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As filed with the Securities and Exchange Commission on June 7, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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eSOFT, INC.
(Exact name of registrant as specified in its charter)
--------------------------------------------
DELAWARE 84-0938960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
295 INTERLOCKEN BLVD. # 500
BROOMFIELD, COLORADO 80021
(303) 444-1600
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
APEXX TECHNOLOGY INCORPORATED:
RESTRICTED STOCK OPTION PLAN
FOUNDERS NON-QUALIFIED STOCK OPTION AGREEMENT
1998 STOCK PLAN
1994 STOCK PLAN
(Full title of plan)
---------------------------
JEFFREY FINN WITH A COPY TO:
CHIEF EXECUTIVE OFFICER LESTER R. WOODWARD, ESQ.
295 INTERLOCKEN BLVD. # 500 DAVIS, GRAHAM & STUBBS LLP
BROOMFIELD, COLORADO 80021 370 17TH STREET, SUITE 4700
(303) 444-1600 DENVER, COLORADO 80202
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of each class of PROPOSED MAXIMUM PROPOSED MAXIMUM
securities to be registered OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
AMOUNT TO BE REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
- ------------------------------ --------------------- ------------------ ----------------------- ------------------
<S> <C> <C> <C> <C>
COMMON STOCK ($.01 PAR VALUE) 1,356,003 $3.75 $5,085,011 $1,414
============================== ===================== ================== ======================= ==================
</TABLE>
(1) ESTIMATED SOLELY FOR THE PURPOSES OF CALCULATING THE AMOUNT OF THE
REGISTRATION FEE PURSUANT TO RULE 457(C). THE PRICE PER SHARE AND AGGREGATE
OFFERING PRICE ARE BASED UPON THE AVERAGE OF THE HIGH AND LOW SALE PRICES OF
THE COMPANY'S COMMON STOCK ON JUNE 4, 1999 AS REPORTED ON THE NASDAQ SMALL CAP
MARKET.
<PAGE> 2
EXPLANATORY NOTE
On May 25, 1999 eSoft, Inc.(the "Company") concluded a strategic
combination with Apexx Technology, Inc. ("Apexx") that resulted in Apexx
becoming a wholly-owned subsidiary of the Company. Pursuant to the terms of the
acquisition, the Company assumed the four plans under which options to purchase
shares of Apexx common stock were granted, and agreed to convert the right to
purchase Apexx shares to a right to purchase shares of the Company. This
registration statement covers shares of the Company's common stock issuable upon
exercise of such Apexx options.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are filed with the Securities and Exchange
Commission, are incorporated in this Registration Statement by reference:
(a) The Company's Annual Report on Form 10-KSB for the year ended December
31, 1998, filed with the Commission on March 24, 1999.
(b) The Company's Amendment No. 1 to its Annual Report on Form 10-KSB for
the year ended December 31, 1998, filed with the Commission on April 21, 1999.
(c) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999, filed with the Commission on May 17, 1999.
(d) All other documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the
date of this Registration Statement and prior to the filing of a Post-Effective
Amendment to this Registration Statement indicating that all securities offered
under the Registration Statement have been sold, or deregistering all securities
then remaining unsold.
Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
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4. DESCRIPTION OF SECURITIES.
Not applicable.
5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws and Certificate of Incorporation provide that the
Company shall, to the full extent permitted by the General Corporation Law of
the State of Delaware, as amended from time to time, indemnify all directors and
officers of the Company. Section 145 of the Delaware General Corporation Law
provides in part that a corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than an action by or in
the right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Similar indemnity is authorized for such persons against expenses (including
attorneys' fees) actually and reasonably incurred in defense or settlement of
any threatened, pending or completed action or suit by or in the right of the
corporation, if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and
provided further that (unless a court of competent jurisdiction otherwise
provides) such person shall not have been adjudged liable to the corporation.
Any such indemnification may be made only as authorized in each specific case
upon a determination by the stockholders or disinterested directors that
indemnification is proper because the indemnitee has met the applicable standard
of conduct.
Additionally, the Certificate of Incorporation eliminates in certain
circumstances the monetary liability of directors of the Company for a breach of
their fiduciary duty as directors. This provision does not eliminate the
liability of a director (i) for a breach of the director's duty of loyalty to
the Company or its stockholders; (ii) for acts or omissions by the director not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law); or
(iv) for any transaction from which the director derived an improper personal
benefit.
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7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
8. EXHIBITS
3.1 Certificate of Incorporation of the Company.1/
3.2 Amendment to Certificate of Incorporation.2/
3.3 Amended and Restated Bylaws of the Company.
3.4 Form of Common Stock Certificate of the Company.3/
4.1 Apexx Technology Incorporated Restricted Stock Option Plan
4.2 Apexx Technology Incorporated Founders Non-Qualified Stock Option Plan
4.3 Apexx Technology Incorporated 1998 Stock Plan
4.4 Apexx Technology Incorporated 1994 Stock Plan
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP.
