EXHIBIT 99.3
DTM CORPORATION
STOCK OPTION AGREEMENT
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RECITALS
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A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), 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 an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Corporation hereby grants to Optionee, as of
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the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in paragraph 2 at the Exercise Price.
2. Option Term. This option shall have a maximum term of ten (10)
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years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. Limited Transferability.
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(a) This option shall be neither transferable nor assignable by
Optionee other than by will or the laws of inheritance following Optionee's
death and may be exercised, during Optionee's lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon Optionee's death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee's death.
(b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may be assigned in whole or in part during
Optionee's lifetime pursuant to a domestic relations order or to one or more
members of Optionee's immediate family or to a trust established for the
exclusive benefit of one or more such family members. The assigned portion shall
be exercisable only by the person or persons who acquire a proprietary interest
in the option pursuant to such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for this option immediately prior
to such assignment.
4. Dates of Exercise. This option shall become exercisable for the
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Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such 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 6.
5. Cessation of Service. The option term specified in Paragraph 2 shall
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terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability, Retirement or Misconduct) while this
option is outstanding, then this option shall remain exercisable until the
earlier of (i) the expiration of the three (3)-month period measured from the
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date of such cessation of Service or (ii) the Expiration Date.
(ii) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of
inheritance shall have the right to exercise this option. However, if Optionee
has designated one or more beneficiaries of this option, then those persons
shall have the exclusive right to exercise this option following Optionee's
death. Any such right to exercise this option shall lapse, and this option
shall cease to be outstanding, upon the earlier of (i) the expiration of the
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twelve (12)-month period measured from the date of Optionee's death or (ii)
the Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent
Disability or Retirement while this option is outstanding, then this option
shall remain exercisable until the earlier of (i) the expiration of the twelve
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(12)-month period measured from the date of such cessation of Service or (ii)
the Expiration Date.
(iv) During the applicable post-Service exercise period, this
option may not be exercised in the aggregate for more than the number of
vested Option Shares for which the option is exercisable on the date of
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for which
the option has not been exercised. However, this option shall, immediately
upon Optionee's cessation of Service for any reason, terminate and cease to be
outstanding to the extent this option is not otherwise at that time
exercisable for vested shares.
(v) Should Optionee's Service be terminated for Misconduct or
should Optionee engage in Misconduct while this option is outstanding, then
this option shall terminate immediately and cease to be outstanding.
(vi) In the event of a Change in Control, the provisions of
Paragraph 6 shall govern the period for which this option is to remain
exercisable
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following Optionee's cessation of Service and shall supersede any provisions
to the contrary in this Paragraph.
6. Change in Control.
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(a) This option, to the extent outstanding at the time of a Change in
Control but not otherwise fully exercisable, shall automatically accelerate so
that this option shall, immediately prior to the effective date of such Change
in Control, become exercisable for all of the Option Shares at the time subject
to this option and may be exercised for any or all of those option shares as
fully vested shares of Common Stock. No such acceleration of this option shall
occur, however, if and to the extent: (i) this option is, in connection with the
Change in Control, assumed or otherwise continued in full force and effect by
the successor corporation (or parent thereof) pursuant to the terms of the
Change in Control or (ii) this option is replaced with a cash incentive program
of the successor corporation which preserves the spread existing at the time of
the Change in Control on the shares of Common Stock for which this option is not
otherwise at that time exercisable (the excess of the Fair Market Value of those
shares over the Exercise Price payable for such shares) and provides for
subsequent pay-out in accordance with the Exercise Schedule set forth in the
Grant Notice.
(b) Immediately following the consummation of the Change in Control,
this option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) or otherwise expressly
continued in full force and effect pursuant to the terms of the Change in
Control.
(c) If this option is assumed in the Change in Control, then this
option shall be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of the Change in Control if the option had
been exercised immediately prior to such Change in Control, and the appropriate
adjustments shall also be made to the Exercise Price; provided the aggregate
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Exercise Price shall remain the same.
