Change of
Control the Option will become immediately exercisable in full and will remain
exercisable through the Expiration Date, regardless of whether the Optionee to
whom such Options have been granted remains in the employ or service of the
Company or any Subsidiary.
B. Expiration. In no event shall the Option be exercisable after, and this
Option shall become void and expire as to all unexercised Option Shares at,
11:59 p.m. Eastern Time on November 19, 2014 (the "Expiration Date"), unless the
Option shall be sooner terminated as provided herein.
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C. Termination of Employment.
(i) In the event Optionee's employment with the Company and all
Subsidiaries is terminated by reason of death, Disability or Retirement, the
Option will remain exercisable for a period of one (1) year after such
termination (but in no event may the Option be exercised after the Expiration
Date), at which time the Option shall terminate to the extent not then
exercised.
(ii) In the event Optionee's employment with the Company and all
Subsidiaries is terminated for any reason other than death, Disability or
Retirement, or Optionee is in the employ or service of a Subsidiary and the
Subsidiary ceases to be a Subsidiary of the Company (unless Optionee continues
in the employ or service of the Company or another Subsidiary), all rights of
Optionee hereunder will immediately terminate without notice of any kind, and
the Option will not thereafter be exercisable; provided, however, that (a) if
such termination is due to any reason other than termination by the Company or
any Subsidiary for "cause," the Option will remain exercisable for a period of
three (3) months after such termination (but in no event may the Option be
exercised after the Expiration Date), and (b) if such termination is due to
termination by the Company or any Subsidiary for "cause", the Option will remain
exercisable as of such termination for a period of one (1) month after such
termination (but in no event may the Option be exercised after the Expiration
Date.
(iii) For purposes of this Section IV.C., "cause" (as determined by
the Board) will be as defined in any employment or other agreement or policy
applicable to Optionee or, if no such agreement or policy exists, will mean (a)
fraud, misrepresentation, embezzlement or deliberate injury or attempted injury,
in each case related to the Company or any Subsidiary, (b) any unlawful or
criminal activity of a serious nature, (c) any intentional and deliberate breach
of a duty or duties that, individually or in the aggregate, are material in
relation to Optionee's overall duties, or (d) any material breach of any
employment, service or noncompete agreement entered into with the Company or any
Subsidiary.
(iv) Unless the Board otherwise determines in its sole discretion,
Optionee's employment will be deemed to have terminated on the date recorded on
the personnel or other records of the Company or the Subsidiary for which
Optionee provides employment, determined by the Board in its sole discretion
based upon such records.
V. MANNER OF OPTION EXERCISE.
A. Notice. This Option may be exercised by Optionee in whole or in part
from time to time, subject to the conditions contained herein, by delivery in
person, by facsimile, electronic transmission or through the mail, of written
notice of exercise to the Company at its office at 000 Xxxxxxxx Xxxxxxx Xxxxx
000, Xxxxxxx, XX 00000, or such other office as the Company may designate
(Attention: Chief Financial Officer), and by paying in full the total exercise
price for the Option Shares purchased. The notice of Option exercise shall be in
the form determined from time to time by the Board. As soon as practicable after
such notice and payment are received, and subject to the terms hereof, the
Optionee shall be recorded on the books of the
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Company as the owner of the Option Shares purchased and the Company shall
deliver to Optionee one or more duly issued stock certificates evidencing such
ownership.
B. Payment. At the time of exercise of the Option, Optionee shall pay the
total exercise price of the Option Shares to be purchased in cash.
C. Payment of Withholding Taxes. As a condition of exercise of the Option,
the Company may, in its sole discretion, withhold and deduct from future wages
of Optionee (or from other amounts that may be due and owing to Optionee from
the Company or a Subsidiary), or require Optionee to pay or reimburse the
Company, for all legally required amounts necessary to satisfy any and all
federal, state and local withholding and employment-related tax requirements
attributable to any taxes which the Company determines are required to be
withheld in connection with the grant or any exercise of the Option.
VI. NONTRANSFERABILITY.
This Agreement shall not be assignable or transferable by Optionee
otherwise than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order, and the Option shall not be exercised by any
person other than Optionee (or Optionee's personal representative or
attorney-in-fact) during Optionee's lifetime. After the death of Optionee, the
person to whom Optionee's rights hereunder pass under Optionee's will or under
the laws of descent and distribution shall be deemed the holder of the Option.
Any attempt to transfer this Option except as authorized by this Section VI.
shall void this Option.
VII. LIMITATION OF RIGHTS.
A. Employment of Optionee. Nothing in this Agreement shall be construed to
be evidence of any agreement or understanding, express or implied, that the
Company or any of its Subsidiaries will employ Optionee in any particular
position at any particular rate of compensation or for any particular period of
time, and nothing herein will interfere with or limit in any way the right of
the Company or any Subsidiary to terminate the employment or service of Optionee
at any time.
B. Rights as a Shareholder. As a holder of the Option, Optionee will have
no rights as a shareholder of the Company unless and until the Option is
exercised for, or paid in the form of, Common Stock and Optionee becomes the
holder of record of such shares.
VIII. SECURITIES LAWS AND OTHER RESTRICTIONS.
Notwithstanding any other provision hereof, the Company will not be
required to issue any Option Shares, and Optionee may not sell, assign, transfer
or otherwise dispose of any Option Shares issued upon exercise of the Option,
unless (i) there is in effect with respect to such shares a registration
statement under the Securities Act and any applicable state securities laws or
an exemption from such registration under the Securities Act and applicable
state securities laws, and (ii) there has been obtained any other consent,
approval or permit from any other regulatory
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body which the Board, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing Option Shares, as may be deemed
necessary or advisable by the Company in order to comply with such securities
law or other restrictions.
IX. MISCELLANEOUS.
A. Governing Law. This Agreement and all rights and obligations hereunder
shall be governed by the laws of the State of Georgia, without regard to its
principles of conflicts of laws.
B. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.
C. Investment Intent. Optionee hereby represents that all Option Shares
purchased by Optionee pursuant to the exercise of all or any portion of the
Option will be acquired only for investment and not with a view to distribution
or resale.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed effective the day and year first above
written.
VERSO TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Chief Financial Officer
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OPTIONEE
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Xxxxxxxxxx Xxxxxxxxx
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