EXHIBIT 10.3
TEKELEC
NONSTATUTORY STOCK OPTION AGREEMENT
Tekelec, a California corporation (the "Company"), hereby enters into this
Nonstatutory Stock Option Agreement (this "Option Agreement") with Xxxxxxxxx X.
Xxx (the "Optionee") effective as of the 1st day of February, 2001, whereby the
Company grants to the Optionee the right and option to purchase an aggregate of
350,000 shares of Common Stock (the "Shares") of the Company.
1. Nature of the Option. This Option is intended to be a nonstatutory stock
option and is not intended to be an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or to
otherwise qualify for any special tax benefits to the Optionee.
2. Exercise Price. The exercise price is $27.56 per Share, which price is
not less than 100% of the fair market value thereof on the date of the grant.
3. Method of Payment. The consideration to be paid for the Shares to be
issued upon exercise of this Option shall consist entirely of cash or check
payable to the Company.
4. Exercise of Option. This Option shall be exercisable during its term
only in accordance with the terms and provisions of this Option Agreement as
follows:
(a) This Option shall vest and become exercisable cumulatively as to
87,500 Shares on February 1, 2002 and as to the remaining 262,500 Shares in 12
equal quarterly installments of 21,875 shares each, with the first installment
vesting on June 30, 2002 and one additional installment vesting on the last day
of each calendar quarter thereafter, as long as the Optionee continues to serve
as an employee of the Company. The Optionee may exercise the exercisable portion
of this Option in whole or in part at any time during his employment provided he
has been in continuous employment with the Company since the grant of this
Option. However, the Option may not be exercised for a fraction of a Share. In
the event of the Optionee's termination of employment with the Company or
disability or death, the provisions of Sections 6 or 7 below, as applicable,
shall apply to the right of the Optionee to exercise this Option.
(b) This Option shall be exercisable by written notice which shall
state the election to exercise this Option, the number of Shares in respect to
which this Option is being exercised and such other representations and
agreements 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 Secretary of the Company or such other person as may be designated by the
Company. The written notice shall be accompanied by payment of the purchase
price and an executed Notice of Exercise of Stock Option in the form attached
hereto. As soon as practicable after any proper exercise of this Option in
accordance with the provisions hereof, the Company shall deliver to the Optionee
at the principal executive office of the Company or such other place as shall be
mutually agreed upon between the Company and the Optionee, a certificate or
certificates representing the
EXHIBIT 10.3
Shares for which the Option shall have been exercised. The certificate or
certificates for the Shares as to which this Option is exercised shall be
registered in the name of the Optionee.
(c) No rights of a shareholder shall exist with respect to the Shares
under this Option as a result of the mere grant of this Option or the exercise
of this Option. Such rights shall exist only after issuance of a stock
certificate in accordance with Section 4(b) hereof.
5. Restrictions on Exercise. This Option may not be exercised if the
issuance of Shares upon the Optionee's exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
Federal or state securities law or other applicable law or regulation. As a
condition to the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be required by any
applicable law or regulation.
6. Termination of Employment. If the Optionee ceases to serve as an
employee of the Company for any reason other than death or permanent and total
disability (within the meaning of Section 22(e)(3) of the Code) and thereby
terminates his continuous status as an employee of the Company, the Optionee
shall have the right to exercise this Option at any time within three months
after the date of such termination to the extent that the Optionee was entitled
to exercise this Option at the date of such termination. To the extent that the
Optionee was not entitled to exercise this Option at the date of termination, or
to the extent this Option is not exercised within the time specified herein,
this Option shall terminate. Notwithstanding the foregoing, this Option shall
not be exercisable after the expiration of the term set forth in Section 8
hereof.
7. Death or Disability. If the Optionee ceases to serve as an employee of
the Company due to death or permanent and total disability (within the meaning
of Section 22(e)(3) of the Code), this Option may be exercised at any time
within six months after the date of death or termination of employment due to
disability, in the case of death, by the Optionee's estate or by a person who
acquired the right to exercise this Option by bequest or inheritance, or, in the
case of disability, by the Optionee, but in any case only to the extent the
Optionee was entitled to exercise this Option at the date of such termination.
