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EXHIBIT 10.7
XXXXX SYSTEMS CORPORATION
1996 NON-EMPLOYEE DIRECTOR STOCK
OPTION/RESTRICTED STOCK INCENTIVE PLAN
S T O C K O P T I O N A G R E E M E N T
THIS AGREEMENT, dated as of, ________, _____, is by and between Xxxxx Systems
Corporation, a Delaware corporation ("Xxxxx Systems" or the "Company"), and
_______ ("Participant").
WITNESSETH
WHEREAS, Xxxxx Systems has adopted the Xxxxx Systems Corporation 1996
Non-Employee Director Stock Option/Restricted Stock Incentive Plan (the "Plan")
to enable non-employee directors of the Company to acquire shares of Class A
Common Stock, $0.01 par value, of the Company ("Common Stock") in accordance
with the provisions of the Plan; and
WHEREAS, the Participant is entitled, and has elected, to receive this option
to purchase shares of Common Stock pursuant to the Plan and in accordance with
the terms and conditions of this Agreement, provided, that if any change is
made in the shares of Common Stock (including, but not limited to, by stock
dividend, stock split, or merger or consolidation, but not including the
issuance of additional shares for consideration), the Board of Directors will
make such adjustments in the number and kind of shares (which may consist of
shares of a surviving corporation to a merger) and purchase price per share of
shares subject to outstanding options issued under the Plan as the Board of
Directors determines are equitable to preserve the respective rights of the
Participants under the Plan;
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
and other terms and conditions set forth in this Agreement, Xxxxx Systems and
Participant agree as follows:
1. Award.
(a) Subject to the terms, conditions, and restrictions set forth in the
Plan and in this Agreement, Xxxxx Systems hereby awards and grants to
Participant, and Participant hereby accepts from Xxxxx Systems, the option
to purchase from Xxxxx Systems [30,000][_______] of shares of Common Stock,
at the purchase price, and in accordance with the schedule specified on
Attachment A hereto.
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(b) The option may be exercised only with respect to vested options.
Once vested, the options may be exercised until the expiration date set
forth on Attachment A hereto (unless such right to exercise is earlier
terminated pursuant to Section 3 hereunder), by delivering written notice
of the exercise to Xxxxx Systems specifying the number of shares to be
purchased and paying in full the purchase price for such shares either
(i) in cash or check in United States dollars or
(ii) by tendering to Xxxxx Systems shares of the same class as the
shares being acquired that have been owned by the person exercising
the option for any period necessary to avoid a charge to Xxxxx
Systems' earnings and having a fair market value on the date of
exercise equal to such purchase price, or
(iii) by a combination of such cash and shares.
(c) For purposes of this Agreement, the term "fair market value" means,
with respect to any Purchased Stock means,
(i) if the Purchased Stock is publicly traded, the closing sale
price on the date of determination in the market in which the shares
are principally traded (which may be a stock exchange) or, if no
such closing sale price is available for such date, on the most
recent previous date for which such a closing sale price is
available or, if no closing sale price is available, the closing bid
price on such date as quoted in the NASDAQ system, or by the
National Quotation Bureau, Inc., if not so quoted, or, if no such
closing bid price is available for such date, the closing bid price
on the most recent previous date for which such a closing bid price
is available, or
(ii) if Purchased Stock is not publicly traded, their fair market
value, determined by reference to the most recent appraisal of the
Common Stock conducted by appraisers selected by the Board of
Directors of Xxxxx Systems.
(d) For purposes of this Agreement, the term "publicly traded" means
Purchased Stock has been listed on a registered national securities
exchange or approved for quotation in the National Association of
Securities Dealers Automated Quotation ("NASDAQ") system.
(e) For purposes of this Agreement, the term "Purchased Stock" means any
Common Stock or other security purchased upon the exercise of this option,
together with any successor security, property or cash issued or
distributed by Xxxxx Systems or any successor entity, whether by way of
merger, consolidation, share exchange, reorganization, liquidation,
recapitalization, or otherwise.
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2. Restrictions on Transfer of Option and Purchased Stock.
(a) The option evidenced by this Agreement may not be sold or otherwise
transferred, and is exercisable only by Participant.
(b) Shares of Purchased Stock may not be sold or otherwise transferred
for six months after stock of the same class as the Purchased Stock is
publicly traded.
