ScanSoft, Inc.
ScanSoft, Inc.
Stock option agreement
(Non-Statutory Stock Option)
This STOCK OPTION AGREEMENT (this "Option Agreement") is, made and entered
into on the execution date of the Option Certificate to which it is attached
(the "Certificate"), by and between ScanSoft, Inc., a Delaware corporation (the
"Company"), and the Director, consultant or employee named in the Certificate
("Optionee"). By executing and delivering the Certificate Optionee will be
deemed to have signed, become a party to and agreed to all the terms of this
Option Agreement.
Pursuant to the ScanSoft, Inc. 1998 Stock Option Plan (the "Plan"), a copy
of which has previously been provided to Optionee, the Board of Directors of the
Company (the "Board") has authorized the grant to Optionee of a non-statutory
stock option to purchase shares of the Company's Common Stock, par value $0.001
per share (the "Common Stock"), upon the terms and subject to the conditions set
forth in this Option Agreement and in the Plan.
The Company and Optionee agree as follows:
1. GRANT OF OPTION.
The Company hereby grants to Optionee the right and option (the "Option"),
upon the terms and subject to the conditions set forth in this Option Agreement,
to purchase all or any portion of that number of shares of the Common Stock (the
"Shares") set forth in the Certificate, at the Option exercise price set forth
in the Certificate (the "Exercise Price").
2. TERM OF OPTION.
The Option shall terminate and expire on the Option Expiration Date set
forth in the Certificate, unless sooner terminated as provided herein.
3. EXERCISE PERIOD.
(a) Subject to the provisions of Paragraphs 3(b), 5, 7(c) and 7(d) of this
Option Agreement, the Option shall vest and become become exercisable (in whole
or in part) upon and after the dates set forth under the caption "Exercise
Schedule " in the Certificate. The installments shall be cumulative, i. e., the
Option may be exercised, as to any or all Shares covered by an installment, at
any time or times
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ScanSoft, Inc.
after the installment vests or first becomes exercisable and until expiration or
termination of the Option.
(b) Notwithstanding anything to the contrary contained in this Option
Agreement, the Option may not be exercised, in whole or in part, unless and
until any then applicable requirements of all federal, state and local laws and
regulatory agencies shall have been fully complied with to the satisfaction of
the Company and its legal counsel.
4. EXERCISE OF OPTION.
There is no obligation to exercise the Option, in whole or in part. The
Option may be exercised, in whole or in part, only by delivery to the Company
of:
(a) written notice of exercise in form and substance identical to Exhibit
"A" attached to this Option Agreement stating the number of shares of Common
Stock then being purchased (the "Purchased Shares"); and
(b) payment of the Exercise Price of the Purchased Shares in cash.
Following receipt of a valid notice and full payment as referred to above,
the Company shall issue and deliver to Optionee a stock certificate or stock
certificates evidencing the Purchased Shares; provided, however, that the
Company shall not be obligated to issue a fraction or fractions of a share of
its Common Stock, and may pay to Optionee, in cash or by check, the Fair Market
Value of any fraction or fractions of a share exercised by Optionee, which Fair
Market Value shall be determined as set forth in the definition of Fair Market
Value in Section 2 of the Plan.
5. TERMINATION OF EMPLOYMENT.
(a) If Optionee shall cease to be a Director of the Company, or to be in
the employ of, or a consultant to or an officer of the Company, or any
Subsidiary for any reason other than a Special Terminating Event (as hereinafter
defined), Optionee shall have the right to exercise the Option at any time
within 80 days after the date Optionee ceased to be a Director of the Company,
or to be employed by, or to be a consultant to the Company, or any Subsidiary
and prior to the date of termination of the Option under Paragraph 2 of this
Option Agreement with respect to all shares with respect to which the Option was
exercisable at the date Optionee's employment or relationship terminated as to
which the Option had not previously been exercised; and to the extent
unexercised at the end of this 80 day period, the Option shall terminate. The
Administrator, in its sole and absolute discretion, shall determine whether or
not authorized leaves of absence shall constitute termination of employment for
purposes of this Option Agreement. As used herein the term "Special Terminating
Event" shall mean Optionee's death, permanent disability, or retirement.
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ScanSoft, Inc.