To the extent that the Optionee was not entitled to exercise this Option at the
date of termination, or to the extent this Option is not exercised within the
time specified herein, this Option shall terminate. Notwithstanding the
foregoing, this Option shall not be exercisable after the expiration of the term
set forth in Section 8 hereof.
8. Term of Option. This Option may not be exercised more than ten years
from the date of grant of this Option and may be exercised during such term only
in accordance with the terms of this Option Agreement. Notwithstanding any
provision herein with respect to the post-employment exercise of this Option,
this Option may not be exercised after the expiration of its term.
9. Reservation of Shares. The Company covenants and agrees that all Shares
will, upon issuance and payment in accordance herewith, be fully paid, validly
issued and nonassessable. The Company further covenants and agrees that during
the term of this Option, the Company will at all times have authorized and
reserved for the purpose of issuance upon exercise of this Option at least the
maximum number of Shares as are issuable upon such exercise.
EXHIBIT 10.3
10. Dissolution; Liquidation, Consolidation, Merger or Reclassification. In
the event that while the Optionee is an employee of the Company, the Company
proposes to dissolve or liquidate or to sell all or substantially all of its
assets (other than in the ordinary course of business), or to merge or
consolidate with or into another corporation as a result of which the Company is
not the surviving and controlling corporation, the Board of Directors shall (i)
make provision for the assumption of this Option by the successor corporation or
(ii) declare that this Option shall terminate as of a date fixed by the Board of
Directors which is at least 30 days after the notice thereof to the Optionee and
shall give the Optionee the right to exercise this Option as to all or any part
of the Shares, including Shares as to which this Option would not otherwise be
exercisable provided such exercise does not violate Section 8 hereof.
11. Adjustment of Exercise Price and Number of Shares.
(a) The number of Shares subject to this Option, as well as the
exercise price per Share hereunder shall be proportionately adjusted for any
increase or decrease in the number of issued shares of the Company's Common
Stock resulting from a stock split or combination or the payment of a stock
dividend (but only on the Company's Common Stock) or any other increase or
decrease in the number of issued shares of the Company's Common Stock effected
without receipt of consideration by the Company (other than stock awards to
employees of the Company); provided, however, that the conversion of any
convertible securities of the Company shall not be deemed to have been effected
without the receipt of consideration. Such adjustment shall be automatic and the
form of this Agreement need not be changed because of any such adjustment in the
exercise price or in the number of Shares purchasable upon exercise of all or
any portion of this Option. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares subject to this Option.
(b) No fractional shares of Common Stock shall be issuable on account
of any action contemplated by Section 10 or Section 11(a) hereof, and the
aggregate number of shares into which Shares then covered by this Option, when
changed as the result of any such action, shall be reduced to the largest number
of whole shares resulting from such action, unless the Company's Board of
Directors, in its sole discretion, shall determine to issue scrip certificates
in respect to any fractional shares, which scrip certificates shall be in a form
and have such terms and conditions as the Board of Directors in its discretion
shall prescribe.
12. Withholding upon Exercise of Option. The Company reserves the right to
withhold, in accordance with any applicable laws, from any consideration payable
to the Optionee any taxes required to be withheld by Federal, state or local law
as a result of the grant or exercise of this Option or the sale or other
disposition of the Shares issued upon exercise of this Option. If the amount of
any consideration payable to the Optionee is insufficient to pay such taxes or
if no consideration is payable to the Optionee, upon the request of the Company,
the Optionee shall pay to the Company in cash an amount sufficient for the
Company to satisfy any Federal, state or local tax withholding requirements it
may incur as a result of the grant or exercise of this Option or the sale or
other disposition of the Shares issued upon the exercise of this Option.
EXHIBIT 10.3
13. Nontransferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution or transfer between spouses incident to a
divorce. Subject to the foregoing, the terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
14. No Right of Employment. This Option shall not confer upon the Optionee
any right to continue in the employment of the Company or limit in any respect
the right of the Company to discharge the Optionee at any time, with or without
cause and with or without notice.