(c) Xxxxx Systems is not obligated to recognize any purported sale or
other transfer of the option or Purchased Stock in violation of this
Section 2 and may treat any such purported sale or transfer as null, void,
and of no effect.
3. Cessation of Service to Xxxxx Systems.
Any unvested options evidenced by this Agreement will terminate and, except
to the extent set forth in this Section 3, will cease being exercisable if
Participant, for any reason whatsoever, is no longer serving Xxxxx Systems
in at least one of the following capacities: a member of the Xxxxx Systems
Board of Directors, a member of the Xxxxx Systems Advisory Board, [a
consultant under contract to Xxxxx Systems,] or full time employee of Xxxxx
Systems (a "Termination Event"), unless the Committee, in its sole
discretion, agrees in writing otherwise. If a Termination Event occurs by
reason other than the death of Participant, Participant will have thirty
days after the Termination Event to exercise all vested options hereunder,
but in no event later than the expiration date set forth on Attachment A
hereto. If a Termination Event occurs by reason of the death of
Participant, Participant's estate will have two years after the Termination
Event to exercise all vested options hereunder, but in no event later than
the expiration date set forth on Attachment A hereto.
4. Company's Right of First Refusal.
(a) Unless and until shares of Purchased Stock are publicly traded,
Xxxxx Systems will have a right of first refusal to purchase such shares
purchased hereunder if the holder of the shares desires or is obligated to
sell or otherwise transfer the shares, but this right will not apply to a
transfer upon Participant's death by will or by the laws of descent and
distribution.
(b) Any holder of such shares who desires or is obligated to sell or
otherwise transfer them before shares of Purchased Stock are publicly
traded must give Xxxxx Systems written notice of the proposed sale or other
transfer. The notice must include the name of the proposed purchaser or
transferee and describe the circumstances of the transfer. Xxxxx Systems
may purchase any or all of the shares
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proposed to be sold or transferred by notifying the holder within 30 days
of its receipt of the notice of its election to exercise its right of first
refusal and tendering the purchase price of the shares as soon as
reasonably practicable thereafter.
(c) The purchase price at which Xxxxx Systems will purchase shares under
its right of first refusal will be their fair market value, determined by
reference to the most recent appraisal of the Common Stock conducted by
appraisers selected by the Board of Directors of Xxxxx Systems conducted
on or before the date of receipt of the notice of the proposed sale or
transfer.
5. Compliance with Securities Laws.
(a) Participant acknowledges that the option evidenced by this Agreement
and the shares to be issued upon exercise of the option have not been
registered under the Securities Act of 1933, that Xxxxx Systems has no
present intention to so register them, that such shares may be deemed
"restricted securities" under Rule 144 of the Act, that the holder of
restricted securities may be required to hold them for an indefinite period
of time unless they are registered for sale under the Act or an exemption
from registration is available, and that routine sales of restricted
securities under Rule 144 can only be made if Xxxxx Systems meets certain
requirements, including a requirement to make certain information publicly
available, and then only in limited amounts and in a specified manner in
accordance with the terms and conditions of Rule 144.
(b) Upon demand by Xxxxx Systems, any person exercising the option
evidenced by this Agreement, at the time of such exercise, will deliver to
Xxxxx Systems a written representation to the effect that the shares being
acquired are being acquired for investment and not with a view to any
resale or distribution thereof.
(c) Neither Participant nor any successor in interest of Participant
will sell or otherwise transfer the option evidenced by this Agreement or
any shares acquired upon exercise of the option in any way that might
result in a violation of any federal or state securities laws or
regulations.
(d) Xxxxx Systems may require Participant or any subsequent holder of
the option or of any shares acquired upon exercise of the option to provide
Xxxxx Systems, before any sale or other transfer, with such
representations, commitments, and opinions regarding compliance with
applicable securities laws and regulations as Xxxxx Systems may deem
necessary or advisable.
6. Stock Certificates; Rights as Shareholder. Xxxxx Systems will retain for
safekeeping all certificates representing shares purchased upon exercise of
the option evidenced by this Agreement. Each such certificate will bear
such legends as the Board
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determines are necessary or appropriate. Whether or not certificates
representing such shares have been issued or delivered, Participant will
have all the rights of a shareholder of Common Stock, including voting,
dividend and distribution rights, with respect to such shares owned by
Participant. Participant will not have any rights as a shareholder with
respect to any shares subject to the option before the date of issuance to
Participant of shares upon exercise of the option.