(b) Upon the termination of Optionee "for cause" as an employee,
consultant, officer or director by the Company, or any Subsidiary, the Option
shall terminate and cease to be exercisable as provided in Section 5(d).
(c) If a Special Terminating Event occurs while Optionee is an employee,
officer, director or consultant to or of the Company, or any Subsidiary, then
Optionee, Optionee's guardians, executors or administrators or any person or
persons acquiring the Option directly from Optionee by will or the laws of
descent and distribution, shall have the right to exercise the entire Option at
any time within one year after such retirement, death or permanent disability,
but not later than the Option Expiration Date; to the extent the Option is
unexercised at the end of that one-year period, the Option will terminate.
(d) Upon the termination of Optionee for "cause" as defined in 5(d)(1)
Optionee shall have the right to exercise the Option at any time within 30 days
after such termination, and prior to the date of termination of the Option under
Paragraph 2 of this Option Agreement, with respect to all Shares with respect to
which the Option was exercisable on the date of such termination and as to which
the Option had not previously been exercised.
Upon the termination of Optionee for "cause" as defined in 5(d)(2) the
Option shall immediately terminate and cease to be exercisable.
For purposes of this Option Agreement, "cause" means:
(1) with respect to any Optionees of the Company:
(i) the failure or refusal by Optionee to perform his duties
to the Company; or
(ii) Optionee's willful disobedience of any lawful orders or
directives of the Board or any officers thereof acting under the
authority thereof or Optionee's deliberate interference with the
compliance by other employees of the Company with any such orders
or directives; or
(iii) the failure or refusal of Optionee to abide by or
comply with the written policies, standard procedures or
regulations of the Company; or
(iv) any willful or continued act or course of conduct by
Optionee which the Board determines might reasonably be expected
to have a material detrimental effect on the Company or the
business, operations, affairs or financial position thereof, or
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ScanSoft, Inc.
(v) the determination by the Board of Directors of the
Company, in the exercise of reasonable discretion, that Optionee
is not competent to perform his duties of employment; or
(vi) with respect to consultants, any material breach of the
consulting agreement with the Company, or any Subsidiary.
(2) With respect to any Optionees of the Company: good cause for
the termination of employment as recognized under applicable law
including, without limitation, the committing by the Optionee of any
fraud, theft, embezzlement or other dishonest act against the Company,
a parent, any Subsidiary or any customer, supplier or other person
with a business relationship with the Company.
(e) For purposes of this Option Agreement, "permanent disability" shall
mean permanent and total disability as defined and determined by the
Administrator in its sole and absolute discretion. Optionee shall not be
considered permanently disabled unless he furnishes proof of such disability in
such form and manner, and at such times, as the Administrator of the Plan may
from time to time require.
6. RESTRICTIONS ON PURCHASED SHARES.
(a) MARKET STAND-OFF.
i) In connection with any underwritten public offering by the Company
of its equity securities pursuant to an effective registration statement
filed under the Securities Act, including the Company's initial public
offering, Optionee shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise
dispose or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to any Purchased Shares or any
securities the value of which is derived by reference to the value of the
Purchased Shares without the prior written consent of the Company or its
underwriters, for such period of time from and after the effective date of
such registration statement as may be requested by the Company or such
underwriters; provided, however, that in no event shall such period exceed
one hundred-eighty (180) days. Optionee agrees to execute and deliver to
the Company such further documents or instruments as the Company reasonably
determines to be necessary or appropriate to effect the provisions of this
Section 6(a).
This Section 6(a)(i) shall only remain in effect for the two-year period
immediately following the effective date of the Company's initial public
offering and shall thereafter terminate and cease to be in force or effect.
ii) In the event of any stock dividend, stock split, recapitalization,
or other change affecting the Company's outstanding Common Stock
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ScanSoft, Inc.
effected without receipt of consideration, then any new, substituted, or
additional securities distributed with respect to the Purchased Shares shall be
immediately subject to the provisions of this Section 6(a), to the same extent
the Purchased Share are at such time covered by such provisions.
iii) In order to enforce the provisions of Section 6(a), the
corporation may impose stop-transfer instructions with respect to the
Purchased Shares until the end of the applicable stand-off period.
