Exhibit 10.3
OMNIS TECHNOLOGY CORPORATION
NONINCENTIVE STOCK OPTION AGREEMENT
This Nonincentive Stock Option Agreement ("Agreement") is made and
entered into as of September 22, 2000 ("Grant Date") by and between Omnis
Technology Corporation, a Delaware corporation (the "Company"), and XXXXX X.
XXXXX ("Optionee").
W I T N E S S E T H:
A. The Board of Directors of the Company ("Board") has adopted the
Omnis Technology Corporation 1999 Stock Option Plan to create additional
incentives for certain valued employees, directors, consultants and advisors of
the Company or its parent or subsidiary and to promote the financial success and
progress of the Company and such parents and subsidiaries. For purposes hereof
the "Plan" and all section references therein shall be defined as said 1999
Stock Option Plan as amended or superseded during the term of this Agreement.
B. Optionee is a director and the Chairman of the Company and this
Nonincentive Stock Option Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the grant by the Company
to Optionee of a nonincentive stock option.
NOW, THEREFORE, it is agreed as follows:
1. Grant of Option. Subject to and upon the terms, conditions and
restrictions set forth in this Agreement and the Plan, the Company hereby grants
to Optionee as of the Grant Date a nonincentive stock option ("Option") to
purchase up to Thirty Two Thousand (32,000) shares ("Option Shares") of the
common stock of the Company during the Term hereof (as defined in Section 3
hereof) at an Option Price of Five Dollars Ninety-Five Cents ($5.95) per share.
For these purposes "Option Shares" also shall include such stock or other
securities as defined by the Plan.
2. Right to Exercise; Vesting.
a. Subject to the expiration or earlier termination of the
Term of the Option and to Section 3(b) hereof, Optionee shall have the right to
exercise the Option in accordance with the following three (3) year vesting
schedule:
(i) Optionee shall have no right to exercise any part
of the Option at any time prior to the expiration of one (1)
year from the Grant Date;
(ii) The Option shall become exercisable with respect
to one-third (1/3rd) of the Option Shares upon the expiration
of one (1) year from the Grant Date; and
(iii) The Option thereafter shall become exercisable
with respect to an additional one-thirty-sixth (1/36th) of the
Option Shares on the last day of each month that commences
following the Grant Date.
b. Exercisable installments may be exercised by Optionee in
whole or in part and to the extent not exercised shall accumulate and be
exercisable as provided. The Company shall not be required to issue fractional
shares at any time; and any fractional shares remaining in the Option following
any exercise thereof shall be rounded down to the next nearest whole number of
Shares.
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3. Option Term. a. Subject to earlier termination as provided for in
the Plan, the specified term of the Option ("Term") shall be the period
commencing as of the Grant Date and ending on the expiration of ten (10) years
from the Grant Date. Upon the expiration of the Term or earlier termination of
the Option as provided for in the Plan, the Option shall cease to be exercisable
and shall be of no further force or effect.
b. In addition to other events of termination as defined in the Plan,
if Optionee voluntarily resigns as a director of the Company on or prior to
August 31, 2003, then this Option also shall terminate and cease to be
exercisable upon the earlier of (i) the expiration of sixty (60) days from the
date of such voluntary resignation or (ii) the expiration date of the Term. No
additional right to exercise with respect to any Option Shares shall vest from
and after the date of such voluntary resignation.
4. Non-Transferable. The Option shall not be transferable or
assignable by Optionee other than by will or the laws of descent and
distribution, and the Option may be exercised during the lifetime of Optionee
solely by Optionee. Subject to the foregoing, all transfers or assignments or
attempted transfers or assignments of the Option or this Agreement shall be void
ab initio.
