EXHIBIT 99.3
APPLIED VOICE TECHNOLOGY, INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Xxxxxxx X. Xxxxx Date of Grant: January 2, 1996
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of Applied Voice Technology, Inc. (the "Company") to
receive a nonqualified stock option for the purchase of 100,000 shares of the
Company's Common Stock at an exercise price of $13.75 per share.
TERM: The term of the option is ten years from date of grant, unless
sooner terminated.
VESTING: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
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January 2, 1997 12/36
January 2, 1998 24/36
January 2, 1999 100%
EXERCISE: During your lifetime only you can exercise the option. The
option may be exercised by the personal representative of your estate, by the
beneficiary you have designated on forms prescribed by and filed with the
Company, or the beneficiary of your estate following your death. You may use
the Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: The option may be exercised by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
(b) Unless the Board in its sole discretion determines otherwise, shares of
the capital stock of the Company held by you for a period of at least six months
having a fair market value at the time of exercise, as determined in good faith
by the Board, equal to the exercise price; or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
WITHHOLDING TAXES: As a condition to the exercise of the option, you must
make such arrangements as the Company may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with such exercise. The Company has the right to retain without notice
sufficient shares of stock to satisfy the withholding obligation. To the extent
permitted or required by the Company, you may satisfy the withholding obligation
by electing to have the Company or a related corporation withhold from the
shares to be issued upon exercise that number of shares having a fair market
value equal to the amount required to be withheld. If you are subject to
Section 16 of the Exchange Act you must comply with certain requirements in
order to make such election.
TERMINATION:
(a) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for "Cause" (as defined in Section
7.5 of the Employment Agreement dated as of the date hereof between you and the
Company (the "Employment Agreement")) or (ii) you terminate your employment for
any reason other than "Good Reason" (as defined in the Employment Agreement),
and unless by its terms the option sooner terminates or expires, then you may
exercise, for a three-month period, that portion of the option which is
exercisable at the time of such cessation, but the option will terminate at the
end of such period following such cessation as to all shares for which it has
not theretofore been exercised.
(b) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for any reason other than for
"Cause" or (ii) you terminate your employment for "Good Reason," then the option
will continue to vest, and you will continue to be able to exercise the option,
on the same terms as if your relationship with the Company or any related
corporation had not ceased.
(c) If your relationship with the Company or any related corporation ceases
because of your death or "total disability" (as defined in Section 6.3 of the
Employment Agreement), and unless by its terms the option sooner terminates or
expires, then you or your personal representative may exercise, for a 12-month
period, that portion of the option which is exercisable at the time of such
cessation, but the option will terminate at the end of such period following
such cessation as to all shares for which it has not theretofore been exercised.
(d) As used herein, the term "related corporation," means any parent or
subsidiary corporation in an unbroken chain of corporations ending with the
Company, if stock possessing 50% or more of the total combined voting power of
all classes of stock of each of the corporations other than the Company is owned
by one of the other corporations in such chain.
DEATH OF OPTIONEE: If you die while having a relationship with the Company
or any related corporation or within the three-month period (or 12-month period
in the case of total disability) following cessation of such relationship, this
option (to the extent that you would have been entitled to exercise this option)
may be exercised within one year after your death by the personal representative
of your estate or by the person or persons to whom your rights under the option
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer.
TRANSFERABILITY OF OPTION: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. This option is personal to you and is
exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this option or of any right or privilege conferred
hereby, contrary to the provisions hereof, or the sale or levy or any attachment
or similar process upon the rights and privileges conferred hereby will be null
and void. Notwithstanding the foregoing, to the extent permitted by applicable
law and regulation, the Company, in its sole discretion, may permit you to (i)
during your lifetime, designate a person who may exercise the option after your
death by giving written notice of such designation to the Company (such
designation may be changed from time to time by you by giving written notice to
the Company revoking any earlier designation and making a new designation) or
(ii) transfer the option and the rights and privileges conferred hereby.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company or of a
related corporation, or to interfere in any way with the right
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of the Company or of any such related corporation to terminate your employment
or other relationship with the Company at any time.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class
of shares covered by this option and the exercise price per share thereof (but
not the total price), will all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
(a) EFFECT OF LIQUIDATION OR REORGANIZATION
(1) Cash, Stock or Other Property for Stock. Except as provided in
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subsection (a)(2), upon a merger (other than a merger of the Company in which
the holders of shares of Common Stock immediately prior to the merger have the
same proportionate ownership of shares of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, this option
will terminate, but you will have the right immediately prior to any such
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise your option in whole or in part
whether or not the vesting requirements set forth in this agreement have been
satisfied.
(2) Conversion of Options on Stock for Stock Exchange. If the
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shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option will be converted into an option to purchase
shares of Exchange Stock. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company.
(b) FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by this
option, any fractional shares resulting from such adjustment will be disregarded
and the option will cover only the number of full shares resulting from such
adjustment.
(c) DETERMINATION OF BOARD TO BE FINAL
All adjustments referred to herein will be made by the Board, and its
determination as to what adjustments will be made, and the extent thereof, will
be final, binding and conclusive.
SECURITIES REGULATION:
Shares will not be issued with respect to this option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
complies with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the
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rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER.
Should any of the Company's capital stock of the same class as the stock
subject to this option be listed on a national securities exchange, all shares
issued hereunder if not previously listed on such exchange will be authorized by
that exchange for listing thereon prior to the issuance thereof.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
APPLIED VOICE TECHNOLOGY, INC.
By________________________________
Its ____________________________
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ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of Arizona, accept the nonqualified stock option
described herein. I have read and understand the Agreement.
Dated: _______________
_______________________________ _____________________________
Taxpayer I.D. Number Xxxxxxx X. Xxxxx
Address______________________
_____________________________
_____________________________
By her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his execution of this Agreement, acknowledges
that she has read this Agreement and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of this
Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his signature below, the Optionee represents that he is not legally
married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Optionee's Signature
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Applied Voice Technology, Inc.
I, a resident of the State of Arizona, hereby exercise my nonqualified
stock option granted by Applied Voice Technology, Inc. (the "Company") on
_____________, 19___, and notify the Company of my desire to purchase ________
shares of Common Stock of the Company (the "Securities") at the exercise price
of $__________ per share which were offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Securities; (2) I have had the opportunity to ask questions and
receive answers concerning the information received about the Securities and the
Company; and (3) I have been given the opportunity to obtain any additional
information I deem necessary to verify the accuracy of any information obtained
concerning the Securities and the Company.
Dated: _________________
_________________________ ________________________
Taxpayer I.D. Number Xxxxxxx X. Xxxxx
Address_________________
________________________
________________________
RECEIPT
_________________________ hereby acknowledges receipt from Xxxxxxx X. Xxxxx
in payment for ______________ shares of Common Stock of Applied Voice
Technology, Inc., a Washington corporation, of $_____________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] __________ shares of the Company's Common Stock, fair market
value $_______ per share held by the Optionee for a period of at
least six months
[_] Copy of irrevocable instructions to Broker
_____________________________
Date: ___________________ For: Applied Voice Technology, Inc.