23.1 Consent of Davis, Graham & Stubbs LLP (included in Exhibit 5.1).
23.2 Consent of BDO Seidman LLP
25.1 Power of Attorney (included in signature page).
9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with
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1/ Filed previously with Amendment No. 1 to the Registration
Statement on Form 10-SB on February 18, 1998 and incorporated
herein by reference.
2/ Filed previously with the Registration Statement on Form S-4
on March 19, 1999 and incorporated herein by reference.
3/ Filed previously as an Exhibit to the Company's Registration
Statement on Form 10-SB, as filed with the Commission on
December 22, 1997, and incorporated herein by reference.
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respect to the plan of distribution not previously disclosed in the Registration
Statement, or any material change to such information in the Registration
Statement;
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S- 8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boulder, State of Colorado, on the 7th day of June,
1999.
eSOFT, INC.
By: /s/ JEFFREY FINN
------------------------------
Jeffrey Finn
Director and Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Philip L. Becker, Lester R. Woodward and
Jeffrey Finn, and each or any of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments and any registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agents, or any of them, or their
or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
Signature Title Date
/s/ JEFFREY FINN
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Jeffrey Finn President, Chief Executive June 7, 1999
Officer and Director
(Principal Executive
Officer)
/s/ PHILIP L. BECKER
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Philip L. Becker Director, Chief Technology June 7, 1999
Officer and Chairman of
the Board
/s/ THOMAS LOUTZENHEISER
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Thomas Loutzenheiser Director, Vice President of June 7, 1999
Product Development
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Richard Eyestone Director June 7, 1999
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/s/ RICHARD B. RICE
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Richard B. Rice Director June 7, 1999
/s/ AMY BETH HANSMAN
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Amy Beth Hansman Principal Accounting and June 7, 1999
Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
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<S> <C>
3.1 Certificate of Incorporation of the Company.4/
3.2 Amendment to Certificate of Incorporation.5/
3.3 Amended and Restated Bylaws of the Company.
3.4 Form of Common Stock Certificate of the Company.6/
4.1 Apexx Technology Incorporated Restricted Stock Option Plan
4.2 Apexx Technology Incorporated Founders Non-Qualified Stock Option Plan
4.3 Apexx Technology Incorporated 1998 Stock Plan
4.4 Apexx Technology Incorporated 1994 Stock Plan
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP.
23.1 Consent of Davis, Graham & Stubbs LLP (included in Exhibit 5.1).
23.2 Consent of BDO Seidman LLP
25.1 Power of Attorney (included in signature page).
</TABLE>
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4/ Filed previously with Amendment No. 1 to the Registration
Statement on Form 10-SB on February 18, 1998 and incorporated
herein by reference.
5/ Filed previously with the Registration Statement on Form S-4
on March 19, 1999 and incorporated herein by reference.
6/ Filed previously as an Exhibit to the Company's Registration
Statement on Form 10-SB, as filed with the Commission on
December 22, 1997, and incorporated herein by reference.
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EXHIBIT 3.3
eSOFT, INC.
BYLAWS
Article I
OFFICES
The registered office of eSoft, Inc. (the "Corporation") in
the State of Delaware shall be in the City of Wilmington, County of New Castle,
State of Delaware. The Corporation shall have offices at such other places as
the board of directors may from time to time determine.
Article II
STOCKHOLDERS
Section 1. Annual Meetings.
The annual meeting of stockholders for the election of
directors and for the transaction of such other business as may properly come
before the meeting shall be held on the date and at the time fixed, from time to
time, by the board of directors. Each such annual meeting shall be held at such
place, within or without the State of Delaware, as shall be determined by the
board of directors. The day, place and hour of each annual meeting shall be
specified in the notice of such annual meeting. Any annual meeting of
stockholders may be adjourned from time to time and place to place until its
business is completed.
Section 2. Special Meetings.
Except as otherwise required by law or by the certificate of
incorporation, special meetings of stockholders may be called by the chairman of
the board, the president, a vice president or the board of directors, and shall
be called by the president or secretary at the written request of stockholders
owning a majority in amount of the entire capital stock of the Corporation
issued and outstanding and entitled to vote.
Section 3. Stockholder Action.
Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of such stockholders and may be effected without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by all of the stockholders entitled to
vote.
Section 4. Notice of Meeting.
