EXHIBIT 10.9
ENGINEERING ANIMATION, INC.
1999 OFFICER PLAN NONQUALIFIED STOCK OPTION AGREEMENT
(NON-PLAN OPTION)
THIS AGREEMENT is made as of the 27th day of December, 1999 (the "Grant
Date") between ENGINEERING ANIMATION, INC., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxx (the "Optionee").
WITNESSETH:
WHEREAS, the Board of Directors of the Company recognizes the value of
granting stock options to employees of the Company as a means of attracting,
retaining and rewarding persons of ability as key employees and motivating these
employees to exert their best efforts on behalf of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has
decided to grant to the Optionee an option to purchase shares of the Company's
common stock, $0.01 par value per share ("Common Stock").
NOW THEREFORE, the parties hereby agree as follows:
1. Grant. The Company grants to the Optionee an option (the
"Option") to purchase 80,000 shares of the Company's Common Stock at a per-share
price of $8.282 (the "Option Price"), on the terms and subject to the conditions
set forth in this Agreement.
2. Timing and Duration of Exercise. Subject to the provisions of
Section 3 of this Agreement, the duration of the Option shall be for the period
beginning on the Grant Date and continuing through the close of business on the
10-year anniversary of the Grant Date (the "Option Period"). Except to the
extent otherwise provided in this Agreement, the Optionee shall become vested in
the Option as follows:
o Twenty thousand (20,000) shares shall vest as of each of the one-year,
two-year, three-year, and four-year anniversaries of the Grant Date.
The Option shall be exercisable by the Optionee at any time during the
Option Period to the extent it is vested.
3. Exercise in the Event of Death or Other Termination.
---------------------------------------------------
(a) If the Optionee dies while an employee of the Company or
terminates the employment relationship with the Company because of
"permanent disability," as defined in Code Section 22(e)(3), the Option
may be exercised, to the extent that the Optionee could have done so at
the date of the Optionee's termination of employment because of death
or permanent disability (i.e., to the extent the Option is vested at
that time), by the person or persons to whom the Optionee's rights
under the Option pass by will or applicable law, or if no such person
has such right, by his/her executors or administrators, at any time, or
from time to time, within one year after the date of such termination
of employment or consulting or advisor relationship, but not later than
the expiration date specified in Section 5(c) of this Agreement.
(b) If the Optionee's employment shall terminate due to
"retirement" as defined below, the Optionee may exercise the Option, to
the extent that the Optionee could have done so at the date of the
Optionee's termination of employment due to retirement (i.e., to the
extent the Option is vested at that time), at any time, or from time to
time, within three months of such retirement but not later than the
expiration date specified in Section 5(c) of this Agreement. If the
Optionee dies following his/her retirement and prior to exercising the
portion of the Option that has not expired as of the date of his/her
death, then, notwithstanding the preceding sentence, that portion of
the Option shall remain exercisable until the first to occur of the
expiration date specified in Section 5(c) of this Agreement or one year
after the date of the Optionee's death. "Retirement" for purposes of
this Agreement shall mean the termination of the Optionee's employment
on or after the date he/she attains age 65.
(c) Notwithstanding anything in this Section to the contrary,
if the Optionee's employment relationship is terminated for cause,
his/her ability to exercise any portion of the Option shall terminate
on the date of his/her termination of employment. For this purpose,
termination for "cause" means
(i) the commission of an action against or in derogation of
the interests of the Company which, if proven in a court of
law, would constitute a violation of a criminal code or
similar law;
(ii) divulging the Company's confidential information; or
(iii) the performance of any similar action that the
Committee, in its sole discretion, may deem to be sufficiently
injurious to the interest of the Company to constitute cause
for termination.
(d) If the Optionee's employment is terminated for any reason other than
those described in subsections (a), (b) or (c) of this Section, he/she
may exercise the Option, to the extent that the Optionee could have
done so at the date of the Optionee's termination of employment (i.e.,
to the extent the Option is vested at that time), at any time, or from
time to time, within three months of the date of his/her termination of
employment, consulting or advisor relationship, but not later than the
end of the Option Period.