(b) RESTRICTION ON TRANSFER.
i) Optionee shall not sell, transfer, assign, encumber, or otherwise
dispose of ("Transfer") any of the Purchased Shares that are subject to the
Company's Repurchase Right under Section 6(c). In addition, Purchased
Shares that are released from the Repurchase Right shall not be Transferred
in contravention of the Company's First Refusal Right under Section 6(d) or
the provisions of Section 6(e). The restrictions contained in Section 6(d)
shall not be applicable to (i) a transfer of the Purchased Shares made
without consideration to the Optionee's spouse or issue, including adopted
children, or to a trust for the exclusive benefit of the Optionee or the
Optionee's spouse or issue or (ii) a transfer of title to the Purchased
Shares effected pursuant to the Optionee's will or the laws of descent and
distribution.
ii) Each person to whom the Purchased Shares are transferred by means
of one of the permitted transfers specified in Section 6(b)(i) must, as a
condition precedent to the validity of such transfer, acknowledge in
writing to the Company that such person is bound by the provisions of this
Agreement including that the transferred shares are subject to (i) both the
Company's Repurchase Right (Section 6(c)) and the Company's First Refusal
Right (Section 6(b)) granted hereunder and (ii) the market stand-off
provisions of Section 6(a), to the same extent such shares would be so
subject if retained by the Optionee.
iii) For purposes of Sections 6(b), 6(c) and 6(d) of this Agreement,
the term "Owner" shall include the Optionee and all subsequent holders of
the Purchased Shares who derive their chain of ownership through a
permitted transfer from the Optionee in accordance with Section 6(b)(i).
(c) REPURCHASE RIGHT.
i) GRANT. The Company is hereby granted the right (the "Repurchase
Right") exercisable (A) if the Options have been fully exercised prior to
termination of Optionee's employment, consultancy, officership or
directorship with the Company or any Subsidiary, within the sixty (60) day
period following such termination, or (B) if the Options have not been
fully exercised prior to such, at any time during the thirty (30) day
period following the last day upon which Optionee or Optionee's
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ScanSoft, Inc.
guardians, executors or administrators or any person or persons acquiring the
Option directly from Optionee by will or the laws of descent and distribution,
is permitted to exercise the Option pursuant to the provisions of Section 5
above, to repurchase all of the Purchased Shares at Fair Market Value as of the
date of termination.
ii) Exercise of the Repurchase Right. The Repurchase Right shall be
exercisable by written notice delivered to the Owner of the Purchased
Shares prior to the expiration of the applicable period specified in
Section 6(c)(i). The notice shall indicate the number of Purchased Shares
to be repurchased and the date on which the repurchase is to be effected,
such date to be not more than thirty (30) days after the date of notice.
Owner shall, prior to the close of business on the date specified for the
repurchase, deliver to the Secretary of the Company the certificates
representing the Purchased Shares to be repurchased, each certificate to be
properly endorsed for transfer. The Company shall, concurrently with the
receipt of such stock certificates from Owner, pay to Owner in cash or cash
equivalents (including the cancellation of any purchase money indebtedness
of the Optionee to the Company), an amount equal to the Fair Market Value
of the Purchased Shares that are to be repurchased.
iii) Termination of the Repurchase Right. The Repurchase Rights and
First Refusal Rights shall lapse and cease to have effect upon the earlier
to occur of (1) the first date on which shares of the Company's Common
Stock are held of record by more than five hundred (500) persons, (2) a
determination by the Company's Board of Directors that a public market
exists for the outstanding shares of the Company's Common Stock or (3) the
closing of a public offering pursuant to an effective registration
statement under the Securities Act, covering the offer and sale of Common
Stock by the Company with aggregate proceeds to the Company of $10,000,000
or more.
(d) RIGHT OF FIRST REFUSAL
i) GRANT. The Company is hereby granted the right of first refusal
(the "First Refusal Right"), exercisable in connection with any proposed
Transfer of the Purchased Shares. For purposes of this Section 6(d), the
term "Transfer" shall not include any of the permitted transfers under
Section 6(b)(i).
ii) NOTICE OF INTENDED DISPOSITION. In the event the Owner desires to
accept a bona fide third-party offer for any or all of the Purchased Shares
(the shares subject to such offer to be hereinafter called, solely for the
purposes of this Section 6(d), the "Target Shares"), Owner shall promptly
(i) deliver to the Secretary of the Company written notice (the
"Disposition Notice") of the offer and the basic terms and conditions
thereof, including the proposed purchase price, and (ii) provide
satisfactory proof that the disposition of the Target Shares to the
third-party offeror
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ScanSoft, Inc.
