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EXHIBIT 10.7
DATE OF GRANT: _______________________
AREMISSOFT CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THE AREMISSOFT CORPORATION 1998 STOCK OPTION PLAN (THE "PLAN"),
INCORPORATED HEREIN. A COPY OF THE PLAN CAN BE OBTAINED FROM THE COMPANY UPON
REQUEST OF THE HOLDER HEREUNDER. THE GRANT OF THIS OPTION SHALL NOT IMPOSE AN
OBLIGATION UPON THE OPTIONEE TO EXERCISE THIS OPTION.
THIS OPTION AGREEMENT (the "Agreement") is made by and between
AremisSoft Corporation, a Delaware corporation (the "Company") and
_____________________________ ("Optionee"), as of ____________,_________.
In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee, in the manner and,
subject to the conditions hereinafter provided, the right, privilege and option
to purchase (the "Option") an aggregate of ______________________________
(__________) shares of the Company's common stock, $.001 par value, (the
"Shares" or "Common Stock"). This Option is specifically conditioned on
compliance with the terms and conditions set forth herein.
2. TERM OF OPTION. Subject to the terms, conditions and restrictions set forth
herein, the term of this Option shall be ten (10) years from the date of grant
(the "Expiration Date"). Any portion of this Option not exercised prior to the
Expiration Date shall thereupon become null and void.
3. EXERCISE OF OPTION.
3.1. VESTING OF OPTION. This Option shall become exercisable as follows:
Number of Shares Vesting Date
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Each of the foregoing dates shall be referred to as a "Vesting Date" for that
portion of this Option vested on such date ("Vested Portion").
All or any portion of the Shares underlying a Vested Portion of this
Option may be purchased during
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the term of this Option, but not as to less than 100 Shares (unless the
remaining Shares then constituting the Vested Portion of this Option is less
than 100 Shares) at any time.
3.2. MANNER OF EXERCISE. The Vested Portion of this Option may be
exercised from time to time, in whole or in part, by presentation of a "Request
To Exercise Form," substantially in the form attached hereto, to the Company at
its principal office, which form must be duly executed by Optionee and
accompanied by payment, in cash, to the Company, in the aggregate amount of the
Exercise Price (as defined below), multiplied by the number of Shares the
Optionee is purchasing at such time, subject to reduction for withholding for
tax obligations as provided in Section 13.
Upon receipt and acceptance by the Company of such form accompanied by
the payment specified, the Optionee shall be deemed to be the record owner of
the Shares purchased, notwithstanding that the stock transfer books of the
Company may then be closed or that certificates representing the Shares
purchased under this Option may not then be actually delivered to the Optionee.
3.3. EXERCISE PRICE. The exercise price (the "Exercise Price") payable
upon exercise of this Option shall be $_____ per Share.
4. EXERCISE AFTER CERTAIN EVENTS.
4.1. TERMINATION OF EMPLOYMENT. If for any reason other than permanent
and total disability (as defined below) or death, an Optionee ceases to be
employed by the Company, Options held at the date of such termination (to the
extent then exercisable) may be exercised, in whole or in part, at any time
within three (3) months after the date of such termination or such lesser period
specified in the Option Agreement (but in no event after the expiration date of
the Option).
4.2. PERMANENT DISABILITY AND DEATH. If an Optionee becomes permanently
and totally disabled (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended), or dies while employed by the Company, (or if
the Optionee dies within the period that the Option remains exercisable after
termination of employment or affiliation), Options then held (to the extent then
exercisable) may be exercised by the Optionee, the Optionee's personal
representative, or by the person to whom the Option is transferred by will or
the laws of descent and distribution, in whole or in part, at any time within
one (1) year after the disability or death (but in no event after the expiration
date of the Option).
5. RESTRICTIONS ON TRANSFER OF OPTION. This Option is not transferable by
Optionee other than by will or the laws of descent and distribution and is
exercisable only by the Optionee during his or her lifetime except as provided
in Section 4.2. above. In accordance with the Plan, the Option and the Shares
underlying the Option shall not be available for the debts or obligations of the
Optionee, nor shall it be subject to disposition by transfer, alienation, pledge
or other means of disposition, whether voluntary or involuntary, or by operation
of law through judgment, levy, attachment, garnishment or other legal proceeding
(including bankruptcy).
6. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. The existence of this Option shall
not affect the Company's right to effect adjustments, recapitalizations,
reorganizations or other changes in its or any other corporation's capital
structure or business, any merger or consolidation, any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Shares, the dissolution or liquidation of the Company's or any other
corporation's assets or business, or any other corporate act, whether similar to
the
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events described above or otherwise. If the outstanding Shares of the Company's
Common Stock are increased or decreased in number or changed into or exchanged
for a different number or kind of securities of the Company or any other
corporation by reason of a recapitalization, reclassification, stock split,
reverse stock split, combination of shares, stock dividend or other similar
event, an appropriate adjustment of the number and kind of securities with
respect to which this Option may be exercised and the exercise price at which
this Option may be exercised will be made.
7. DISSOLUTION, LIQUIDATION AND MERGER.
7.1. COMPANY NOT THE SURVIVOR. In the event of a dissolution or
liquidation of the Company, a merger, consolidation, combination or
reorganization in which the Company is not the surviving corporation, or a sale
of substantially all of the assets of the Company (as determined in the sole
discretion of the Board of Directors), the Administrator, in its absolute
discretion, may cancel each outstanding Option upon payment in cash to the
Optionee of the amount by which any cash and the fair market value of any other
property which the Optionee would have received as consideration for the Shares
of Common Stock covered by the Option if the Option had been exercised before
such liquidation, dissolution, merger, consolidation or sale, exceeds the
exercise price of the Option. In addition to the foregoing, in the event of a
dissolution or liquidation of the Company, or a merger, consolidation,
combination or reorganization, in which the Company is not the surviving
corporation, the Administrator, in its absolute discretion, may accelerate the
time within which each outstanding Option may be exercised.
7.2. COMPANY IS THE SURVIVOR. In the event of a merger, consolidation,
combination or reorganization in which the Company is the surviving corporation,
the Board of Directors shall determine the appropriate adjustment of the number
and kind of securities with respect to which outstanding Options may be
exercised, and the exercise price at which outstanding Options may be exercised.
The Board of Directors shall determine, in its sole and absolute discretion,
when the Company shall be deemed to survive for purposes of this Plan.
8. RESERVATION OF SHARES. The Company agrees that prior to the earlier of the
expiration of this Option and the exercise and purchase of the total number of
Shares represented by this Option, there shall be reserved for issuance and
delivery upon exercise of this Option such number of the Company's authorized
and unissued Shares as shall be necessary to satisfy the terms and conditions of
this Agreement.
9. NO RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a shareholder
with respect to any Shares covered by this Option unless the Optionee shall have
exercised this Option, and then only with respect to the Shares underlying the
portion of the Option exercised. The Optionee shall have no right to vote any
Shares, or to receive distributions of dividends or any assets or proceeds from
the sale of Company assets upon liquidation until Optionee has effectively
exercised this Option and fully paid for such Shares. Subject to Section 6, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date title to the Shares has been acquired by the Optionee.
10. NO RIGHTS TO EMPLOYMENT OR CONTINUED EMPLOYMENT. The grant of this Option
shall in no way be construed so as to confer on Optionee the rights to
employment or continued employment by the Company. Nothing in the Plan or
hereunder shall confer upon any Optionee any right to employment or to continue
in the employ of the Company, or to interfere with or restrict in any way the
rights of the Company, which are hereby expressly reserved, to terminate or
discharge any Optionee at any time for any reason whatsoever, with or without
cause.
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11. SUSPENSION AND TERMINATION. In the event the Board or the Administrator
reasonably believes that the Optionee has committed an act of misconduct
specified below, the Administrator may suspend the Optionee's right to exercise
any Option pending final determination by the Board or the Administrator, which
final determination shall be made within five (5) business days of such
suspension. If the Administrator determines that an Optionee has committed an
act of embezzlement, fraud, breach of fiduciary duty, or deliberate disregard of
the Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company,
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any Option hereunder. In making such determination, the
Board or the Administrator shall act fairly and in good faith and shall give the
Optionee an opportunity to appear and present evidence on the Optionee's behalf.
12. PARTICIPATION IN OTHER OPTION PLANS. The grant of this Option shall not
prevent Optionee from participating or being granted other options in the same
or other plans; provided, however, that the Optionee meets the eligibility
requirements, and such participation or grant does not prevent the other plan
from meeting the requirements of the Internal Revenue Code of 1986, as amended.
13. PAYMENT OF TAXES. Unless the Administrator of the Plan permits otherwise,
the Optionee shall pay the Company in cash all local, state and federal
withholding taxes applicable, in the Administrator's absolute discretion, to the
grant or exercise of this Option, or the transfer or other disposition of Shares
acquired upon exercise of this Option. Any such payment must be made promptly
when the amount of such obligation becomes determinable. The Administrator may,
in lieu of such cash payment, withhold that number of Shares sufficient to
satisfy such withholding.