4. Method of Exercise. The Option, or any part of it, shall be
exercised by written notice directed to the Corporate Secretary of the
Company at the Company's principal office in Ames, Iowa. Such notice
must satisfy the following requirements:
(a) The notice must state the Grant Date, the number of shares
of Common Stock subject to the grant, the number of shares of Common
Stock with respect to which the Option is being exercised, the person
in whose name the stock certificate or certificates for such shares of
Common Stock is to be registered and the person's address and Social
Security number (or if more than one person, the names, addresses and
Social Security numbers of such persons).
(b) The notice shall be accompanied by check, bank draft,
money order or other cash payment or by delivery of a certificate or
certificates, properly endorsed, for shares of Common Stock equivalent
in Fair Market Value on the date of exercise to the Option Price, or by
a combination of cash and shares, in full payment of the Option Price
for the number of shares specified in the notice.
(c) The notice shall contain such representations and
agreements as to the holder's investment intent with respect to such
shares of Common Stock as may be satisfactory to the Board.
(d) The notice must be signed by the person or persons
entitled to exercise the Option and, if the Option is being exercised
by any person or persons other than the Optionee, be accompanied by
proof, satisfactory to the Board, of the right of such person or
persons to exercise the Option.
The exercise may be with respect to any one or more shares of Common
Stock covered by the Option, reserving the remainder for a subsequent timely
exercise. The Company shall make prompt delivery of such shares; provided that
if any law or regulation requires the Company to take any action with respect to
such shares before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to take such action; and
provided further that the Company shall have no obligation to deliver any such
certificate unless and until appropriate provision has been made for any
withholding taxes in respect of such exercise. The Optionee may elect to
surrender shares of Common Stock previously acquired by the Optionee or to have
the Company withhold shares that would have otherwise been issued pursuant to
the exercise of the Option in order to satisfy all or a portion of any such tax
withholding obligation.
5. Termination of Option; Bar to Exercise.
--------------------------------------
(a) The Board may at any time terminate the Option if it
shall, in the reasonable exercise of its judgment, find that the
Optionee has disclosed, without the written consent of an authorized
officer of the Company, to any person not employed by or engaged to
render services to the Company, any confidential information of the
Company or has engaged in competition with the Company or in any
activities otherwise contrary to the best interests of the Company. The
right to exercise this Option has been granted, and the compensation to
be realized in the event of exercise has been provided, upon the
express understanding that the Optionee shall refrain from engaging in
any activities contrary to the best interests of the Company.
(b) The Option may not be exercised if such exercise could
constitute a violation of any applicable federal, state or other law or
regulation.
(c) The Option may not be exercised after the last day of the
Option Period, as defined in Section 2 of this Agreement, subject to
the limitation in Section 3 of this Agreement, if applicable.
6. Change in Control. As of the effective date of any "Change in
Control," as defined below, the Option shall become fully vested and shall be
exercisable (subject to Section 3 of this Agreement) as follows: If a Change of
Control occurs prior to January 30, 2000, then 20,000 shares shall vest; if a
Change of Control occurs after January 30, 2000 and prior to March 30, 2000,
then 40,000 shares shall vest; if a Change of Control occurs after March 30,
2000 and prior to June 30, 2000, then 80,000 shares shall vest; if a Change of
Control occurs after June 30, 2000, then all 80,000 shares shall vest.
For this purpose, a "Change in Control" of shall be deemed to have
occurred if the conditions set forth in any one or more of the following
paragraphs shall have been satisfied:
(a) Any Person other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
Shares of the Company, or other than a Person whose stock ownership is
approved by a vote of two-thirds (2/3) of the Directors who are not
affiliated with such Person), becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities;
or
(b) During any period of two consecutive fiscal years,
individuals who at the beginning of such period constitute the Board of
Directors (and any new Director, whose election the Board of Directors
was approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who either were Directors at the beginning of the
period or whose election was previously so approved), cease for any
reason to constitute a majority thereof; or
(c) The stockholders of the Company approve (a) a plan of
complete liquidation of the Company; or (b) an agreement for the sale
or disposition of all or substantially all the Company's assets; or (c)
a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), at least 50%
of the combined voting securities of the Company (or such surviving
entity) outstanding immediately after such merger or consolidation; or
(d) The Board of Directors agrees by a two-thirds (2/3)
vote, that a Change in Control of the Company has occurred.
However, in no event shall a Change in Control be deemed to have
occurred, with respect to an Optionee, if that Optionee is part of a
purchasing group which consummates the Change in Control transaction.
