EXHIBIT 4.4
OPTION TO PURCHASE COMMON STOCK--XXXXXXXXXXXX
Neither this Option nor the Common Stock to be issued upon exercise hereof, has
been registered under the Securities Act of 1933, as amended (the "Act"), or
qualified under any state securities law (the "Law"), and this Option has been,
and the Common Stock to be issued upon exercise hereof will be, acquired for
investment and not with a view to, or for resale in connection with, any
distribution thereof. No such sale or other disposition may be made without an
effective registration statement under the Act and qualification under the law
related thereto or an opinion of counsel reasonably satisfactory to Xxxxx &
Xxxxxxxxxx Computer Corporation and its counsel, that said registration and
qualifications are not required under the Act and Law, respectively.
XXXXX & XXXXXXXXXX COMPUTER CORPORATION
STOCK OPTION AGREEMENT
1. NOTICE OF STOCK OPTION GRANT
Optionee: Xxxxx X. Xxxxxxxxxxxx
You have been granted an option (the "Option") to purchase Common Stock
of Xxxxx & Xxxxxxxxxx Computer Corporation (the "Company"), subject to the
following terms and conditions:
Date of Grant October 14, 1998
Exercise Price per Share $14.00
Total Number of Shares 40,000
Type of Option: Nonstatutory Stock Option
Term/Expiration Date: October 14, 2008
Vesting Schedule:
This Option may be exercised, in whole or in part, subject to the terms
of this Agreement, at any time after the Date of Grant and prior to the
Expiration Date.
2. AGREEMENT
(a) Grant of Option. Xxxxx & Xxxxxxxxxx Computer Corporation, a Utah
corporation (the "Company"), hereby grants to the Optionee named in the
Notice of Stock Option Grant in Section 1 above (the "Optionee"), an
option (the "Option") to purchase a total number of shares of Common
Stock (the "Shares") set forth in Section 1, at the exercise price per
share set forth in Section 1 (the "Exercise Price").
(b) Right to Exercise.
(i) This Option may not be exercised for a fraction of a share.
(ii) In the event of Optionee's death, the exercisability of the
Option is governed by Section 5 below.
(iii) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 1.
(c) Method of Exercise. This Option shall be exercisable by written notice
(in the form attached as Exhibit A) which shall state the election to
exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such
shares of Common Stock as may be required by the Company. Such written
notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Corporate Secretary of the Company.
The written notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised upon receipt by the
Company of such written notice accompanied by the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which
the Shares may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on
the date on which the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable pursuant to
the exercise of this Option have not been registered under the Securities Act of
1933, as amended ("1933 Act"), at the time this Option is exercised, Optionee
shall, if required by the Company, concurrently with the exercise of all or any
portion of this Option, deliver to the Company his Investment Representation
Statement in the form attached hereto as Exhibit B.
4. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(a) Cash;
(b) Check;
(c) In lieu of exercising this Option by delivery of cash or check, the Optionee
may make a valid Option exercise by electing to receive shares equal to the
value of this Option (or the portion thereof being canceled) by surrendering
this Option at the principal office of the Company together with the Exercise
Notice (a "Net Exercise"), in which event the Company shall transfer to the
Optionee a number of Shares computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of Option Shares to be issued to such
Optionee.
Y = the number of Option Shares purchasable by such
Optionee under this Option
Agreement, the rights to which are surrendered
pursuant to the Net Exercise.
A = the Fair Market Value of one Option Share, (as
determined by the average of the
high and low prices of the Company's Common
Stock on the trading day immediately preceding
the date the Option is exercise, as reported by
The Nasdaq National Market or other exchange
upon which the Company's stock is quoted).
B = the Exercise Price (as adjusted to the
date of such calculation).
5. DEATH OF OPTIONEE. In the event of the death of Optionee, this Option shall
terminate on the earlier of (i) the date on which the Option would have lapsed
had the Optionee lived; or (ii) 15 months after the date of the Optionee's
death. Upon the Optionee's death, any exercisable Options may be exercised by
the Optionee's legal representative or representatives, by the person or persons
entitled to do so under the Optionee's last will and testament, or, if the
Optionee shall fail to make testamentary disposition of the Option or shall die
intestate, by the person or persons entitled to receive said Option under the
applicable laws of descent and distribution.
6. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
7. TERM OF OPTION. This Option may be exercised only within the term set out in
Section 1, and may be exercised during such term only in accordance with the
terms of this Option.
8. TAXATION UPON EXERCISE OF OPTION. Optionee understands that, upon exercising
a nonstatutory Option, he or she will recognize income for tax purposes in an
amount equal to the excess of the then fair market value of the Shares over the
exercise price. However, the timing of this income recognition may be deferred
for up to six months if Optionee is subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If the Optionee is an
employee, the Company will be required to withhold from Optionee's compensation,
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income.