Written notice stating the place, date and hour of the meeting
and, in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be given not less than ten nor
<PAGE> 2
more than sixty days before the date of the meeting, except as otherwise
required by statute or the certificate of incorporation, either personally or by
mail, prepaid telegram, telex, facsimile transmission, cablegram, or radiogram,
to each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his address as it appears on
the stock records of the Corporation. If given personally or otherwise than by
mail, such notice shall be deemed to be given when either handed to the
stockholder or delivered to the stockholder's address as it appears on the stock
records of the Corporation.
Section 5. Waiver.
Attendance of a stockholder of the Corporation, either in
person or by proxy, at any meeting, whether annual or special, shall constitute
a waiver of notice of such meeting, except where a stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. A written waiver of notice of any such meeting signed by a stockholder
or stockholders entitled to such notice, whether before, at or after the time
for notice or the time of the meeting, shall be equivalent to notice. Neither
the business to be transacted at, nor the purposes of, any meeting need be
specified in any written waiver of notice.
Section 6. Voting List.
The secretary shall prepare and make available, at least ten
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting or, if not so specified, at the place where the meeting is to be held.
The list shall be produced and kept at the place of the meeting during the whole
time thereof and may be inspected by any stockholder who is present.
Section 7. Quorum.
Except as otherwise required by law, the certificate of
incorporation or these bylaws, the holders of not less than one-half of the
shares entitled to vote at any meeting of the stockholders, present in person or
by proxy, shall constitute a quorum, and the act of the majority of such quorum
shall be deemed the act of the stockholders. If a quorum shall fail to attend
any meeting, the chairman of the meeting may adjourn the meeting from time to
time, without notice if the time and place are announced at the meeting, until a
quorum shall be present. At such adjourned meeting at which a quorum is present,
any business may be transacted which might have been transacted at the original
meeting. If the adjournment is for more than thirty days or if after the
adjournment a new
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record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
Section 8. Record Date.
In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting, or at any adjournment of a
meeting of stockholders; or entitled to receive payment of any dividend or other
distribution or allotment of any rights; or entitled to exercise any rights in
respect of any change, conversion or exchange of stock; or for the purpose of
any other lawful action; the board of directors may fix, in advance, a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the board of directors. The record date for
determining the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournments thereof shall not be more than sixty nor less
than ten days before the date of such meeting. The record date for any other
action shall not be more than sixty days prior to such action. If no record date
is fixed: (i) the record date for determining stockholders entitled to notice of
or to vote at any meeting shall be the close of business on the day on which
notice is given or, if notice is waived by all stockholders, at the close of
business on the day next preceding the day on which the meeting is held; and
(ii) the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the board of directors adopts the
resolution relating to such other purpose. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
Section 9. Voting and Proxies.
At every meeting of the stockholders, each stockholder shall
be entitled to one vote, in person or by proxy, for each share of the capital
stock having voting power held by such stockholder, but no proxy shall be voted
on after three years from its date unless the proxy provides for a longer
period. When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the statutes or of the certificate of
incorporation, a different vote is required, in which case such express
provision shall govern.
Section 10. Procedure.
The order of business and all other matters of procedure at
every meeting of the stockholders may be determined by the presiding officer.
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Article III
DIRECTORS
Section 1. Number.
Except as otherwise fixed pursuant to the provisions of the
certificate of incorporation, the number of directors shall be fixed from time
to time exclusively by resolutions adopted by the board of directors; provided,
however, that the number of directors shall at no time be less than one and
further provided that no decrease in the number of directors constituting the
board of directors shall shorten the term of any incumbent director.
Section 2. Election and Terms.
A director shall hold office until the annual meeting for the
year in which his term expires and until his successor shall be elected and
qualified, subject, however, to such director's prior death, resignation,
retirement, disqualification or removal from office.
Section 3. Newly Created Directorships and Vacancies.
Except as otherwise fixed pursuant to the provisions of the
certificate of incorporation, newly created directorships resulting from any
increase in the number of directors and any vacancies on the board of directors
resulting from death, resignation, disqualification, removal or other cause
shall be filled solely by the affirmative vote of a majority of the remaining
directors then in office or a sole remaining director. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the new directorship which was created or in which the vacancy
occurred and until such director's successor shall have been elected and
qualified.
Section 4. Regular Meetings.
The first meeting of each newly elected board of directors
elected at the annual meeting of stockholders shall be held immediately after
and at the same place as, the annual meeting of the stockholders, provided a
quorum is present, and no notice of such meeting shall be necessary in order to
legally constitute the meeting. Regular meetings of the board of directors shall
be held at such times and places as the board of directors may from time to time
determine.
Section 5. Special Meetings.
Special meetings of the board of directors may be called at
any time, at any place and for any purpose by the chairman of the board, the
president, or by any officer of the Corporation upon the request of a majority
of the directors.
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Section 6. Notice of Meetings.
Notice of regular meetings of the board of directors need not
be given.