5. Plan; Controlling Terms.
a. The Option granted hereunder and this Agreement shall be
governed by and subject to each and all of the terms and provisions of the Plan,
which is hereby incorporated by reference in its entirety. All capitalized or
other terms not defined herein shall have the same meaning as in the Plan. In
the event of any conflict between the Plan and this Agreement, the Plan shall
control. Optionee acknowledges receipt of a copy of the Plan and the opportunity
to review the Plan and to consult with his or her legal advisors concerning the
Plan and this Agreement.
b. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE PLAN CONTAINS
IMPORTANT TERMS AND PROVISIONS THAT WILL APPLY TO AND CONTROL THE OPTION AND
THIS AGREEMENT. THOSE TERMS INCLUDE WITHOUT LIMITATION IMPORTANT CONDITIONS AND
LIMITATIONS ON THE RIGHT OF OPTIONEE TO EXERCISE THE OPTION; IMPORTANT
RESTRICTIONS ON THE RIGHT OF OPTIONEE TO TRANSFER THE OPTION OR THE OPTION
SHARES RECEIVED UPON EXERCISE OF THE OPTION; EARLY TERMINATION OF THE OPTION
FOLLOWING THE OCCURRENCE OF CERTAIN EVENTS, INCLUDING TERMINATION OF THE
DIRECTORSHIP OF OPTIONEE PROCEDURES FOR EXERCISING THE OPTION; TAX WITHHOLDING
AND NOTICE OBLIGATIONS; AND OTHER SUBSTANTIAL RESTRICTIONS AND OBLIGATIONS IN
ADDITION TO THOSE IN THIS AGREEMENT.
6. Tax Status of Option. Set forth below is a brief summary as of the
date of this Agreement of some of the federal tax consequences of exercise of
the Option and disposition of the Option Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE COMPANY
SHALL HAVE NO OBLIGATION TO NOTIFY GRANTEE OF ANY SUCH CHANGES. THE GRANTEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
OPTION SHARES. WITHOUT LIMITING THE FOREGOING, THIS SUMMARY DOES NOT DISCUSS THE
TAX CONSEQUENCES OF THE EXERCISE OF THE OPTION AND THE DISPOSITION OF THE SHARES
UNDER THE LAWS OF THE UNITED KINGDOM OR ANY TAX CONSEQUENCES, IF ANY, TO
OPTIONEE.
a. The Option is intended to be a nonincentive stock option.
Optionee should consult with his or her own tax advisors regarding the tax
effects of the Option and other tax consequences of the Option under applicable
law, including but not limited to holding period requirements.
b. Optionee hereby acknowledges that the rules and
requirements of Section 83 of the Code, including without limitation the
election available under Section 83(b) thereof, may be applicable to the receipt
of Option Shares by Optionee pursuant to this Agreement and the Plan. Optionee
acknowledges that the exercise of the Option and the filing or failure to file
an election under Code Section 83(b) in timely manner may result in adverse tax
consequences to Optionee.
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c. On exercise of a nonincentive stock option, the Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value (as
defined in the Plan) of the Option Shares on the date of exercise over the
Option Price. The Company may be required to withhold from the Optionee's
compensation or collect from the Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Option Shares if such withholding amounts are not delivered at the time
of exercise.
d. If Option Shares are held for more than one year, any gain
realized on disposition of the Option Shares will be treated as long-term
capital gain and will be subject to tax as determined for federal income tax
purposes.
7. Acceleration of Exercise Right In Certain Events.
a. Acceleration Events. Notwithstanding any other right to
exercise the Option, the Option shall become fully exercisable during the
fifteen (15) day period ("Accelerated Exercise Period") immediately prior to the
scheduled consummation of:
(i) The sale or other transfer of more than Fifty
Percent (50%) of the capital stock of the Company in one or
more related transactions for material consideration to any
person or entity or group of persons or entities not
previously shareholders of the Company and not owned or
controlled by a majority of the previous shareholders of the
Company, with such shareholder status determined immediately
prior to the transaction; or
(ii) The sale or other transfer of all or
substantially all of the assets of the Company in one or more
related transactions not in the ordinary course of the
business of the Company to unrelated third parties, whether by
sale, exchange, merger, consolidation, reorganization,
dissolution or liquidation (collectively "Acceleration
Events");
other than (1) any public offering of capital stock of the Company in a Public
Market (as defined in the Plan); (2) any transaction in which the Company is a
surviving parent of the transferee corporation or entity or is a surviving
subsidiary of a transferee parent corporation or entity owned or controlled by a
majority of the previous shareholders of the Company, with such shareholder
status determined immediately prior to the transaction; (3) any sale or transfer
of the capital stock owned or controlled by the majority shareholder or
shareholders of the Company to trusts or comparable entities for the primary
benefit of such shareholders or their family members or to the estate, heirs or
devisees of any such shareholder in the event of his or her death; or (4) any
transaction in which the Company reincorporates in another jurisdiction or
engages in other internal reorganization or changes in corporate structure
without the receipt of consideration; none of which shall be Acceleration Events
hereunder.
