EXHIBIT 10.18
WORKFLOW MANAGEMENT, INC.
1998 STOCK INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
This Agreement is dated as of June 10, 1998, by and between Workflow
Management, Inc., a Delaware corporation (the "Company"), and Xxxxxx X.
X'Xxxxxxxx, Xx. (the "Participant").
1. Grant of Award. The Company hereby confirms the grant to the
Participant effective at 12:01 a.m. on June 10, 1998 (the "Grant Date"), of an
incentive stock option ("ISO") to purchase up to 7,000 shares and a
non-qualified stock option ("NQSO") to purchase up to 1,089,895 shares
(collectively the "Option" or the "Option Shares") of the Company's common
stock, $.001 par value (the "Common Stock") pursuant to the Company's 1998 Stock
Incentive Plan (the "Plan"). The specific terms and conditions of the Option
granted pursuant to this Agreement are set forth in the Plan; provided, however,
that (i) the Option, to the extent then unexercised, will be forfeited if, as
finally determined by a court, the Participant violates the sections titled
"Restriction on Competition," "Confidential Information," or "Inventions"
(collectively the "No Competition Clause") of the Participant's proposed
Employment Agreement to be entered into between the Company and the Participant
("Employment Agreement") on the terms approved by the Company's Board of
Directors on June 5, 1998; and (ii) the Option shall become fully vested and
immediately exercisable in the event of the Participant's death prior to the
Option Termination Date (as defined in Section 3 below) ("Death Clause"). If a
court finds that the Participant violated the No Competition Clause, the
Participant agrees that (i) any unexercised Option Shares shall be retroactively
forfeited as of the date of the violation, and (ii) to the extent the Option has
been exercised with respect to any Option Shares after the violation, the
Participant will promptly pay to the Company any "Option Gain," net of any taxes
actually paid on the Option or Option Shares. For purposes of this Agreement,
the Option Gain per share received upon exercise of all or any portion of the
Option Shares on or after the violation of the No Competition Clause is (i) for
shares of Common Stock sold by the Participant that were acquired upon exercise
of the Option, the greater of (a) the spread between the closing sale price on
NASDAQ of the Company's Common Stock on the date of exercise and the exercise
price paid ("Exercise Spread") and (b) the spread between the price at which the
Participant sold such shares of Common Stock and the exercise price paid, and
(ii) for any shares of Common Stock acquired upon exercise of the Option and
retained by the Participant, the greater of (a) the Exercise Spread and (b) the
spread between the closing sale price of the Common Stock on NASDAQ on the date
of the court's final determination of a violation of the No Competition Clause,
and the exercise price paid.
2. Option Price Per Share. The exercise price of each of the Option
Shares shall be $9.00 per share, which is the per share Fair Market Value (as
that term is defined in the Plan) of a share of the Company's Common Stock on
June 10, 1998.
3. Vesting and Term of the Option. Subject to (i) the No Competition
Clause and (ii) the Death Clause, the Participant shall be vested in the Option
on and after the Grant Date, but the Option may not be exercised until June 10,
1999. The Option (to the extent not earlier exercised) will expire at 11:59 p.m.
on June 8, 2008 (the "Option Termination Date"), unless sooner terminated
pursuant to the provisions of the Plan.
4. Exercise of Option. Subject to (i) the No Competition Clause and
(ii) the one-year restriction on exercise set forth in Section 3 above (as
qualified by the Death Clause), the Participant may exercise the Option with
respect to all or any part of the number of Option Shares by delivering to the
Treasurer of the Company (i) a written notice in the form of Attachment A to
this Agreement that sets forth the number of Option Shares that the Participant
desires to purchase, and (ii) an amount equal to the full payment of the
exercise price for those shares. The exercise of the Option in whole or in part
is conditioned upon the acceptance by the Participant of the terms of this
Agreement.
5. No Rights as Shareholders Until Option Exercised. Neither the
Participant nor his heirs, legal representative or guardians shall be, or shall
have any of the rights and privileges of a shareholder of the Company with
respect to any Option Shares, in whole or in part, before the date that the
Participant exercises the Option and the certificates for the shares are mailed
to the Participant.