Notice of every special meeting of the board of directors
shall be given to each director at his usual place of business or at such other
address as shall have been furnished by him for such purpose. Such notice shall
be properly and timely given if it is: (a) deposited in the United States mail
not later than the third calendar day preceding the date of the meeting or (b)
personally delivered, telegraphed, sent by facsimile transmission or
communicated by telephone at least twenty-four hours before the time of the
meeting. Such notice need not include a statement of the business to be
transacted at, or the purpose of, any such meeting.
Section 7. Waiver.
Attendance of a director at a meeting of the board of
directors shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. A written waiver of notice signed by a
director or directors entitled to such notice, whether before, at, or after the
time for notice or the time of the meeting, shall be equivalent to the giving of
such notice.
Section 8. Quorum.
Except as may be otherwise provided by law, in the certificate
of incorporation, or in these bylaws, the presence of a majority of the
directors shall be necessary and sufficient to constitute a quorum for the
transaction of business at any meeting of the board of directors, and the act of
a majority of the directors present at a meeting at which a quorum is present
shall be deemed the act of the board of directors. Less than a quorum may
adjourn any meeting of the board of directors from time to time without notice.
Section 9. Participation in Meetings by Telephone.
Members of the board of directors, or of any committee
thereof, may participate in a meeting of such board or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and such participation
shall constitute presence in person at such meeting.
Section 10. Powers.
The business, property and affairs of the Corporation shall be
managed by or under the direction of its board of directors, which shall have
and may exercise all the powers of the Corporation to do all such lawful acts
and things as are not by law, by the certificate of incorporation or by these
bylaws, directed or required to be exercised or done by the stockholders.
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Section 11. Action without a Meeting.
Unless otherwise restricted by the certificate of
incorporation or these bylaws, any action required or permitted to be taken at
any meeting of the board of directors or any committee thereof may be taken
without a meeting if written consent thereto is signed by all members of the
board of directors or of such committee, as the case may be, and such written
consent is filed with the minutes of proceedings of the board or committee. Any
such consent may be in counterparts and shall be effective on the date of the
last signature thereon unless otherwise provided therein.
Article IV
COMMITTEES
Section 1. Designation of Committees.
The board of directors may establish committees for the
performance of delegated or designated functions to the extent permitted by law,
each committee to consist of one or more directors of the Corporation. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
board of directors to act at the meeting in the place of such absent or
disqualified member.
Section 2. Committee Powers and Authority.
The board of directors may provide, by resolution or by
amendment to these bylaws, that a committee may exercise all the power and
authority of the board of directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; provided, however, that a committee
may not exercise the power or authority of the board of directors in reference
to amending the certificate of incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending these bylaws; and, unless the resolution expressly so
provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock.
Section 3. Committee Procedures.
To the extent the board of directors or the committee does not
establish other procedures for the committee, each committee shall be governed
by the procedures established in Article III, Section 4 (except as they relate
to an annual meeting of the board of directors) and
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Article III, Sections 5, 6, 7, 9, 10, and 11 of these bylaws, as if the
committee were the board of directors.
Article V
OFFICERS
Section 1. Number.
The officers of the Corporation shall be appointed or elected
by the board of directors. The officers shall be a chairman of the board, a
president and chief executive officer, such number of vice presidents as the
board of directors may from time to time determine, a secretary, and a
treasurer. Any person may hold two or more offices at the same time.
Section 2. Additional Officers.
The board of directors may appoint such other officers as it
shall deem appropriate.
Section 3. Term of Office, Resignation.
All officers, agents and employees of the Corporation shall
hold their respective offices or positions at the pleasure of the board of
directors and may be removed at any time by the board of directors with or
without cause. Any officer may resign at any time by giving written notice of
his resignation to the chief executive officer, the president or to the
secretary, and acceptance of such resignation shall not be necessary to make it
effective unless the notice so provides. Any vacancy occurring in any office
shall be filled by the board of directors.
Section 4. Duties.
The officers of the Corporation shall perform the duties and
exercise the powers as may be assigned to them from time to time by the board of
directors or the president and chief executive officer. In the absence of such
assignment, the officers shall have the duties and powers described in Sections
5 through 10 of this Article.
Section 5. Chairman of the Board.
The chairman of the board shall preside at all meetings of the
stockholders and directors at which he is present. In the event of a vacancy in
the office of president, or in the event of the absence, disability or inability
or refusal to act of the president, the chairman of the board shall perform the
duties and exercise the powers of the president, including the duties and powers
of the
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chief executive officer of the Corporation. The board of directors may delegate
such other authority and assign such additional duties to the chairman of the
board as it may from time to time determine.
Section 6. President and Chief Executive Officer.