would not be in contravention of the provisions set forth in Sections 6(b),
6(c) and 6(e) of this Agreement.
iii) Exercise of Right. The Company (or its assignees) shall, for a
period of thirty (30) days following receipt of the Disposition Notice,
have the right to repurchase all of the Target Shares specified in the
Disposition Notice upon substantially the same terms and conditions
specified therein. Such right shall be exercisable by written notice (the
"Exercise Notice") delivered to Owner prior to the expiration of the thirty
(30) day exercise period. The Company (or its assignees) shall effect the
repurchase of the Target Shares, including payment of the purchase price,
not more than five (5) business days after delivery of the Exercise Notice;
and at such time Owner shall deliver to the Company the certificates
representing the Target Shares to be repurchased, each certificate to be
properly endorsed for transfer. The Target Shares so purchased shall
thereupon be canceled and cease to be issued and outstanding shares of the
Company's Common Stock.
Should the purchase price specified in the Disposition Notice be payable in
property other than cash or evidences of indebtedness, the Company (or its
assignees) shall have the right to pay the purchase price in the form of cash
equal in amount to the value of such property. If the Owner and the Company (or
its assignees) cannot agree on such cash value within ten (10) days after the
Company's receipt of the Disposition Notice, the valuation shall be made by an
appraiser of recognized standing selected by the Owner and the Company (or its
assignees), or, if they cannot agree on an appraiser within twenty (20) days
after the Company's receipt of the Disposition Notice, each shall select an
appraiser of recognized standing and the two appraisers shall designate a third
appraiser of recognized standing, whose appraisal shall be determinative of such
value. The cost of such appraisal shall be paid equally by the Company and the
Owner. The closing shall then be held on the later of (i) the fifth business day
following delivery of the Exercise Notice or (ii) the 15th day after such cash
valuation shall have been made.
iv) NON-EXERCISE OF RIGHT. In the event the Exercise Notice is not
given to Owner within thirty (30) days following the date of the Company's
receipt of the Disposition Notice, Owner shall have a period of thirty (30)
days thereafter, in which to sell or otherwise dispose of the Target Shares
upon terms and conditions (including the purchase price) no more favorable
to the third-party purchaser than those specified in the Disposition
Notice; provided, however, that any such sale or disposition must not be
effected in contravention of the provisions of Section 6(e) of this
Agreement. The third-party purchaser shall acquire the Target Shares free
and clear of all the terms and provisions of this Agreement (including the
Company's Repurchase Right under Section 6(d) and the Company's First
Refusal Right hereunder). In the event Owner does not sell or otherwise
dispose of the Target Shares within the specified thirty (30) day period,
the Company's First Refusal Right shall continue to be applicable to any
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ScanSoft, Inc.
subsequent disposition of the Target Shares by Owner until such right
lapses in accordance with Section 6(d)(v).
v) TERMINATION OF THE FIRST REFUSAL RIGHT. The First Refusal Right
under this Section 6(d) shall lapse and cease to have effect upon the
earlier to occur of (1) the first date on which shares of the Company's
Common Stock are held of record by more than five hundred (500) persons,
(2) a determination by the Company's Board of Directors that a public
market exists for the outstanding shares of the Company's Common Stock or
(3) the closing of a public offering pursuant to an effective registration
statement under the Securities Act, covering the offer and sale of Common
Stock by the Company with aggregate proceeds to the Company of $10,000,000
or more. However, the market standoff provisions of 6(a) shall continue to
remain in full force and effect following the lapse of the First Refusal
Right hereunder.
vi) LEGEND. All certificates representing Purchased Shares subject to
the Right of First Refusal shall be endorsed with the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST
TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF
FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES. THE SECRETARY
OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."
(e) RECAPITALIZATION.
i) In the event of any stock dividend, stock split, reverse stock
split, recapitalization or other transaction affecting the Company's
outstanding Common Stock as a class effected without receipt of
consideration, then any new, substituted or additional securities or other
property which is by reason of such transaction distributed with respect to
the Purchased Shares shall be immediately subject to the provisions of this
Option Agreement, but only to the extent the Purchased Shares are at that
time covered by any such provisions.
ii) In the event of a Reorganization Event (as defined in Paragraph
7(c)), the Company's Repurchase Right and First Refusal Right shall remain
in full force and effect and shall apply to the new capital stock or other
property received in exchange for the Purchased Shares in consummation of
the
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ScanSoft, Inc.