6. Non-Transferability of Option. Pursuant to Section 20 of the Plan,
the Option shall not be assignable or transferable by the Participant other than
by will or by the laws of descent and distribution. Pursuant to Section 14 of
the Plan, during the life of the Participant, the Option shall be exercisable
only by the Participant or by such Participant's guardian or legal
representative.
7. Employment Not Affected. Nothing in the Plan or this Award Agreement
shall confer upon the Participant the right to continue in the employment of the
Company or affect any right which the Company may have to terminate the
employment of the Participant.
8. Notice. Any notice that must be given to the Company pursuant to
this Agreement shall be addressed to:
Treasurer
Workflow Management, Inc.
000 Xxxxx Xxxx Xxx
Xxxx Xxxxx, XX 00000
Any notice to the Participant shall be addressed to the
Participant at the current address shown on the payroll records of the Company.
Any notice shall be deemed to be duly given if and when properly addressed and
posted by registered or certified mail, postage prepaid.
9. Incorporation of Plan by Reference. The Option is granted pursuant
to the terms of the Plan, the terms of which are incorporated herein by
reference, and the Option shall in all respects be interpreted in accordance
with the Plan; provided, however, that to the extent that this Agreement and the
Plan are inconsistent, the terms of this Agreement shall govern. The
Compensation Committee of the Company's Board of Directors shall interpret and
construe the Plan and this document, and its interpretations and determinations
shall be conclusive and binding on the Participant and the Company and any other
person claiming an interest in the Option, with respect to any issue concerning
the Option. The Participant hereby acknowledges receipt of the enclosed copy of
the Plan and agrees to be bound by all the terms and conditions thereof as the
same may from time to time be amended, and by all determinations of the
Compensation Committee thereunder.
10. Governing Law. To the extent that federal laws do not otherwise
control, this Award Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed in duplicate on
behalf of the Company by its duly authorized officer, and by the Participant in
acceptance of the above-mentioned Option, subject to the terms and conditions of
the Plan, and of this Agreement.
WORKFLOW MANAGEMENT, INC.
Date: June 10, 1998 By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Title: Vice President and CFO
PARTICIPANT
Date: June 10, 1998 /s/ Xxxxxx X. X'Xxxxxxxx
---------------------------------
ATTACHMENT A
WORKFLOW MANAGEMENT, INC.
1998 STOCK INCENTIVE PLAN
NOTICE OF EXERCISE OF OPTION
Pursuant to the terms of the Stock Option Award Agreement for the
Workflow Management, Inc. 1998 Stock Incentive Plan, dated June 10, 1998, I
hereby exercise my Option to purchase the number of shares of the voting common
stock of Workflow Management, Inc. that is listed below at $____________ per
share.
Enclosed are the following items:
1. A copy of the Stock Option Award Agreement that I have signed and
dated.
2. This Notice that I have completed.
3. A check, bank draft or money order payable to "Workflow
Management, Inc." for the purchase price listed below.
I understand that my Option shall be deemed to be exercised on the date
that all of the items listed above are received by:
Treasurer
Workflow Management, Inc.
000 Xxxxx Xxxx Xxx
Xxxx Xxxxx, XX 00000
I understand that as soon as practicable after the Treasurer receives
the items listed above, the certificates for the shares purchased shall be
delivered to me by registered or certified mail to the address set forth below.
* * * * * *
A. I hereby exercise my Incentive Stock Option to purchase
__________ shares at $___________ per share, for a purchase price of
$____________________________________________________________
(Number of Shares Multiplied by $ )
B. I hereby exercise my Non-Qualified Stock Option to purchase
___________ shares at $___________ per share, for a purchase price of
$_____________________________________________________________
(Number of Shares Multiplied by $ )
Date:______________________________________ ____________________________
[Print Name of Employee]
___________________________________________ ____________________________
Employee's Signature Address [please print clearly]
Date received by Treasurer:________________________________________