The president shall be the chief executive officer of the
Corporation and, subject to the direction and control of the board of directors
shall manage the business of the Corporation. The president may execute
contracts, deeds and other instruments on behalf of the Corporation. In the
absence of the chairman of the board or in the event of his disability,
inability or refusal to act, the president shall perform the duties and exercise
the power of the chairman of the board. The president shall have full authority
on behalf of the Corporation to attend any meeting, give any waiver, cast any
vote, grant any discretionary or directed proxy to any person, and exercise any
other rights of ownership with respect to any shares of capital stock or other
securities held by the Corporation and issued by any other corporation or with
respect to any partnership, trust or similar interest held by the Corporation.
Section 7. Vice President.
Each vice president, if any, shall perform such functions as
may be prescribed by the board of directors, the chairman of the board, the
president or any executive vice president. Each vice president may execute
contracts, deeds and other instruments on behalf of the Corporation. In the
event of vacancies in the offices of chairman of the board and president, or in
the event of the absence, disability or inability or refusal to act of the
chairman of the board and the president, the vice president, or in the event
that there is more than one vice president, the vice presidents in order of
designation by the board of directors, shall perform the duties and exercise the
powers of the president.
Section 8. Secretary.
The secretary shall give, or cause to be given, notice of all
meetings of the stockholders and, upon the request of a person entitled to call
a special meeting of the board of directors, he shall give notice of any such
special meeting. He shall keep the minutes of all meetings of the stockholders,
the board of directors or any committee established by the board of directors.
The secretary shall be responsible for the maintenance of all records of the
Corporation and may attest documents on behalf of the Corporation. The secretary
shall perform such other duties as the board, the chairman of the board, the
president or any vice president may from time to time prescribe or delegate to
him.
Section 9. Treasurer.
The treasurer shall be responsible for the control of the
funds of the Corporation and the custody of all securities owned by the
Corporation. The treasurer shall perform such other duties
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as the board, the chairman of the board, the president or any vice president may
from time to time prescribe or delegate to him.
Section 10. Assistant Officers.
The board of directors or the president may appoint such
assistant officers, including assistant secretary and assistant treasurer as the
board of directors or the president deem appropriate, and each such person may
be authorized to perform the duties and exercise the powers of the officer to
which the person is a designated assistant, with such limitations therein as the
board of directors or the president, as applicable, shall designate, and shall
have such other powers as the board of directors or the president shall
prescribe in writing.
Section 11. Compensation.
Officers shall receive such compensation, if any, for their
services as may be authorized or ratified by the board of directors. Election or
appointment as an officer shall not of itself create a right to compensation for
services performed as such officer.
Article VI
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
Section 1. Directors and Officers.
Subject to the certificate of incorporation and the other
sections of this Article, the Corporation shall indemnify, to the fullest extent
permitted by, and in the manner permissible under, the laws of the State of
Delaware in effect on the date hereof and as amended from time to time, any
person who was or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, association or other enterprise, against expenses (including
attorneys' fees), judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding, including any action, suit or proceeding by or
in the right of the Corporation (a "Proceeding"). The Corporation shall advance
all reasonable expenses incurred by or on behalf of any such person in
connection with any Proceeding within ten days after the receipt by the
Corporation of a statement or statements from such person requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the expenses incurred by such person and, if such person is an officer
or director of the Corporation, shall include or be preceded or accompanied by
an undertaking by or on behalf of such person to repay any expenses advanced if
it shall ultimately be determined that such person is not entitled to be
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indemnified against such expenses. Costs, charges or expenses of investigating
or defending Proceedings for which indemnity shall be sought hereunder may be
incurred without the Corporation's consent provided that no settlement of any
such Proceeding may be made without the Corporation's consent, which consent
shall not be unreasonably withheld.
Section 2. Determination of Right to Indemnification.
a. Any indemnification requested by any person under Section 1
of this Article shall be made no later than forty-five days after receipt of the
written request of such person unless a determination is made within said
forty-five day period: (i) by a majority vote of directors who are not parties
to such Proceedings, or (ii) in the event a quorum of non-involved directors is
not obtainable, at the election of the Corporation, by independent legal counsel
in a written opinion, that such person is not entitled to indemnification
hereunder.
b. Notwithstanding a determination under Section 2(a) above
that any person is not entitled to indemnification with respect to a Proceeding,
such person shall have the right to apply to any court of competent jurisdiction
for the purpose of enforcing such person's right to indemnification pursuant to
these bylaws. Neither the failure of the Corporation (including its board of
directors or independent legal counsel) to have made a determination prior to
the commencement of such action that such person is entitled to indemnification
hereunder, nor an actual determination by the Corporation (including its board
of directors or independent legal counsel) that such person is not entitled to
indemnification hereunder, shall be a defense to the action or create any
presumption that such person is not entitled to indemnification hereunder.
c. The Corporation shall indemnify any person against all
expenses incurred in connection with any hearing or Proceeding under this
Section 2 if such person prevails on the merits or otherwise in such Proceeding.
