EXHIBIT 10.6
BANYAN SYSTEMS INCORPORATED
NON-QUALIFIED STOCK OPTION AGREEMENT
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1. Grant of Option. Banyan Systems Incorporated, a Massachusetts
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corporation (the "Company"), hereby grants to Xxxxxx Xxxxx (the "Optionee") an
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option, pursuant to the terms (which such terms to the extent not inconsistent
with the terms hereof, are incorporated herein) of, but not under, Company's
1992 Stock Incentive Plan (the "Plan"), to purchase an aggregate of 120,000
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shares of Common Stock ("Common Stock") of the Company at a price of $2.688 per
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share, purchasable as set forth in and subject to the terms and conditions of
this option and the Plan. The date of grant of this option is March 20, 1997.
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Except where the context otherwise requires, the term "Company" shall include
the parent and all present and future subsidiaries of the Company as defined in
Sections 424 (e) and 424 (f) of the Internal Revenue Code of 1986, as amended or
replaced from time to time (The "Code").
2. Non-Statutory Stock Option. This option is not intended to qualify as
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an incentive stock option within the meaning of Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
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a. Vesting Schedule. Except as otherwise provided in this Agreement,
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this option may be exercised prior to the tenth anniversary of the date of grant
(hereinafter the "Expiration Date"), in installments as to not more than the
number of shares set forth in the table below during the respective installment
periods set forth in the table below.
Number of Shares as to
Exercise Period which Option is Exercisable
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From Date of Grant 20,000
but prior to the Expiration Date.
From and after 12 months
after the date of grant but 37,500
prior to the Expiration Date
From and after 24 months
after the date of grant but 37,500
prior to the Expiration Date
From and after 36 months
after the date of grant but 12,500
prior to the Expiration Date
From and after 48 months
after the date of grant but 12,500
prior to the Expiration Date.
b. Change in Control. Upon the occurrence of a Change in Control, as
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defined in the Employment Agreement dated March 19, 1997 herewith between the
Company and the Employee (the "Employment Agreement"), 50% of the unvested non-
qualified stock options will become fully vested and immediately available for
exercise in accordance with the applicable terms and conditions of Banyan's 1992
Stock Incentive Plan.
c. Termination by the Company. If the Optionee is terminated by the
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Company for any reason, except For Cause, there will be an accelerated vesting
of those unvested non-qualified stock options which would have become fully
vested within the nine month period following the effective date of termination,
which would be available for exercise in accordance with the applicable terms
and conditions of Banyan's Stock Incentive Plan. (Termination of employment For
Cause shall mean termination by reason of (a) any act involving dishonesty,
gross negligence or serious misconduct, or (b) your conviction of, or the entry
of a pleading of guilty or nolo contendere by you to, any crime involving moral
turpitude or any felony.)
The right of exercise shall be cumulative so that if the option is not exercised
to the maximum extent permissible during any exercise period, it shall be
exercisable, in whole or in part, with respect to all shares not so purchased at
any time prior to the Expiration Date or the earlier termination of this option.
This option may not be exercised at any time on or after the Expiration Date,
except as otherwise provided in Section 3 (e) below.
d. Exercise Procedure. Subject to the conditions set forth in this
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Agreement, this option shall be exercised by the Optionee's delivery of written
notice of exercise to the Treasurer of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanies by payment in full in accordance with Section 4. Such exercise
shall be effective upon receipt by the Treasurer of the Company of such written
notice together with the required payment. The Optionee may purchase less than
the number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.
e. Continuous Relationship with the Company Required. Except as
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otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or she exercises this option, is, and has been at
all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company (an "Eligible Optionee").
f. Termination of Relationship with the Company. If the Optionee
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ceases to be an Eligible Optionee for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Expiration Date),
provided that this option shall be exercisable only to the extent that the
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Optionee was entitled to exercise this option on the date of such cessation. If
the Optionee terminates due to an occurence of any "Change or Material Reduction
of Responsibilities" and upon 30 days prior written notice to Banyan vesting of
unvested non-qualified stock options will continue for nine months from the
effective date of termination. Notwithstanding the foregoing, if the Optionee,
prior to the Expiration Date, materially violates the non-competition or
confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Optionee and the Company,
the right to exercise this option shall terminate immediately upon written
notice to the Optionee from the Company describing such violation.