9. DILUTION PROTECTION.
(a) In the event the Company shall (i) declare a dividend on its Common Stock
in shares of Common Stock or make a distribution in shares of Common Stock,
(ii) declare a stock split or reverse stock split of its outstanding shares
of Common Stock, (iii) combine its outstanding shares of Common Stock into
a smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities (including
any such reclassification in connection with a consolidation or merger in
which the Company or any of its subsidiaries is the continuing
corporation), then the number of shares of Common Stock of the Company,
deliverable to Optionee hereunder and the exercise price related thereto
shall be adjusted so that Optionee shall be entitled to receive the kind
and number of shares of Common Stock of the Company which the Optionee has
the right to receive, upon the happening of any of the events described
above, with respect to the shares of the Company Stock which were otherwise
deliverable pursuant hereto. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event;
(b) Whenever the number of Shares or the exercise price of this Option is
adjusted pursuant to this paragraph, the Company shall promptly mail by
first class mail, postage prepaid, to Optionee, notice of such adjustment
or adjustments.
10. REGISTRATION UNDER THE SECURITIES ACT.
(a) Piggyback Registration. If at any time the Company shall propose to file
with the Securities and Exchange Commission (the "Commission") on behalf of
the Company or any other stockholder a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to any class
of security (as defined in Section 3(a)(10) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), other than a registration
statement approved by the Board of Directors on Form S-4 or S-8, or such
amended or alternative form for Form S-4 or S-8 as the Commission may from
time to time require, the Company shall in each case timely notify Optionee
and include in such registration statement any or all of the Shares as
Optionee may request within twenty (20) days after the Company's giving of
such notice, subject to the conditions set forth herein.
(b) Duties of Company. In connection with the preparation and filing of a
registration statement, the Company agrees to (i) use its best efforts to
cause such registration statement to become and remain effective; (ii)
furnish to the Optionee such number of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as Optionee may reasonably request in order to
facilitate the disposition of the Shares; and (iii) use its best efforts to
register and qualify the shares in such jurisdictions as shall be
identified by the Optionee for the distribution of the securities covered
by the registration statement.
(c) Indemnification by Optionee. To the extent permitted by law, Optionee will
indemnify and hold harmless the Company, and its directors, officers,
employees, agents and representatives, as well as its controlling persons
(within the meaning of the Act) against any losses, claims, damages,
liabilities, or expenses, including without limitation, attorneys' fees and
disbursements, which arise out of or are based upon any violation by
Optionee of the Act, or any rule or regulation promulgated thereunder
applicable to Optionee or arise out of or are based upon any untrue
statement of any material fact contained in the registration statement, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission, or alleged
omission was made in such registration statement in reliance upon and in
conformity with information furnished by Optionee in writing expressly for
use in connection with such registration statement.
(d) Indemnification by Company. To the extent permitted by law, the Company
will indemnify and hold harmless Optionee against any losses, claims,
damages, liabilities, or expenses, including without limitation attorneys'
fees and disbursements, to which Optionee may become subject under the Act
to the extent that such losses, claims, damages or liabilities arise out of
or are based upon any violation by the Company of the Act, or any rule or
regulation promulgated thereunder applicable to the Company, or arise out
of or are based upon any untrue or alleged untrue statement of any material
fact contained in the registration statement, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or arise out of any violation by the Company of any rule or
regulation promulgated under the Act applicable to the Company and relating
to action or inaction of the Company in connection with such registration
statement; provided, however, that the indemnity agreement contained in
this paragraph shall not apply to any loss, damage or liability to the
extent that same arises out of or is based upon an untrue statement or
omission made in connection with such registration statement in reliance
upon and in conformity with information furnished in writing expressly for
use in connection with such registration by Optionee.
(e) Undertaking by Optionee. Optionee undertakes to comply with all applicable
laws governing the distribution of securities in connection with Optionee's
sale of the Shares, and to notify the Company of any changes in Optionee's
plan of distribution so that the Company can sticker or amend the
registration statement as the Company deems appropriate in its sole
discretion.
(f) Conditions to Registration. In the event that the proposed registration by
the Company is, in whole or in part, an underwritten public offering of
common stock of the Company, any request pursuant to these registration
rights to register shares may specify that such shares are to be included
in the underwriting on the same terms and conditions as such other shares
of common stock, if any, otherwise being sold through underwriters under
such registration; provided, however, that if the managing underwriter
determines and advises in writing that the inclusion of all shares proposed
to be included in the underwritten public offering would interfere with the
successful marketing of the public offering, then the number of shares
intended to be included by Optionee shall be reduced pro rata among the
holders of other shares who have a right to have their shares included in
the offering. In each case, those shares which are excluded from the
underwritten public offering shall be withheld from the market by Optionee
for a period, not to exceed 120 days, which the managing underwriter
reasonably determines as necessary in order to effect the underwritten
public offering. Under no circumstances may Optionee transfer or otherwise
convey the registration rights herein set forth without the written consent
of the Company. No holder of Shares shall have any right to take any action
to restrain, enjoin or otherwise delay any registration as a result of any
controversy that might arise with respect to the interpretation or
implementation of these registration rights.