Corporate Transaction, but only to the extent the Purchased Shares are at
the time covered by such rights.
(f) SECURITIES LAW RESTRICTIONS. None of the Purchased Shares shall be
Transferred (with or without consideration) and the Company shall not be
required to register any such Transfer and the Company may instruct its transfer
agent not to register any such Transfer, unless and until all of the following
events shall have occurred:
(i) the Purchased Shares are Transferred pursuant to and in conformity
with (1) (x) an effective registration statement filed with the SEC
pursuant to the Securities Act, as amended (the "Act"), or (y) an exemption
from registration under the Act, and (2) the securities laws of any state
of the United States; and
(ii) Optionee has, prior to the Transfer of such Purchased Shares, and
if requested by the Company, provided all relevant information to the
Company and Company's legal counsel so that upon Company's request,
Company's legal counsel is able to, and actually prepares and delivers to
the Company a written opinion that the proposed Transfer (1) (x) is
pursuant to a registration statement which has been filed with the SEC and
is then effective, or (y) is exempt from registration under the Securities
Act as then in effect, and (2) is either qualified or registered under any
applicable state securities laws, or exempt from such qualification or
registration. The Company shall bear all costs of preparing such opinion.
(g) NONCOMPLYING TRANSFERS INVALID. Any attempted Transfer which is not in
full compliance with this Paragraph 6 shall be null and void ab initio, and of
no force or effect.
7. ADJUSTMENTS UPON RECAPITALIZATION.
Subject to any required action by the shareholders of the Company:
(a) If the outstanding shares of the Common Stock shall be subdivided into
a greater number of shares of the Common Stock or a dividend in shares of Common
Stock or other securities of the Company convertible into or exchangeable for
shares of the Common Stock (in which latter event the number of shares of Common
Stock issuable upon the conversion or exchange of such securities shall be
deemed to have been distributed) shall be paid in respect of the shares of
Common Stock, the Exercise Price in effect immediately prior to such subdivision
or at the record date of such dividend shall, simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend, be proportionately reduced, and conversely, if the outstanding shares
of Common Stock shall be combined into a smaller number of shares of Common
Stock, the Exercise Price in effect immediately
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ScanSoft, Inc.
prior to such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased.
(b) When any adjustment is required to be made in the Exercise Price, the
number of Shares purchasable upon the exercise of the Option shall be adjusted
to that number of Shares determined by (i) multiplying an amount equal to the
number of Shares purchasable on the exercise of the Option immediately prior to
such adjustment by the Exercise Price in effect immediately prior to such
adjustment, and then (ii) dividing that product by the Exercise Price in effect
immediately after such adjustment.
(c) In case of any capital reorganization, any reclassification of the
Common Stock (other than a change in par value or recapitalization described in
Paragraph 7(a) of this Option Agreement), or the consolidation of the Company
with, or a sale of substantially all of the assets of the Company to (which sale
is followed by a liquidation or dissolution of the Company), or merger of the
Company with another person (a "Reorganization Event"), the Administrator shall
be obligated to determine whether the Reorganization Event shall constitute a
"Liquidity Event," and to deliver to Optionee at least 15 days prior to such
Reorganization Event a notice which shall (i) indicate whether the
Reorganization Event is a Liquidity Event and (ii) advise Optionee of his or her
rights pursuant to this Option Agreement. If the Reorganization Event is
determined to be a Liquidity Event, in its sole and absolute discretion, the
surviving corporation may, but shall not be obligated to, (i) tender to Optionee
Stock Options with respect to the surviving corporation which shall contain
terms and provisions that substantially preserve the rights and benefits of this
Option, and (ii) in the event that no Stock Options have been tendered by the
surviving corporation pursuant to the terms of item "(i)" immediately above,
Optionee shall have the right exercisable during a ten-day period ending on the
fifth day prior to the Reorganization Event to exercise his or her Stock
Options, to the extent that such Stock Options are then exercisable, in whole or
in part, on the condition, however, that the Reorganization Event is actually
effected; and if the Reorganization Event is actually effected, such exercise
shall be deemed effective (and, if applicable, the Optionee shall be deemed a
shareholder with respect to the Stock Options exercised) immediately preceding
the effective time of the Reorganization Event (or on the date of record for
shareholders entitled to share in the securities or property distributed in the
Reorganization Event, if a record date is set).