Section 3. Subrogation.
In the event of payment under these bylaws, the indemnifying
party or parties shall be subrogated to the extent of such payment to all of the
rights of recovery of the indemnified person therefor and such indemnified
person shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the indemnifying party or parties to effectively bring suit
to enforce such rights.
Section 4. Presumptions and Effect of Certain Proceedings.
a. In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that such person is entitled to indemnification
under this Article, and the Corporation shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.
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b. The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in these Bylaws) of itself adversely affect the right of any person to
indemnification or create a presumption that such person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to any criminal
Proceeding, that such person had reasonable cause to believe that his conduct
was unlawful.
Section 5. Exception to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of these bylaws, no person
shall be entitled to indemnification or advancement of expenses under these
bylaws with respect to any Proceeding brought by such person, unless the
bringing of such Proceeding or making of such claim shall have been approved by
the board of directors.
Section 6. Contract.
The foregoing provisions of this Article shall be deemed to be
a contract between the Corporation and each director and officer who serves in
such capacity at any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any
Proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.
The foregoing rights of indemnification shall not be deemed
exclusive of any other rights to which any director or officer may be entitled
apart from the provisions of this Article.
Section 7. Surviving Corporation.
The board of directors may provide by resolution that
references to "the Corporation" in this Article shall include, in addition to
this Corporation, all constituent corporations absorbed in a merger with this
Corporation so that any person who was a director or officer of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director, employee or agent of another corporation,
partnership, joint venture, trust, association or other entity shall stand in
the same position under the provisions of this Article with respect to this
Corporation as he would if he had served this Corporation in the same capacity
or is or was so serving such other entity at the request of this Corporation, as
the case may be.
Section 8. Inurement.
The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such person.
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Section 9. Employees and Agents.
To the same extent as it may do for a director or officer, the
Corporation may indemnify and advance expenses to a person who is not and was
not a director or officer of the Corporation but who is or was an employee or
agent of the Corporation.
Article VII
CAPITAL STOCK
Section 1. Certificates.
Each stockholder of the Corporation shall be entitled to a
certificate or certificates signed by or in the name of the Corporation by the
chairman of the board, the president or a vice president, and by the secretary
or an assistant secretary, certifying the number of shares of stock of the
Corporation owned by such stockholder. Any or all the signatures on the
certificate may be a facsimile.
Section 2. Facsimile Signatures.
In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he, she or it was such officer, transfer agent or registrar at the date of
issue.
Section 3. Registered Stockholders.
The Corporation shall be entitled to treat the holder of
record of any share or shares of stock of the Corporation as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it has actual or other notice thereof, except as provided by law.
Section 4. Cancellation of Certificates.
All certificates surrendered to the Corporation shall be
cancelled and, except in the case of lost, stolen or destroyed certificates, no
new certificates shall be issued until the former certificate or certificates
for the same number of shares of the same class of stock have been surrendered
and cancelled.
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Section 5. Lost, Stolen or Destroyed Certificates.
The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed upon the making of an affidavit of that fact by the person claiming
the certificate or certificates to be lost, stolen or destroyed. In its
discretion, and as a condition precedent to the issuance of any such new
certificate or certificates, the board of directors may require that the owner
of such lost, stolen or destroyed certificate or certificates, or such person's
legal representative, give the Corporation and its transfer agent or agents,
registrar or registrars a bond in such form and amount as the board of directors
may direct as indemnity against any claim that may be made against
the Corporation and its transfer agent or agents, registrar or registrars on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
Section 6. Transfer of Shares.
Shares of stock shall be transferable on the books of the
Corporation by the holder thereof, in person or by duly authorized attorney,
upon the surrender of the certificate or certificates representing the shares to
be transferred, properly endorsed, with such proof or guarantee of the
authenticity of the signature as the Corporation or its agents may reasonably
require.
Section 7. Transfer Agents and Registrars.
The Corporation may have one or more transfer agents and one
or more registrars of its stock, whose respective duties the board of directors
may, from time to time, define. No certificate of stock shall be valid until
countersigned by a transfer agent, if the Corporation shall have a transfer
agent, or until registered by the registrar, if the Corporation shall have a
registrar. The duties of transfer agent and registrar may be combined.
Article VIII
SEAL
The board of directors may adopt and provide a seal which
shall be circular in form and shall bear the name of the Corporation and the
words "Seal" and "Delaware," and which, when adopted shall constitute the
corporate seal of the Corporation.
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Article IX
FISCAL YEAR
The fiscal year for the Corporation shall be established by
resolution of the board of directors.