XXXXX & XXXXXXXXXX COMPUTER CORPORATION, a Utah corporation
By: _____________________________
Print Name: ______________________
Title: ____________________________
Optionee hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed this Option in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Option
and fully understands all provisions of the Option.
Dated: _______________ _____________________________________
Optionee
EXHIBIT A
STOCK OPTION
EXERCISE NOTICE
Xxxxx & Xxxxxxxxxx Computer Corporation
000 Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Secretary
1. EXERCISE OF OPTION. Effective as of today, ___________, ____, the undersigned
("Optionee") hereby elects to exercise Optionee's option to purchase _________
shares of the Common Stock (the "Shares") of Xxxxx & Xxxxxxxxxx Computer
Corporation (the "Company") under and pursuant to the Nonstatutory Stock Option
Agreement dated ____________ (the "Option Agreement").
2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Option Agreement and agrees to abide by and be
bound by its terms and conditions.
3. RIGHTS AS SHAREHOLDER. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option
is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued.
4. TAX CONSULTATION. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee's purchase or disposition of the Shares.
Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.
5. RESTRICTIVE LEGEND. Optionee understands and agrees that in the event the
Shares are not registered, the Company shall cause the legend set forth below or
legends substantially equivalent thereto, to be placed upon any certificate(s)
evidencing ownership of the Shares together with any other legends that may be
required by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE 1933 ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS, OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
6. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
7. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah excluding that body
of law pertaining to conflicts of law. Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.
8. NOTICES. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States mail by certified mail, with postage and fees prepaid,
addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
9. FURTHER INSTRUMENTS. The parties agree to execute such further instruments
and to take such further action as may be reasonably necessary to carry out the
purposes and intent of this Agreement.
10. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the full
Exercise Price for the Shares.
11. ENTIRE AGREEMENT. The Option Agreement is incorporated herein by reference.
This Agreement, the Option Agreement and the Investment Representation Statement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof.
Submitted by: Accepted by:
OPTIONEE: ___________________________________
By:________________________________
Its:_______________________________
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(Signature)
Address: Address:
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE : Xxxxx X. Xxxxxxxxxxxx
COMPANY : Xxxxx & Xxxxxxxxxx Computer Corporation
SECURITY : Common Stock
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
1. Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
securities. Optionee is acquiring these securities for investment for
Optionee's own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "1933 Act").
2. Optionee acknowledges and understands that the securities
constitute "restricted securities" under the 1933 Act and have not been
registered under the 1933 Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona
fide nature of Optionee's investment intent as expressed herein. In
this connection, Optionee understands that, in the view of the
Securities and Exchange Commission, the statutory basis for such
exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for
the minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market price
of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities
must be held indefinitely unless they are subsequently registered under
the 1933 Act or an exemption from such registration is available.
Optionee understands that the certificate evidencing the securities
will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not
required under federal and applicable state securities laws, in the
opinion of counsel satisfactory to the Company.
3. Optionee is familiar with the provisions of Rule 701 and
Rule 144, each promulgated under the 1933 Act, which, in substance,
permit limited public resale of "restricted securities" acquired,
directly or indirectly from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to the Optionee, the exercise will be exempt from
registration under the 1933 Act. In the event the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the
securities exempt under Rule 701 may be resold, subject to the
satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker
(as said term is defined under the Securities Exchange Act of 1934);
and, in the case of an affiliate, (2) the availability of certain
public information about the Company, (3) the amount of securities
being sold during any three month period not exceeding the limitations
specified in Rule 144(e), and (4) the timely filing of a Form 144, if
applicable.
In the event that the Company does not qualify under Rule 701
at the time of grant of the Option, then the securities may be resold
in certain limited circumstances subject to the provisions of Rule 144,
which requires the resale to occur not less than two years after the
party has purchased, and made full payment for, within the meaning of
Rule 144, the securities to be sold; and, in the case of an affiliate,
or of a non-affiliate who has held the securities less than three
years, the satisfaction of the conditions set forth in sections (1),
(2), (3) and (4) of the paragraph immediately above.
4. Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied,
registration under the 1933 Act, compliance with Regulation A, or some
other registration exemption will be required; and that,
notwithstanding the fact that Rules 144 and 701 are not exclusive, the
Staff of the Securities and Exchange Commission has expressed its
opinion that persons proposing to sell private placement securities
other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk. Optionee
understands that no assurances can be given that any such other
registration exemption will be available in such event.
Signature of Optionee:
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Date:________________