14. ISSUE AND TRANSFER TAX. The Company will pay all issuance taxes, if any,
attributable to the initial issuance of Shares upon the exercise of the Option;
provided, however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue or
delivery of any certificates for Shares in a name other than that of the
Optionee.
15. ARBITRATION. Any controversy, dispute or claim arising out of or relating to
this Option which cannot be amicably settled including, but not limited to, the
suspension or termination of Optionee's right in accordance with Section 11
above, shall be settled by arbitration. Said arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association at a time and place as selected by the arbitrator(s).
15.1. INITIATION OF ARBITRATION. After seven (7) days prior written
notice to the other, either party hereto may formally initiate arbitration under
this Agreement by filing a written request therefor, and paying the appropriate
filing fees, if any.
15.2. HEARING AND DETERMINATION DATES. The hearing before the arbitrator
shall occur within thirty (30) days from the date the matter is submitted to
arbitration. Further, a determination by the arbitrator shall be made within
forty-five (45) days from the date the matter is submitted to arbitration.
Thereafter, the arbitrator shall have fifteen (15) days to provide the parties
with his or her decision in writing. However, any failure to meet the deadlines
in this section will not affect the validity of any decision or award.
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15.3. BINDING NATURE OF DECISION. The decision of the arbitrator shall
be binding on the parties. Judgment thereon shall be entered in a court of
competent jurisdiction.
15.4. INJUNCTIVE ACTIONS. Nothing herein contained shall bar the right
of either party to seek to obtain injunctive relief or other provisional
remedies against threatened or actual conduct that will cause loss or damages
under the usual equity rules including the applicable rules for obtaining
preliminary injunctions and other provisional remedies.
15.5. COSTS. The cost of arbitration, including the fees of the
arbitrator, shall initially be borne equally by the parties; provided, the
prevailing party shall be entitled to recover such costs, in addition to
attorneys' fees and other costs, in accordance with Section 18 of this
Agreement.
16. NOTICES. All notices to be given by either party to the other shall be in
writing and may be transmitted by personal delivery, facsimile transmission,
overnight courier or mail, registered or certified, postage prepaid with return
receipt requested; provided, however, that notices of change of address or telex
or facsimile number shall be effective only upon actual receipt by the other
party. Notices shall be delivered at the following addresses, unless changed as
provided for herein:
To the Optionee:
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To the Company:
Mr.
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AREMISSOFT CORPORATION
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Telephone: 916/000-0000
Facsimile: 916/________
17. APPLICABLE LAW. This Option and the relationship of the parties in
connection with its subject matter shall be governed by, and construed under,
the laws of the state of Delaware.
18. ATTORNEYS FEES. In the event of any litigation, arbitration or other
proceeding arising out of this Option, the prevailing party shall be entitled to
an award of costs, including an award of reasonable attorneys' fees. Any
judgment, order or award entered in any such proceeding shall designate a
specific sum as such an award of attorneys' fees and costs incurred. This
attorneys' fee provision is intended to be severable from the other provisions
of this Agreement, shall survive any judgment or order entered in any
proceeding, and shall not be deemed merged into any such judgment or order, so
that such further fees and costs as may be incurred in the enforcement of an
award or judgment or in defending it on appeal shall likewise be recoverable by
further order of a court or panel or in a separate action as may be appropriate.
19. BINDING EFFECT. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto
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and their respective heirs, executors and successors.
20. TAX EFFECT. The federal tax consequences of stock options are complex and
subject to change. Each person should consult with his or her tax advisor before
exercising any Option or disposing of any Shares acquired upon the exercise of
an Option.
IN WITNESS WHEREOF, this Option Agreement has been executed on the ____
day of _________________, _______, at Sacramento, California.
AREMISSOFT CORPORATION
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REQUEST TO EXERCISE FORM
Dated:___________________________
The undersigned hereby irrevocably elects to exercise all or part, as
specified below, of the Vested Portion of the option granted to him or her
pursuant to that certain Non-qualified Stock Option Agreement effective
_____________________, between the undersigned and AremisSoft Corporation (the
"Company") to purchase an aggregate of __________________ (________) shares of
the Company's common stock, $.001 par value (the "Shares").
The undersigned hereby tenders cash in the amount of $__________ per
Share multiplied by ________________________________ (___________), the number
of Shares he is purchasing at this time, for a total of $______________, which
constitutes full payment of the total exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF SHARES
IN COMPANY'S TRANSFER BOOKS
Name:
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(Please typewrite or print in block letters)
Address:
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Signature:
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Accepted by AremisSoft Corporation:
By:
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Name
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Title
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