Article X
AMENDMENTS
Subject to the provisions of the certificate of incorporation,
these bylaws may be altered, amended or repealed at any annual meeting of the
stockholders (or at any special meeting thereof duly called for that purpose) by
a majority vote of the shares represented and entitled to vote at such meeting,
provided that in the notice of such special meeting, notice of such purpose
shall be given. Subject to the laws of the State of Delaware, the certificate of
incorporation and these bylaws, the board of directors may, by majority vote of
those present at any meeting at which a quorum is present, amend these bylaws or
enact such other bylaws as in their judgment may be advisable for the regulation
of the conduct of the affairs of the Corporation.
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EXHIBIT 4.1
RESTRICTED STOCK OPTION PLAN
APEXX TECHNOLOGY, INC.
1. Purpose. This Plan is intended to provide nonqualified stock options for
directors of APEXX TECHNOLOGY, INC., an Idaho corporation (hereinafter referred
to as "CORPORATION"), or any of its subsidiaries. The stock options granted
under this Plan shall be considered as compensation to the director receiving
the stock option and the value thereof shall be taxable as income to said
director at the time the stock option is exercised or is canceled by the
CORPORATION in accordance with this Agreement.
2. Term and Administration of Plan. This Plan shall become effective upon
approval by the Board of Directors and the Shareholders for the CORPORATION and
shall terminate as to the granting of new stock options on October 16, 2006,
unless sooner terminated by resolution of the Board of Directors. Upon
termination of this Plan, such termination shall not affect outstanding stock
options which have not yet been exercised. This Plan shall be administered and
implemented by the CORPORATION.
3. Stock Subject to Plan. There is hereby established a Restricted Stock
Option Plan Reserve to which shall be allocated One Hundred Thousand (100,000)
shares of no par value common stock of the CORPORATION. If the shares of stock
of the CORPORATION should, as a result of a stock split or stock dividend or
combination of shares of any other change, or exchange for other securities, by
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization or otherwise, be increased or decreased or changed into or
exchanged for a different number or kinds of shares of stock or other securities
of the CORPORATION or of another corporation, the number of shares of the then
remaining Reserve shall be appropriately adjusted to reflect such action.
<PAGE> 2
4. Eligibility for Stock Option. The CORPORATION may award stock options under
this Plan to directors of the CORPORATION by entering into a Stock Option
Agreement with said director specifically stating the number of shares of stock
which may be purchased under the Stock Option Agreement in accordance with the
terms of this Plan. A director must attend seventy-five percent (75%) of the
Board of Director meetings of the CORPORATION to be eligible to receive the
stock options.
5. Purchase Price. The purchase price of stock under any Stock Option granted
under this Plan shall be the current appraised price of the shares of stock as
of the date of the award of the Stock Option or such other price as determined
by the Board of Directors. The current appraised price shall be determined by an
independent appraiser annually, provided a public market does not exist for the
stock. If a market price does exist, the options granted will be at a price
equal to the closing price on the day the option is granted. The grant price of
the shares of stock shall be included in the Stock Option Agreement. The
purchase price shall be due and payable in cash by the director at the time of
the exercise of the stock option.
6. Time of Exercise of Option. Unless otherwise provided by the Board of
Directors, any option granted under this Plan may not be exercised before the
first anniversary date of the Stock Option Agreement; and thereafter the Stock
Option may be exercised in full or in part. Provided, any option granted under
this Plan shall terminate ten (10) years after the date of the Stock Option
Agreement unless exercised by the director by said date.
7. Restriction and Termination of Stock Options. Any stock option granted
under this Plan may be exercised only while the owner thereof is a director of
the CORPORATION, or any of its subsidiaries, and for ninety (90) days
thereafter. One (1) year following the termination of a
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<PAGE> 3
directorship, any unexercised stock options of the director shall immediately
and automatically terminate without payment of any consideration to the
director.
8. Nontransferability. Any option granted under this Plan shall be
nontransferable by the director and any attempt to transfer such option before
its exercise shall be null and void.
9. Other Terms. Any stock option granted under this Plan may contain such
other additional terms and conditions, which are deemed necessary or desirable
by the CORPORATION. 10. Amendment. This Plan may be amended at any time by the
Board of Directors.
APPROVED by the Board of Directors and effective on October 16.
DATED this 16th day of October, 1996.
APEXX TECHNOLOGY, INC.
By: /s/ TOM LOUTZENHEISER
---------------------------------
TOM LOUTZENHEISER, President
ATTEST:
/s/ GAYL LOUTZENHEISER
- --------------------------------
GAYL LOUTZENHEISER, Secretary
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EXHIBIT 4.2
FOUNDERS NON-QUALIFIED
STOCK OPTION AGREEMENT
This agreement is made this ___th day of ___________, 199__ in Boise, ID, by and
between Apexx Technology, Inc., an Idaho Corporation ("Apexx") and
_________________________, (the "Optionee").
Whereas, the Optionee has provided valuable services to Apexx, and Apexx
considers it desirable and in its best interest that the Optionee be given an
added incentive to advance the interests of Apexx.