15. Miscellaneous.
(a) Successors and Assigns. This Option Agreement shall bind and inure
only to the benefit of the parties to this Option Agreement (the "Parties") and
their respective successors and assigns.
(b) No Third-Party Beneficiaries. Nothing in this Option Agreement is
intended to confer any rights or remedies on any persons other than the Parties
and their respective successors or assigns. Nothing in this Option Agreement is
intended to relieve or discharge the obligation or liability of third persons to
any Party. No provision of this Option Agreement shall give any third person any
right of subrogation or action over or against any Party.
(c) Amendments.
(i) The Company reserves the right to amend the terms and
provisions of this Option without the Optionee's consent to comply with any
Federal or state securities law.
(ii) Except as specifically provided in subsection (i) above,
this Option Agreement shall not be changed or modified, in whole or in part,
except by supplemental agreement signed by the Parties. Either Party may waive
compliance by the other Party with any of the covenants or conditions of this
Option Agreement, but no waiver shall be binding unless executed in writing by
the Party making the waiver. No waiver or any provision of this Option Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. Any consent
under this Option Agreement shall be in writing and shall be effective only to
the extent specifically set forth in such writing. For the protection of the
Parties, amendments, waivers and consents that are not in writing and executed
by the Party to be bound may be enforced only if they are detrimentally relied
upon and proved by clear and convincing evidence. Such evidence shall not
include any alleged reliance.
(d) Notice. Any notice, instruction or communication required or
permitted to be given under this Option Agreement to either Party shall be in
writing and shall be deemed given when actually received or, if earlier, five
days after deposit in the United States mail by certified or express mail,
return receipt requested, first class postage prepaid, addressed to the
principal office of such Party or to such other address as such Party may
request by written notice.
EXHIBIT 10.3
(e) Governing Law. To the extent that Federal laws do not otherwise
control, all determinations made or actions taken pursuant hereto shall be
governed by the laws of the State of California, without regard to the conflict
of laws rules thereof.
(f) Entire Agreement. This Option Agreement constitutes the entire
agreement between the Parties with regard to the subject matter hereof. This
Option Agreement supersedes all previous agreements between the Parties, and
there are now no agreements, representations, or warranties between the Parties,
other than those set forth herein.
(g) Severability. If any provision of this Option Agreement or the
application of such provision to any person or circumstances is held invalid or
unenforceable, the remainder of this Option Agreement, or the application of
such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby.
IN WITNESS WHEREOF, this Option Agreement has been duly executed on behalf
of the Company by an authorized representative of the Company and by the
Optionee as of the date and year first written above.
DATE OF GRANT: February 1, 2001 Tekelec
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
/s/ Xxxxxxxxx X. Xxx
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Xxxxxxxxx X. Xxx
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXECUTION OF
THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE,
TRANSFER OR DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
EXHIBIT 10.3
TEKELEC
NOTICE OF EXERCISE OF NONSTATUTORY STOCK OPTION
I, Xxxxxxxxx X. Xxx ("Optionee"), hereby agree, represent and warrant to
Tekelec (the "Company") as follows:
1. I was granted a Nonstatutory Stock Option (the "Option") on February
1, 2001.
2. Pursuant to the Option, I was granted the right to purchase
____________ shares of the Company's Common Stock (the "Optioned
Shares").
3. I am eligible to exercise the Option.
4. I hereby elect to exercise the Option to purchase ___________ of such
Optioned Shares (the "Shares") at U.S.$___________ per share, for an
aggregate purchase price of U.S.$___________.
5. Payment of Purchase Price (please check applicable box):
|_| This Notice of Exercise is accompanied by payment in full of the
purchase price for the shares in the form of cash or check.
OR
|_| This exercise is a "cashless exercise" effected through my
broker. Payment in full for the Shares in the form of a check
will be transmitted by my broker to the Company.
6. In connection with my exercise of the Option, I have received a copy
of any Prospectus of the Company's relating to the shares of the
Company's Common Stock issuable under the Option.
Dated: ________________, 200__ OPTIONEE
Signature:
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Social Security Number Xxxxxxxxx X. Xxx
Address:
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Received on behalf of Tekelec on ____________________, 200__.
Signature:
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