b. Substitution or Assumption of Option. Notwithstanding any
other provision hereof, no accelerated exercise of the Option shall be permitted
if the terms of the Acceleration Event provide, as a condition of the
consummation of such transaction, that the Option (or class of outstanding
options of which the Option is a part) shall either be assumed by a successor
corporation (or parent thereof) or be replaced with a comparable substitute
option to purchase shares of capital stock of a successor corporation (or parent
thereof); and the Option may be assumed or replaced pursuant to such
transaction. Determination of comparability in the case of any substitute option
shall be made by the Board of Directors of the Company and shall be final,
binding and conclusive on Optionee. Optionee agrees to execute and deliver such
documents as reasonably required to effect such assumption or substitution
hereunder.
c. Conditional Exercise; Termination. Any permitted exercise
of the Option during the Accelerated Exercise Period hereunder shall be
conditioned upon the consummation of the Acceleration Event and
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shall be effective only immediately prior to such consummation, provided that
Optionee may indicate in writing that such exercise is unconditional with
respect to all or part of the Option then exercisable without regard to the
acceleration provisions of this Section. Upon consummation of the Acceleration
Event, the Option shall terminate and cease to be exercisable, unless assumed by
the successor corporation or parent thereof. In the event such Acceleration
Event is not consummated, the Option shall revert to being exercisable in
accordance with the vesting schedule.
d. Exercise Period. In the event the expiration or earlier
termination of the Term of the Option shall occur prior to the expiration of the
Accelerated Exercise Period provided in this Section, then the Accelerated
Exercise Period shall be shortened to said expiration or earlier termination of
the Term.
8. Limitations on Share Transfer; Mandatory Notice of Disposition.
Optionee shall transfer or dispose of the Option Shares only in accordance with
the provisions of this Agreement and the Plan. Without limiting the foregoing,
mandatory notice of disposition of any Option Shares must be made to the Company
as provided in the Plan and such disposition may be subject to tax withholding
or payments by Optionee.
9. Securities Laws; Restrictions on Grant or Issuance. THE
RESTRICTIONS ON THE TRANSFER OF THE OPTION OR THE OPTION SHARES SHALL BE IN
ADDITION TO ANY OTHER LIMITATIONS ON TRANSFER OR EXERCISE OF THE OPTION OR
ISSUANCE OR TRANSFER OF THE OPTION SHARES IMPOSED BY APPLICABLE FEDERAL AND
STATE SECURITIES LAWS. THE GRANT OF THE OPTION AND THE EXERCISE OF THE OPTION
AND THE ISSUANCE OF THE OPTION SHARES UPON EXERCISE OF THE OPTION AND ANY RESALE
OR OTHER TRANSFER OF SUCH OPTION SHARES BY OPTIONEE SHALL BE SUBJECT TO
COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF FEDERAL OR STATE LAW WITH RESPECT
TO SUCH SECURITIES. Notwithstanding any contrary provision of this Agreement:
a. Optionee understands that since the Option is not
transferable, and since the Option Shares have not been and may not be
registered or exempt under applicable statutes, Optionee may bear the economic
risk of the investment for an indefinite period of time. The Option Shares may
not be sold or otherwise disposed of until such time as the Option Shares are
registered under the Securities Act of 1933 ("Securities Act") or the Option
Shares may be sold pursuant to an applicable exemption from the registration
requirements of the Securities Act. Optionee understands that the Company has no
obligation to file a registration statement under the Securities Act for the
Option or the Option Shares or to otherwise assist Optionee in complying with
any exemption from registration.
b. Optionee represents and warrants that the Option is being
acquired and the Option Shares will be acquired upon exercise for his or her own
account and not with a view to or for sale in connection with any distribution
of such securities. Optionee further acknowledges that any investment in the
Common Stock of the Company is inherently speculative and illiquid and subject
to material risks.
c. As a condition to the exercise of the Option, the Company
may require Optionee to satisfy any qualifications that may be necessary or
appropriate in the sole judgment of the Company or its counsel to evidence
compliance with any applicable law or regulation and to make any written
representation or warranty with respect thereto as may be requested by the
Company.
d. Notwithstanding any contrary provision hereof, the
inability of the Company with reasonable efforts to obtain approval from any
regulatory body having authority deemed by the Company to be necessary for the
lawful issuance and sale of any Option Shares pursuant to the Option shall
relieve the Company of
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any liability in respect of the non-issuance or sale of the Option Shares as to
which such approval shall not have been obtained.