(d) To the extent this option does not accelerate in connection with
a Change in Control, the option shall continue, over Optionee's period of
Service after the Change in Control, to become exercisable for the Option Shares
in one or more installments in accordance with the Exercise Schedule set forth
in the Grant Notice. However, immediately upon an Involuntary Termination of
Optionee's Service within twelve (12) months following such Change in Control,
this option, to the extent outstanding at that time but not otherwise fully
exercisable, shall automatically accelerate so that the option shall become
immediately exercisable for all the Option Shares at the time subject to the
option and may be exercised for any or all of those Option Shares as fully
vested shares of Common Stock. The option as so accelerated shall remain so
exercisable until the earlier of (i) the Expiration Date or (ii) the
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expiration of the one (1)-year period measured from the date of Optionee's
Involuntary Termination.
(e) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure
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or to merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
7. Adjustment in Option Shares. Should any change be made to the Common
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Stock 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 without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. Shareholder Rights. The holder of this option shall not have any
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shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. Manner of Exercising Option. In order to exercise this option with
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respect to all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising the
option) must take the following actions:
(i) Execute and deliver to the Corporation a Notice of Exercise
for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) a promissory note payable to the Corporation, but only
to the extent authorized by the Plan Administrator in accordance
with Paragraph 13;
(C) shares of Common Stock held by Optionee (or any other
person or persons exercising the option) 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; or
(D) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
instructions (I) to a Corporation-approved 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 Exercise
Price payable for the purchased shares plus all applicable income
and employment taxes required to be withheld by the Corporation
by reason of such exercise and (II) to the Corporation to deliver
the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
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Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.
(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.
(iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. Compliance with Laws and Regulations.
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(a) The exercise of this option and the issuance of the 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 (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) 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.
11. Successors and Assigns. Except to the extent otherwise provided
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in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee and Optionee's assigns and beneficiaries.
12. Notices. Any notice required to be given or delivered to the
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Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. Financing. The Plan Administrator may, in its absolute
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discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased
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Option Shares by delivering a full-recourse promissory note payable to the
Corporation. The terms of any such promissory note (including the interest
rate, the requirements for collateral and the terms of repayment) shall be
established by the Plan Administrator in its sole discretion.
14. Construction. This Agreement and the option evidenced hereby are
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made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms 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.
15. Governing Law. The interpretation, performance and enforcement
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of this Agreement shall be governed by the laws of the State of Texas without
resort to that State's conflict-of-laws rules.
16. Excess Shares. If the Option Shares covered by this Agreement
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exceed, as of the Grant Date, the number of shares of Common Stock which may
without shareholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
17. Additional Terms Applicable to an Incentive Option. In the event
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this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is
exercised for one or more Option Shares: (A) more than three (3) months
after the date Optionee ceases to be an Employee for any reason other than
death or Permanent Disability or (B) more than twelve (12) months after the
date Optionee ceases to be an Employee by reason of Permanent Disability.
(ii) No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common
Stock for which such installment first becomes exercisable hereunder would,
when added to the aggregate value (determined as of the respective date or
dates of grant) of the Common Stock or other securities for which this
option or any other Incentive 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 such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, this option shall nevertheless
become exercisable for the excess shares in such calendar year as a Non-
Statutory Option.
(iii) Should the exercisability of this option be accelerated
upon a Change in Control, then this option shall qualify for favorable tax
treatment as an
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Incentive Option only to the extent the aggregate Fair Market Value
(determined at the Grant Date) of t he Common Stock for which this option
first becomes exercisable in the calendar year in which the Change in
Control occurs does not, when added to the aggregate 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 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 applicable One
Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar
year of such Change in Control, the option may nevertheless be exercised
for the excess shares in such calendar year as a Non-Statutory Option.
(iv) Should 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 Options
shall be applied on the basis of the order in which such options are
granted.
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APPENDIX
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The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Option Agreement.
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B. Board shall mean the Corporation's Board of Directors.