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g. Exercise Period Upon Death or Disability. If the Optionee dies or
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becomes disabled (within the meaning of Section 22 (e) (3) of the Code) prior to
the Expiration Date while he or she is an Eligible Employee, or if the Optionee
dies within three months after the Optionee ceases to be an Eligible Optionee
(other than as the result of a termination of such relationship by the Company
for "cause" as specified in paragraph (f) below, this option shall be
exercisable, within the period of one year following the date of death or
disability of the Optionee (whether or not such exercise occurs before the
Expiration Date), by the Optionee or by the person to whom this option is
transferred by will or the laws of descent and distribution, provided that this
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option shall be exercisable only to the extent that this option was exercisable
by the Optionee on the date of his or her death or disability. Except as
otherwise indicated by the context, the term "Optionee", as used in this option,
shall be deemed to include the estate of the Optionee or any person who acquires
the right to exercise this option by bequest or inheritance or otherwise by
reason of the death of the Optionee.
h. Discharge for Cause. If the Optionee, prior to the Expiration Date,
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ceases his or her relationship with the Company because such relationship is
terminated by the Company for "cause" (as defined below), the right to exercise
this option shall terminate immediately upon such cessation. "Cause" shall mean
willful misconduct by the Optionee or willful failure to perform his or her
responsibilities in the best interests of the Company (including, without
limitation, breach by the Optionee of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Optionee and the Company), as determined by the Company, which
determination shall be conclusive.
4. Payment of Purchase Price.
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a. Method of Payment. Payment of the purchase price for shares
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purchase upon exercise of this option shall be made by delivery of cash or check
in an amount equal to the exercise price of such options or, with the prior
consent of the Company (which may be withheld in its sole discretion), by (A)
delivery of shares of Common Stock owned by the Optionee for at least six
months, valued at their fair market value, as determined pursuant to (b) below,
(B) delivery of a promissory note of the Optionee to the Company on terms
determined by the Board, (C) delivery of an irrevocable undertaking by a broker
to deliver promptly to the Company sufficient funds to pay the exercise price or
delivery of irrevocable instructions to a broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price, (D) payment of
such other lawful consideration as the Board may determine, or (E) any
combination of the foregoing.
b. Valuation of Shares or Other Non-Cash Consideration Tendered in
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Payment of Purchase Price. For the purchase hereof, the fair market value of
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any share of the Company's Common Stock or other non-cash consideration which
may be delivered to the Company in exercise of this option shall be determined
in good faith or in the manner determined by the Board of Directors of the
Company from time to time.
c. Delivery of Shares Tendered in Payment of Purchase Price. If the
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Optionee exercises this option by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of Common Stock
of the Company to be delivered shall be duly executed in blank by the Optionee
or shall be accompanies by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company. Fractional shares of
Common Stock
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of the Company will not be accepted in payment of the purchase price of shares
acquired upon exercise of this option.
d. Restrictions on Use of Option Stock. Notwithstanding the foregoing,
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no shares of Common Stock of the Company may be tendered in payment of the
purchase price of shares purchased upon exercise of this option is the shares to
be so tendered were acquired within six months before the date of such tender.
5. Delivery of Shares; Compliance with Securities Laws, etc.
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a. General. The Company will not be obligated to deliver any shares of
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Stock pursuant to the Plan or to remove restriction from shares previously
delivered under the Plan (i) until all conditions of the option have been
satisfied or removed, (ii) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with, (iii)
if the outstanding Stock is at the time listed on any stock exchange, until the
shares to be delivered have been listed or authorized to be listed on such
exchange upon official notice of notice of issuance, and (iv) until all other
legal matters in connection with the issuance and delivery of such shares have
been approved by the Company's counsel.
b. Listing, Qualification, etc. This option shall be subject to the
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requirements that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent of
approval of any governmental or regulatory body, or that the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification or disclosure, or to satisfy such other condition.
