STOCK OPTION GRANT AGREEMENT
CompuCom Systems, Inc., a Delaware corporation (the "Company"), hereby
grants to the grantee named below ("Grantee") an option (this "Option") to
purchase the total number of shares shown below of Common Stock of the Company
(the "Shares") at the exercise price per share set forth below, subject to all
of the terms and conditions contained in this Stock Option Grant Agreement.
Grant Date: October 22, 1998
Type of Option: Non-Qualified Stock Option
Shares Subject to Option: 500,000
Exercise Price Per Share: $3.1875
Term of Option: 10 years
Shares subject to issuance under this Option do not vest until the
first anniversary of the grant, and then shall vest according to the following
vesting schedule:
October 22, 1999 to October 21, 2000 25%
October 22, 2000 to October 21, 2001 50%
October 22, 2001 to October 21, 2002 75%
On or after October 22, 2002 100%
This Option shall become exercisable by Grantee at any time
following grant, subject to repurchase of any unvested Shares by the Company
in the event of Grantee's termination of employment for any reason prior to
the scheduled vesting date for such Shares. The purchase price for such
unvested Shares shall be equal to purchase price paid for such shares. In the
event Grantee exercises this Option to purchase unvested Shares, the
certificate(s) representing such Shares shall be held in escrow by the
Company until such time as the Shares become vested, and Grantee shall
deposit with the Company a duly executed assignment separate from certificate
containing a medallion signature guarantee.
Grantee acknowledges that the grant and exercise of this Option, and
the sale of Shares obtained through the exercise of this Option, may have tax
implications that could result in adverse tax consequences to the Grantee and
that Grantee is not relying on the Company for any tax, financial or legal
advice and will consult a tax adviser prior to such exercise or disposition.
1. Option Expiration. The Option shall automatically terminate upon the
happening of the first of the following events:
(a) The expiration of the three-month period after the Grantee ceases
to be employed by, or in the service of, the Company if the termination is for
any reason other than disability, death or cause;
(b) The expiration of the one-year period after the Grantee ceases to
be employed by, or in the service of, the Company on account of the Grantee's
disability;
(c) The expiration of the one-year period after the Grantee ceases to
be employed by, or in the service of, the Company, if the Grantee dies while
employed by the Company or within three months after the Grantee ceases to be so
employed or provide such services on account of a termination described in
subparagraph (a) above; or
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(d) The date on which the Grantee ceases to be employed by the Company
for cause. For purposes of this Option, cause shall mean, except to the extent
otherwise specified by the Committee, a finding by the Committee that the
Grantee has breached his employment or service contract, non-competition
agreement or other obligation with the Company, or has been engaged in
disloyalty to the Company, including without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course of his
employment of service, or has disclosed trade secrets or confidential
information of the Company to persons not entitled to receive such information.
Notwithstanding the foregoing, in no event may the Option be exercised
after the expiration of the Term of Option specified herein. Any portion of the
Option that is not vested at the time the Grantee ceases to be employed by, or
in the service of, the Company shall immediately terminate.
In the event a Grantee ceases to be employed by the Company for cause,
the Grantee shall automatically forfeit all shares underlying any exercised
portion of an Option for which the Company has not yet delivered the share
certificates upon refund by the Company of the exercise price paid by the
Grantee for such shares.
2. Exercise Procedures.
(a) Subject to the provisions of this Stock Option Grant Agreement, the
Grantee may exercise part or all of the vested Option by giving the Company
written notice of intent to exercise in the manner provided in Paragraph 10
below, specifying the number of Shares as to which the Option is to be
exercised. On the delivery date, the Grantee shall pay the exercise price (i) in
cash, (ii) by delivering Shares of the Company (duly endorsed for transfer or
accompanied by stock powers signed in blank) which shall be valued at their fair
market value on the date of delivery, or (iii) by such other method as the
Committee may approve, including payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board or delivery of
a promissory note. The Board may impose from time to time such limitations as it
deems appropriate on the use of Shares of the Company to exercise the Option.