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C. Change in Control shall mean a change in ownership or control of
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the Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's shareholders, unless securities representing more than fifty
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percent (50%) of the total combined voting power of the voting securities of the
successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Corporation's outstanding voting securities immediately
prior to such transaction,
(ii) any shareholder-approved transfer or other disposition of
all or substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
0000 Xxx) of securities possessing more than eighty percent (80%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's shareholders which
the Board recommends such shareholders to accept.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
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E. Common Stock shall mean the Corporation's common stock.
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F. Corporation shall mean DTM Corporation, a Texas corporation and
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any successor corporation to all or substantially all of the assets or voting
stock of DTM Corporation.
G. Employee shall mean an individual who is in the employ of the
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Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. Exercise Date shall mean the date on which the option shall have
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been exercised in accordance with Paragraph 9 of the Agreement.
I. Exercise Price shall mean the exercise price per share as
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specified in the Grant Notice.
J. Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.
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K. Fair Market Value per share of Common Stock on any relevant date
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shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as the price is reported by
the National Association of Securities Dealers on the Nasdaq National Market or
any successor system. If there is no closing selling price for the Common Stock
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.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock 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.
X. Xxxxx Date shall mean the date of grant of the option as specified
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in the Grant Notice.
X. Xxxxx Notice shall mean the Notice of Grant of Stock Option
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accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. Incentive Option shall mean an option which satisfies the
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requirements of Code Section 422.
O. "Involuntary Termination" shall mean the termination of Optionee's
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Service by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (i) a change in
Optionee's position with the Corporation (or Parent or Subsidiary employing
Optionee) which materially reduces Optionee's duties and responsibilities or the
level of management to which Optionee reports, (ii) a reduction in Optionee's
level of compensation (including base salary, fringe benefits and target bonus
under any performance-based bonus or incentive programs) by more than fifteen
percent (15%) in the aggregate, or (iii) a relocation of Optionee's place of
employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected without Optionee's consent.
P. Misconduct shall mean the commission of any act of fraud,
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embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any intentional wrongdoing by Optionee, whether by
omission or commission, which adversely affects the business or affairs of the
Corporation (or any Parent or Subsidiary) or in a material
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manner. The foregoing definition shall not limit the grounds for the dismissal
or discharge of Optionee or any other individual in the Service of the
Corporation (or any Parent or Subsidiary).
Q. Non-Statutory Option shall mean an option not intended to satisfy
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the requirements of Code Section 422.
R. Notice of Exercise shall mean the notice of exercise in the form
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attached hereto as Exhibit I.
S. Option Shares shall mean the number of shares of Common Stock
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subject to the option as specified in the Grant Notice.
T. Optionee shall mean the person to whom the option is granted as
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specified in the Grant Notice.
U. Parent shall mean any corporation (other than the Corporation) in
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an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the 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.
V. Permanent Disability shall mean the inability of Optionee to
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engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.
W. Plan shall mean the Corporation's 1999 Stock Incentive Plan.
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X. Plan Administrator shall mean either the Board or a committee of
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the Board acting in its administrative capacity under the Plan.
Y. Retirement shall mean Optionee's retirement from Service with the
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Corporation on a date on which Optionee is at least 55 years of age and has
completed at least ten (10) years of continuous Service with the Corporation.
Z. Service shall mean Optionee's performance of services for the
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Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
AA. Stock Exchange shall mean the American Stock Exchange or the New
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York Stock Exchange.
BB. Subsidiary shall mean any corporation (other than the Corporation)
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in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the 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.
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EXHIBIT I
NOTICE OF EXERCISE
I hereby notify DTM 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 "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's 1999 Stock Incentive Plan on ____________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) 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 payment of the Exercise
Price.
__________________, 199__
Date
__________________________________
Optionee
Address:__________________________
__________________________________
__________________________________
Print name in exact manner
it is to appear on the
stock certificate: __________________________________
Address to which certificate
is to be sent, if different
from address above: __________________________________
__________________________________
Social Security Number: __________________________________
Employee Number: __________________________________