6. Non transferability of Option. This option is personal and no rights
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granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) nor shall any such rights be
subject to execution, attachment or similar process, except that this option may
be transferred (i) by will or the laws of descent and distribution or (ii)
pursuant to a qualified domestic relations order as defined in Section 414 (p)
of the Code. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this option or of such rights contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon this option
or such rights, this option and such rights shall, at the election of the
Company, become null and void.
7. No Special Employment or Similar Rights. Nothing contained in the Plan
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or this Option shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment or other
relationship of the Optionee with the Company for the period within which this
option may be exercised. The Company expressly reserves the right at any time
to dismiss the Optionee free from any liability or claim under the Plan, except
as otherwise expressly provided in this Agreement.
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8. Rights as a Shareholder. The Optionee shall have no rights as a
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shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
9. Adjustment Provisions. In the event that the Board, in its sole
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discretion, determines that any stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination or other similar transaction affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, then the Board shall equitably
adjust either or both (i) the number and kind of shares subject to this option,
and (iii) the award, exercise or conversion price with respect to the foregoing,
and if considered appropriate, the Board may make provision for a cash payment
with respect to this option, provided that the number of shares subject to this
option shall always be a whole number.
10. Mergers, Consolidation, Distributions, Liquidations, etc. Subject to
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the provisions of Section 3(b) above, in the event of a consolidation, merger or
other reorganization in which all of the outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity (as "Acquisition") or in the event of a liquidation of the
Company, the Board of Directors of the Company, of the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions as to this option: (i) provide
that this option shall be assumed, or a substantially equivalent option shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof) on such terms as the Board determines to be appropriate, (ii) upon
written notice to the Optionee, provide that if unexercised, this option will
terminate immediately prior to the consummation of such transaction unless
exercised by the Optionee within a specified period following the date of such
notice, (iii) in the event of an Acquisition under the terms of which holders of
the Common Stock of the Company will receive upon consummation thereof a cash
payment for each share surrendered in the Acquisition (the "Acquisition Price"),
make or provide for a cash payment to the Optionee equal to the difference
between (A) the Acquisition Price times the number of shares of Common Stock
subject to outstanding options (to the extent then exercisable at prices not in
excess of the Acquisition Price) and (B) the aggregate exercise price of all
such outstanding options in exchange for the termination of such options, and
(iv) provide that all or any outstanding options shall become exercisable or
realizable in full prior to the effective date of such Acquisition.
11. Withholding Taxes. The Company's obligation to deliver shares upon the
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exercise of this option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements. The Optionee shall pay to the Company, or make provision
satisfactory to the Board for payment of, any taxes required by law to be
withheld in respect of options under the Plan no later than the date of the
event creating the tax liability. In the Board's discretion, and subject to
such conditions as the Board may establish, such tax obligations may be paid in
whole or in part in shares of Common Stock, including shares retained from the
option creating the tax obligation, valued at their fair market value. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to the Optionee.
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12. Miscellaneous.
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(a) The Board may amend, modify or terminate any outstanding option,
including substituting therefor another option of the same or a different type,
changing the date of exercise or realization, provided that the Optionee's
consent to such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and
adversely affect the Optionee. The Board may at any time accelerate the time at
which all or any part of an Option may be exercised.
(b) All notices under this option shall be mailed or delivered by hand to
the parties at their respective addresses set forth beneath their names below or
at such other address as may be designated in writing by either of the parties
to one another.
(c) This option shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
BANYAN SYSTEMS INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Title: Vice President Finance and Treasurer
Address: 000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
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OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the Company's 1992 Stock Incentive Plan.
OPTIONEE
/s/ Xxxxxx X. Xxxxx
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Address: _________________________
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