An Optionee shall be deemed "part of a purchasing group" for purposes
of the preceding sentence if the Optionee is an equity participant or
has agreed to become an equity participant in the purchasing company or
group (except for (i) passive ownership of less than 3% of the shares
of the purchasing company; or (ii) ownership or equity participation in
the purchasing company or group which is otherwise not deemed to be
significant, as determined prior to the Change in Control by a majority
of the disinterested Directors of the Company).
7. Rights Not Conferred. The Option shall not be affected by any
change in the nature of the Optionee's employment with the Company so long as
the Optionee continues to be employed by the Company. Nothing contained in this
Agreement shall confer upon the Optionee any right with respect to continuance
of employment or other relationship with the Company or interfere in any way
with the right of the Company to terminate the employment of the Optionee at any
time.
8. Nontransferability. The Option shall not be transferable
other than by will or by the laws of descent and distribution. During the
lifetime of the Optionee, the Option shall be exercisable only by the Optionee
or by the Optionee's guardian or legal representative.
9. No Rights as a Stockholder. The Optionee shall not have any
rights as a stockholder with respect to any shares of Common Stock subject to
the Option prior to the date of issuance to the Optionee of a certificate or
certificates for such shares.
10. Option Subject to this Agreement. The granting of the Option is
being made pursuant to this Agreement and the Option shall be exercisable only
in accordance with the applicable terms of this Agreement. The Agreement
contains certain definitions, restrictions, limitations and other terms and
conditions all of which shall be applicable to the Option.
11. Adjustments in Event of Change in Common Stock. In the event of any
increase or decrease in the number of shares of issued Common Stock of the
Company resulting from a subdivision or consolidation of shares whether through
reorganization, payment of a share dividend or other increase or decrease in the
number of such shares outstanding effected without receipt of consideration by
the Company, distribution of assets to stockholders or the assumption and
conversion of outstanding options in an acquisition of the Company, the number
and kind of shares subject to the Option, and the Option Price may be
appropriately adjusted consistent with such change in such manner as the Board
may deem equitable to prevent substantial dilution or enlargement of the rights
granted to or available for the Optionee; provided, however, that no adjustment
in the number of shares subject to the Option shall be made, except in the event
that such adjustment, together with all respective prior adjustments that were
not made as a result of this provision, involve a net change of more than 10%.
12. Withholding of Taxes. Upon the exercise of an Option, the Company
may deduct any Federal, state or local taxes required by law to be withheld with
respect to such exercise. Any holder of an Option may elect to surrender shares
of Common Stock previously acquired by the holder or to have the Company
withhold shares that would have otherwise been issued to the holder pursuant to
the exercise of an Option, the number of such withheld or surrendered shares to
be sufficient to satisfy all or a portion of the income tax liability that
arises upon such exercise.
13. Severability. If any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall be unaffected and shall remain in full force
and effect in such jurisdiction, and any such invalid or unenforceable provision
shall not be considered invalid or unenforceable in any other jurisdiction.
14. Binding Effect. This Agreement shall be binding upon the
heirs, executors, administrators and successors of the parties.
15. Administration. The Agreement shall be administered by a Committee
consisting of two or more members of the Board of Directors of the Company who
are appointed from time to time by said Board of Directors (the "Committee").
Subject to the express provisions of the Agreement, the Committee shall have the
power to interpret the Agreement, to prescribe, amend and rescind rules and
regulations relating to the Agreement, to determine the terms and provisions of
Optionee's individual option agreements (which need not be identical) and to
make such other determinations as it deems necessary or advisable in carrying
out the administration of the Agreement. All decisions of the Committee on
matters within its jurisdiction shall be conclusive and binding. To the extent
required to comply with the relevant provisions of Rule 16b-3 under the
Securities Exchange Act of 1934, each member of the Committee shall qualify as a
"non-employee director," as defined in Rule 16b-3 or in any successor definition
adopted by the Securities and Exchange Commission. No member of the Board of
Directors or the Committee shall be liable for any action taken or determination
made in good faith.
16. Other Definitions.
-----------------
(a) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934.
(b) "Common Stock" shall mean the Company's $0.01 par
value common stock.
(c) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Securities Exchange Act of 1934 and used in
Sections 13(d) and 14(d) thereof, including a group defined in Section
13(d).