If the Reorganization Event is not determined to be a Liquidity Event,
Optionee shall thereafter be entitled upon exercise of the Option to purchase
the kind and number of shares of stock or other securities, cash or other
property of the surviving corporation receivable upon such event by a holder of
the number of shares of the Common Stock which the Option entities Optionee to
purchase from the Company immediately prior to such event, and in any such case,
appropriate adjustment shall be made in the application of the provisions set
forth in this Option Agreement with respect to Optionee's rights and interests
thereafter, to the end that the provisions set forth in this Option Agreement
(including the specified changes and
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ScanSoft, Inc.
other adjustments to the Exercise Price) shall thereafter be applicable in
relation to any shares or other property thereafter purchasable upon exercise of
the Option.
(d) In the event of the proposed dissolution or liquidation of the Company,
or in the event of any corporate separation or division, including, but not
limited to, a split-up, split-off or spin-off (each, a "Liquidating Event"), the
Administrator may provide that the holder of any Stock Option then exercisable
shall have the right to exercise such Stock Option (at the price provided in the
Stock Option Agreement) subsequent to the Liquidating Event, and for the balance
of its term, solely for the kind and amount of shares of Stock and other
securities, cash or other property or any combination thereof receivable upon
such Liquidating Event by a holder of the number of shares of Stock for or with
respect to which such Stock Option might have been exercised immediately prior
to such Liquidating Event; or, in the alternative, that each Stock Option
granted under the Plan shall terminate as of a date to be fixed by the Board;
provided, however, that not less than 30 days written notice of the date so
fixed shall be given to each Option Holder and if such notice is given, each
Option Holder shall have the right, during the period of 30 days preceding such
termination, to exercise the Stock Option as to all or any part of the shares of
Stock covered thereby, to the extent that such Stock Option is then exercisable,
on the condition, however, that the Liquidating Event actually occurs; and if
the Liquidating Event actually occurs, such exercise shall be deemed effective
(and, if applicable, the Option Holder shall be deemed a shareholder with
respect to the Stock Options exercised) immediately preceding the occurrence of
the Liquidating Event, or the date of record for shareholders entitled to share
in such Liquidating Event, if a record date is set.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Administrator
of the Plan, and its determination shall be final, binding and conclusive.
(f) The provisions of this Paragraph 7 are intended to be exclusive, and
Optionee shall have no other rights upon the occurrence of any of the events
described in this Paragraph 7.
(g) The grant of the Option shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes in its capital or business structure, or to merge, consolidate, dissolve
or liquidate, or to sell or transfer all or any part of its business or assets.
8. INVESTMENT INTENT.
Optionee represents and agrees that if he or she exercises the Option in
whole or in part and if at the time of such exercise the Plan and/or the
Purchased Shares have not been registered under the Securities Act, he or she
will acquire the Shares upon such exercise for the purpose of investment and not
with a view to the
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distribution of such Shares, and that upon each exercise of the Option he or she
will furnish to the Company a written statement to such effect in a form
prescribed by the Administrator.
9. LEGEND ON STOCK CERTIFICATES.
Optionee agrees that all certificates representing the
Purchased Shares will be subject to such stock transfer orders and other
restrictions (if any) as the Company or Administrator may deem advisable under
the rules, regulations and other requirements of the SEC, any stock exchange
upon which the Common Stock is then listed and any applicable federal or state
securities laws, and the Company or Administrator may cause a legend or legends
to be put on such certificates to make appropriate reference to such
restrictions.
10. NO RIGHTS AS SHAREHOLDER.
Except as provided in Article 7 of the Plan, Optionee shall have no rights
as a shareholder with respect to the Shares until the date of the issuance to
Optionee of a stock certificate or stock certificates evidencing such Shares.
Except as may be provided in Paragraph 7 of this Option Agreement, no adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued.