(b) The obligation of the Company to deliver Shares upon exercise of
the Option shall be subject to all applicable laws, rules, and regulations and
such approvals by governmental agencies as may be deemed appropriate by the
Board, including such actions as Company counsel shall deem necessary or
appropriate to comply with relevant securities laws and regulations. The Company
may require that the Grantee (or other person exercising the Option after the
Grantee's death) represent that the Grantee is purchasing Shares for the
Grantee's own account and not with a view to or for sale in connection with any
distribution of the Shares, or such other representation as the Board deems
appropriate. All obligations of the Company under this Stock Option Grant
Agreement shall be subject to the rights of the Company to withhold amounts
required to be withheld for any taxes, if applicable, or to deduct from other
wages paid by the Company the amount of any withholding taxes due with respect
to such Options. Subject to Committee approval, the Grantee may elect to satisfy
any income tax withholding obligation of the Company with respect to the Option
by having Shares withheld up to an amount that does not exceed the maximum
marginal tax rate for federal (including FICA), state and local tax liabilities.
3. Restrictions on Exercise. Only the Grantee may exercise the Option
during the Grantee's lifetime. After the Grantee's death, the Option shall be
exercisable solely by the legal representatives of the Grantee, or by the person
who acquires the right to exercise the Option by will or by the laws of descent
and distribution, to the extent that the Option is exercisable pursuant to this
Stock Option Grant Agreement. Notwithstanding anything in this Stock Option
Grant Agreement to the contrary, the Committee may provide, at or after grant,
that a Grantee may transfer non-qualified stock options pursuant to a domestic
relations order or to family members or other persons or entities on such terms
as the Committee may determine.
4. Grant Subject to Committee Authority. The grant and exercise of this
Option are subject to the interpretations, regulations and determinations
concerning this Option established from time to time by the Committee that
administers the Company's stock options, including, but not limited to,
provisions
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pertaining to (i) rights and obligations with respect to withholding taxes, (ii)
the registration, qualification or listing of the Shares, (iii) capital or other
changes of the Company, and (iv) other requirements of applicable law. The
Committee shall have the authority to interpret and construe the Option, and its
decisions shall be conclusive as to any questions arising hereunder.
5. No Employment Rights. The grant of the Option shall not confer upon
the Grantee any right to be retained by or in the employ or service of the
Company and shall not interfere in any way with the right of the Company to
terminate the Grantee's employment or service at any time. The right of the
Company to terminate at will the Grantee's employment or service at any time for
any reason is specifically reserved. No policies, procedures or statements of
any nature by or on behalf of the Company (whether written or oral, and whether
or not contained in any formal employee manual or handbook) shall be construed
to modify this Grant Agreement or to create express or implied obligations to
the Grantee of any nature.
6. No Stockholder Rights. Neither the Grantee, nor any person entitled
to exercise the Grantee's rights in the event of the Grantee's death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option until certificates for Shares have been issued upon the
exercise of the Option.
7. No Disclosure. The Grantee acknowledges that the Company has no duty
to disclose to the Grantee any material information regarding the business of
the Company or affecting the value of the Shares before or at the time of a
termination of the Grantee's employment or service, including without limitation
any plans regarding a public offering or merger involving the Company.
8. Assignment and Transfers. The rights and interests of the Grantee
under this Stock Option Grant Agreement may not be sold, assigned, encumbered or
otherwise transferred except, in the event of the death of the Grantee, by will
or by the laws of descent and distribution. In the event of any attempt by the
Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the
Option or any right hereunder, except as provided for in this Stock Option Grant
Agreement, or in the event of the levy or any attachment, execution or similar
process upon the rights or interests hereby conferred, the Company may terminate
the Option by notice to the Grantee, and the Option and all rights hereunder
shall thereupon become null and void. The rights and protections of the Company
hereunder shall extend to any successors or assigns of the Company and to the
Company's parents, subsidiaries, and affiliates. This Stock Option Grant
Agreement may be assigned by the Company without the Grantee's consent.
9. Applicable Law. The validity, construction, interpretation and
effect of this instrument shall be governed by and determined in accordance with
the laws of the State of Delaware.
10. Notice. Any notice to the Company provided for in this instrument
shall be addressed to the Company in care of the Chief Financial Officer at the
Company's headquarters and any notice to the Grantee shall be addressed to such
Grantee at the current address shown on the payroll of the Company, or to such
other address as the Grantee may designate to the Company in writing. Any notice
shall be delivered by hand, sent by telecopy or enclosed in a properly sealed
envelope addressed as stated above, registered and deposited, postage prepaid,
in a post office regularly maintained by the United States Postal Service.
In witness whereof, this Stock Option Grant Agreement has been executed
by the Company by a duly authorized officer as of the date specified herein.
CompuCom Systems, Inc. Accepted:
By: /s/ Xxxxxx X. Xxxxxxxx By:/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx, Optionee
President and Chief Executive Officer
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