Exhibit 10.14
MEDICAL GRAPHICS CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 9th day of January, 1999 by and between
MEDICAL GRAPHICS CORPORATION, a Minnesota corporation (the "Company"), and Xxxx
X. Xxxxxxxx (the "Optionee");
W I T N E S S E T H:
WHEREAS, the Optionee on the date hereof is a non-employee director of
the Company or a Subsidiary of the Company; and
WHEREAS, the Company's Board of Directors believes it is appropriate to
grant Xx. Xxxxxxxx additional compensation in light of all the work he has done
for the Company in his capacity as Chairman, in particular, Xx. Xxxxxxxx'x
efforts as Chairman in raising (i) $1.5 million in financing in March and April
1997; (ii) $3.0 million in financing in November 1997 and January and February
1998 and (iii) $550,000 in September 1998.
WHEREAS, the Company's Board of Directors has adopted a stock option
plan providing for the grant of non-qualified stock options known as the
"Medical Graphics Corporation 1994 Non-Employee Director Compensation Plan"
(hereinafter referred to as the "Plan"); and
WHEREAS, as of the date hereof, the Company's Board of Directors (or,
if so appointed and empowered by the Board, the Board's Stock Option Committee)
authorized the grant of this non-qualified stock option to the Optionee,
including the immediate vesting provisions of Section 4.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Optionee hereby agree as
follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee, as of
the date of this Agreement, the option to purchase 150,000 shares of Common
Stock of the Company (the "Option Stock") subject to the terms and conditions
herein contained, and subject only to adjustment in such number of shares as
provided in Section 12 of the Plan.
2. OPTION PRICE. During the term of this option, the purchase price for
the shares of Option Stock granted herein is $1.25 per share, subject only to
adjustment of such price as provided in Section 12 of the Plan.
3. TERM OF OPTION. The term of this Option shall be for a period of
five (5) years from January 9, 1999 (the "Option Date").
4. EXERCISE OF OPTION. This Option shall be exercisable in full as of
the date of this grant.
5. PERSONAL EXERCISE BY OPTIONEE. This option shall, during the
lifetime of the Optionee, be exercisable only by said Optionee and shall not be
transferable by the Optionee, in whole or in part, other than by will or by the
laws of descent and distribution.
6. MANNER OF EXERCISE OF OPTION. This option is to be exercised by the
Optionee (or by the Optionee's successor or successors) by giving written notice
to the Company of an election to exercise such option. Such notice shall specify
the number of shares to be purchased hereunder and shall specify a date (not
more than 30 calendar days and not less than 10 calendar days from the date of
delivery of the notice to the Company on which the Optionee shall deliver
payment of the full purchase price for the shares being purchased and the
Company shall deliver certificates to the Optionee representing the shares so
purchased. Such notice shall be delivered to the Company at its principal place
of business. An option shall be considered exercised at the time the Company
receives such notice. Upon receipt of such notice and subject to the provision
of Paragraph 9 below, the Company shall, on the date specified in such notice
and against payment by the Optionee of the required purchase price, deliver to
the Optionee certificates for the shares so purchased. Payment for shares of
Option Stock may be made in the form of cash, check, bank draft, or money order.
All requisite original issue or transfer documentary stamp taxes shall be paid
by the Company.
7. RIGHTS AS A SHAREHOLDER. The Optionee or a transferee of this option
shall have no rights as a shareholder with respect to any shares covered by this
option until the date of the issuance of a stock certificate for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
provided in Section 12 of the Plan.
8. STOCK OPTION PLAN. The option evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan is attached hereto or has been made
available to the Optionee and is hereby made a part of this Agreement. This
Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. The Plan governs this option and the Optionee, and in the event of
any question as to the construction of this Agreement or of a conflict between
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the Plan and this Agreement or of a conflict between the Plan and this
Agreement, the Plan shall govern, except as the Plan otherwise provides.
9. WITHHOLDING TAXES. In order to permit the Company to receive a tax
deduction in connection with the exercise of this option, the Optionee agrees
that as a condition to any exercise of this option, the Optionee will also pay
to the Company, or make arrangements satisfactory to the Company regarding
payment of, any federal, state, local or other taxes required by law to be
withheld with respect to the option's exercise.
10. INVESTMENT PURPOSE. The Company requires as a condition to the
grant and exercise of this option that any stock acquired pursuant to this
option be acquired for only investment if, in the opinion of counsel for the
Company, such is required or deemed advisable under securities laws or any other
applicable law, regulation or rule or any government or governmental agency. In
this regard, if requested by the Company, the Optionee, prior to the acquisition
of any shares pursuant to this option, shall execute an investment letter to the
effect that the Optionee is acquiring shares pursuant to the option for
investment purposes only and not with the intention of making any distribution
of such shares and will not dispose of the shares in violation of the applicable
federal and state securities laws.
11. TERMINATION OF DIRECTORSHIP. If the Optionee ceases to be a
director of the Company or any Subsidiary for any reason, or because of the
sale, merger, consolidation or liquidation of the Company (which is covered by
the provisions of Section 12 of the Plan), this option shall nevertheless
terminate on the option's originally stated expiration date.
12. RECAPITALIZATIONS, SALES, MERGERS, EXCHANGES, CONSOLIDATIONS,
LIQUIDATION. In the event of a stock dividend or stock split, the number of
shares of Option Stock and option exercise price shall be adjusted as provided
in Section 12 of the Plan. Similarly, in the event of a sale, merger, exchange,
consolidation or liquidation of the Company, this option shall be adjusted as
provided in Section 12 of the Plan.
13. SCOPE OF AGREEMENT. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and the Optionee and any
successor or successors of the Optionee permitted by Paragraph 5 above.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in the manner appropriate to each, as of the day and year first above
written.
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MEDICAL GRAPHICS CORPORATION
/s/ Xxxxxxx X. Xxxxxx
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Its President and Director
Xxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxxx
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Optionee
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