11. INTERPRETATION.
The Administrator shall have the authority to interpret the Plan and this
Option Agreement and to take whatever administrative actions, correction of
administrative errors in the Certificate, this Agreement or the award of options
under the Plan, as the Administrator in its sole good faith judgment shall
determine to be advisable. All decisions, interpretations and administrative
actions made by the Administrator hereunder or under the Plan shall be binding
on the Company and the Optionee (including successors and assigns).
12. WITHHOLDING.
The Company shall be entitled to require as a condition of delivery of any
Purchased Shares upon exercise of any Option that the Optionee agree to remit,
at the time of such delivery or at such later date as the Company may determine,
an amount sufficient to satisfy all federal, state and local withholding tax
requirements relating thereto, and Optionee agrees to take such other action
required by the Company to satisfy such withholding requirements.
13. CHARACTER OF OPTION.
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The Option is not intended to qualify as an "incentive stock option" as
that term is defined in Section 422 of the Code.
14. GENERAL PROVISIONS.
(a) Further Assurances. Optionee shall promptly take all actions and
execute all documents requested by the Company or Administrator which they deem
to be reasonably necessary to effectuate the terms and intent of this Option
Agreement.
(b) Notices. All notices, requests, demands and other communications under
this Option Agreement shall be in writing and shall be given to the parties
hereto as follows:
i) If to the Company, to:
ScanSoft, Inc.
Corporate Secretary
X.X. Xxx 0000
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
ii) If to Optionee, to the address set
forth in the records of the Company,
or at such other address or addresses as may have been furnished by such either
party in writing to the other party hereto. Any such notice, request, demand or
other communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mail by first-class certified mail, return
receipt requested, postage prepaid, addressed as aforesaid, or (ii) if given by
any other means, when delivered at the address specified in this subparagraph
(b).
(c) TRANSFER OF RIGHTS UNDER THIS OPTION AGREEMENT. The Company may at any
time transfer and assign its rights and delegate its obligations under this
Option Agreement to any other person, corporation, firm or entity, including its
officers, directors and stockholders, with or without consideration.
(d) OPTION NON-TRANSFERABLE. Optionee may not sell, transfer, assign or
otherwise dispose of the Option except by will or the laws of descent and
distribution as permitted herein and Stock Options may be exercised during the
lifetime of the Option Holder only by the Option Holder or by his or her
guardian or legal representative.
(e) SUCCESSORS AND ASSIGNS. Except to the extent specifically limited by
the terms and provisions of this Option Agreement, this Option Agreement shall
be
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ScanSoft, Inc.
binding upon and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and personal representatives.
(f) GOVERNING LAW. THIS OPTION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
MADE IN, AND TO BE PERFORMED WITHIN, THAT STATE.
(g) THE PLAN. This Option Agreement is made pursuant to the Plan, and it is
intended, and shall be interpreted in a manner, to comply therewith. Any
provision of this Option Agreement inconsistent with the Plan shall be
superseded and governed by the Plan.
(h) MISCELLANEOUS. Titles and captions contained in this Option Agreement
are inserted for convenience of reference only and do not constitute a part of
this Option Agreement for any other purpose. Capitalized terms used in this
Option Agreement and not otherwise defined herein have the meaning defined in
the Plan. Except as specifically provided herein, neither this Option Agreement
nor any right pursuant hereto or interest herein shall be assignable by any of
the parties hereto without the prior written consent of the other party hereto.
ScanSoft, Inc.
By:____________________________
Xxxxxxx X. Xxxxxx, President
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ScanSoft, Inc.
Exhibit "A"
NOTICE OF EXERCISE
(To be signed only upon exercise of the Option)
TO: ScanSoft, Inc.
The undersigned, the holder of the enclosed Stock Option Agreement
(Non-Statutory Stock Option), hereby irrevocably elects to exercise the purchase
rights represented by the Option and to purchase thereunder __________* shares
of Common Stock of ScanSoft, Inc. (the "Company"), and herewith encloses payment
of $_________ in full payment of the purchase price of such shares being
purchased. Date signed: _______________
______________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the Option)
______________________________________
(Please Print Name)
______________________________________
(Address)
*Insert here the number of shares called for on the face of the Option (or,
in the case of a partial exercise, the number of shares being exercised), in
either case without making any adjustment for additional Common Stock of the
Company, other securities or property which, pursuant to the adjustment
provisions of the Option, may be deliverable upon exercise.
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