10. Assignment; Binding Effect.
a. The Company may transfer or assign any of its rights or
obligations under this Agreement or the Plan. Optionee shall have no right to
transfer or assign any of the rights and obligations of Optionee under the
Option or this Agreement, subject to Section 4 hereof in the case of a will or
the laws of descent and distribution.
b. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon each of the parties hereto and the officers,
directors, employees, shareholders, owners, agents, representatives, parents,
subsidiaries, affiliates, successors and assigns of the Company, and the
spouses, representatives, executors, administrators, heirs, devisees, agents,
successors and assigns of Optionee.
11. Representations and Warranties.
a. Optionee represents and warrants that he or she has read
the Plan and this Agreement and has had the opportunity to consult with his or
her legal advisors concerning the legal and tax effects of the Plan and this
Agreement and the Option.
b. Each party represents and warrants that such party has the
full right, power, legal capacity and authority to enter into and execute this
Agreement and to discharge all of its obligations under the terms hereof, and
that such party does not have any outstanding obligation and is not a party to
any outstanding agreement which obligation or agreement is inconsistent with
this Agreement. This Agreement has been duly executed and delivered by said
party, and constitutes its valid and legally binding agreement and obligation
and is enforceable in accordance with its terms.
12. Miscellaneous.
a. This Agreement together with the Plan sets forth the entire
agreement of the parties relating to the subject matter hereof, subject to the
provisions of the Plan; and the Plan and this Agreement shall supersede any
prior discussions, understandings and agreements concerning the grant of stock
options or the issuance of option stock between the parties, provided however
that this Agreement shall not supersede and shall be in addition to any separate
fully executed written stock option agreement between the parties pursuant to
any separate stock option grant by the Company. This Agreement may be amended by
further written agreement signed by each of the parties.
b. This Agreement shall be construed in accordance with and
governed by the laws of the State of California without reference to the
principles of conflicts of law.
c. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law.
In the event that any provision of this Agreement shall be held by the final
judgment of a court of competent jurisdiction to be invalid or unlawful or
unenforceable, then the remaining provisions of this Agreement shall remain in
full force and effect and shall be construed to give the fullest effect to the
purpose of the Plan, this Agreement, the Code and pursuant to Section 25102 of
the California Corporations Code and the respective regulations and rules
thereunder (as amended or superseded).
d. No remedy conferred by this Agreement or the Plan shall be
exclusive of any other remedy, and each and all such remedies shall be
cumulative. The waiver of any breach or violation of this Agreement in whole or
in part shall not operate as a waiver of any subsequent breaches or violations
of the same or a different
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kind. Any exercise or failure to exercise by a party of any rights or remedies
under this Agreement shall not operate as a waiver of the right of such party to
exercise the same or different rights or remedies in a subsequent event.
e. Both parties agree to execute any additional documents or
instruments necessary or appropriate to fully effectuate out the purposes of
this Agreement and which are consistent with the Plan.
f. Section headings in this Agreement are for the convenience
of the parties and are not part of the agreement of the parties and shall not be
used in the construction hereof. Whenever in this Agreement the context
requires, references to the plural shall include the singular and the singular
the plural, and each gender shall include all other genders. No provision in
this Agreement shall be interpreted or construed against any party because such
party or its counsel was the drafter thereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and delivered in duplicate on its behalf by its duly authorized
officer, and Optionee has also executed and delivered this Agreement in
duplicate, all on the date first above written.
OMNIS TECHNOLOGY CORPORATION
By: _________________________________
Xxxxxxx Xxxxx,
President
OPTIONEE
______________________________________
XXXXX X. XXXXX
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