7. Income Tax Withholding. Participant (or any person entitled to act on
Participant's behalf) shall, upon request by the Company, pay to Xxxxx
Systems, or Xxxxx Systems may withhold from sums or property otherwise due
or payable to Participant (or such person), such amount as Xxxxx Systems
may request for the purpose of satisfying any liability to withhold
federal, state, local, or foreign income or other taxes. If shares of stock
are withheld for such purpose, they will be withheld at fair market value,
as defined in Section l(c), as of the date of accrual of the liability.
8. Compliance with Plan. Participant acknowledges receipt of a copy of the
Plan and further acknowledges that this Agreement is entered into, and the
option has been awarded, pursuant to the Plan. If the provisions of the
Plan are inconsistent with the provisions of this Agreement, the provisions
of the Plan govern and supersede the provisions of this Agreement.
9. Notices. Any notice to Xxxxx Systems or the Company that is required or
permitted by this Agreement shall be addressed to the attention of the
Secretary of Xxxxx Systems at 00000 Xxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000. Any notice to Participant that is required or permitted by this
Agreement shall be addressed to Participant at the most recent address for
Participant reflected in the appropriate records of the Company. Either
party may at any time change its address for notification purposes by
giving the other written notice of the new address and the date upon which
it will become effective. Whenever this Agreement requires or permits any
notice from one party to another, this notice must be in writing to be
effective and, if mailed, shall be deemed to have been given on the third
business day after the same is enclosed in an envelope, addressed to the
party to be notified at the appropriate address, properly stamped, sealed,
and deposited in the United States mail, and, if mailed to the Company, by
certified mail, return receipt requested.
10. Remedies. Xxxxx Systems is entitled, in addition to any other remedies it
may have at law or in equity, to temporary and permanent injunctive and
other equitable relief to enforce the provisions of this Agreement. Any
action to enforce the provisions of, or otherwise relating to, this
Agreement may be brought in the state or federal courts having
jurisdiction in Dallas, Dallas County, Texas. By signing this Agreement,
Participant consents to the personal jurisdiction of such courts in any
such action.
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11. Assignment. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, personal
representatives and permitted successors and assigns. However,
Participant does not have the power or right to assign this Agreement
without the prior written consent of Xxxxx Systems.
12. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party
will be entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which that party may be
entitled.
13. Severability. If any provision of this Agreement is held invalid or
unenforceable for any reason, the validity and enforceability of all other
provisions of this Agreement will not be affected.
14. Headings. The section headings used herein are for reference and
convenience only and do not affect the interpretation of this Agreement.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Texas, without regard to that
state's choice of law rules.
16. Entire Agreement. This Agreement, together with the Plan and any rules
and regulations adopted by the Board or Committee thereunder, constitutes
the entire agreement between the parties with respect to its subject
matter.
17. Amendment. This Agreement may be amended only in a manner that is
consistent with the Plan and only by a written instrument signed by both
Xxxxx Systems and Participant.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Participant and a
duly-authorized representative of Xxxxx Systems have executed this Agreement as
of the date first above written.
PARTICIPANT XXXXX SYSTEMS CORPORATION
By:
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[name] Title: Chairman Of The Board
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CONSENT OF SPOUSE
As the spouse of Participant, I consent to be bound by this Stock Option
Agreement and agree that this consent shall be binding on any interest I may
have under this Agreement and on my heirs, legatees, and assigns.
By:
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Signature
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Printed Name
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Date
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A T T A C H M E N T A
T O
S T O C K O P T I O N A G R E E M E N T
F O R
[NAME]
1. Purchase Price: $ per Share
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2. Expiration Date: , [_____]
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3. Vesting Schedule:
Date Option Shares as to Which Option
Vests Vests on Date
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Percentage Number
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, [ ] 20% [5,000][ ]
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, [ ] 20% [5,000][ ]
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, [ ] 20% [5,000][ ]
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, [ ] 20% [5,000][ ]
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, [ ] 20% [5,000][ ]
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Shares Covered by Option: 100% [30,000][ ]
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