Now, therefore, in consideration of the mutual promises herein contained,
the parties agree as follows:
1. Grant of Option. Apexx agrees to transfer to the Optionee an option
to purchase ____________ shares of the common stock of Apexx.
2. Nonassignability. The options granted hereunder shall not be
assigned or transferable.
3. Exercise. Each option may be exercised in whole or in part at any
time within ten (10) years from the date of issue by Apexx.
Optionee must exercise at least 1000 shares of this option at any
one time.
4. Adjustments. The number of shares subject to each option shall be
proportionately adjusted for any change in the stock structure of
Apexx because of share dividends, recapitalizations,
reorganizations, mergers, or other restructuring.
5. Purchase Price. The price at which shares may be purchased under
each option is _____ cents ($0.__) per share.
6. Death of Optionee. In the event of the death of the Optionee, his
personal representative may exercise such option at any time within
one (1) year after his death. Notwithstanding the foregoing, in no
event shall an option be exercised after ten (10) years of the date
of issue.
7. Benefit. This Stock Option Agreement and the covenants and
conditions herein contained shall inure to the benefit of and be
binding upon the parties hereto and their successors and permitted
assigns.
8. Applicable Law. This Stock Option Agreement has been executed by
the parties in Idaho, and shall be governed by and construed in
accordance with the laws thereof.
IN WITNESS WHEREOF, the parties have signed this Stock Option Agreement
as of the day first above written.
APEXX TECHNOLOGY, INC.
By
--------------------------------------
Thomas B. Loutzenheiser, President
By
--------------------------------------
Gayl Loutzenheiser, Secretary
OPTIONEE:
----------------------------------------
<PAGE> 1
EXHIBIT 4.3
APEXX TECHNOLOGY INCORPORATED
1998 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
- to attract and retain the best available personnel for
positions of substantial responsibility,
- to provide additional incentive to Employees, Directors and
Consultants, and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Apexx Technology Incorporated, a Idaho corporation.
(h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
<PAGE> 2
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including
without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system
for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal
or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are
not reported, the Fair Market Value of a Share of
Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last
market trading day prior to the day of determination,
as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be
determined in good faith by the Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
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<PAGE> 3
(p) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(q) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1998 Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.
(cc) "Service Provider" means an Employee, Director or Consultant.
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(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is one million (1,000,000) Shares. The Shares may be authorized,
but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to
different groups of Service Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options
granted hereunder as "performance-based compensation"
within the meaning of Section 162(m) of the Code, the
Plan shall be administered by a Committee of two or
more "outside directors" within the meaning of
Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3,
the transactions contemplated hereunder shall be
structured to satisfy the requirements for exemption
under Rule 16b-3.
(iv) Other Administration. Other than as provided above,
the Plan shall be administered by (A) the Board or
(B) a Committee, which committee shall be constituted
to satisfy Applicable Laws.
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(b) Powers of the Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to
be covered by each Option and Stock Purchase Right
granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any
Option or Stock Purchase Right granted hereunder.
Such terms and conditions include, but are not
limited to, the exercise price, the time or times
when Options or Stock Purchase Rights may be
exercised (which may be based on performance
criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase
Right or the shares of Common Stock relating thereto,
based in each case on such factors as the
Administrator, in its sole discretion, shall
determine;
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value
if the Fair Market Value of the Common Stock covered
by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase
Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of
qualifying for preferred tax treatment under foreign
tax laws;
(x) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(C) of the Plan),
including the discretionary authority to extend the
post-termination exercisability period of Options
longer than is otherwise provided for in the Plan;
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<PAGE> 6
(xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold
from the Shares to be issued upon exercise of an
Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount
required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be
determined. All elections by an Optionee to have
Shares withheld for this purpose shall be made in
such form and under such conditions as the
Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant
of an Option or Stock Purchase Right previously
granted by the Administrator;
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than
300,000 Shares.
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<PAGE> 7
(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase
up to an additional 300,000 Shares which shall not
count against the limit set forth in subsection (i)
above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the
Company's capitalization as described in Section 13.
(iv) If an Option is canceled in the same fiscal year of
the Company in which it was granted (other than in
connection with a transaction described in Section
13), the canceled Option will be counted against the
limits set forth in subsections (i) and (ii) above.
For this purpose, if the exercise price of an Option
is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new
Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon January 1, 1998. It shall continue in effect for a term of ten
(10) years unless terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(a) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns
stock representing more than ten percent
(10%) of the voting power of all classes of
stock of the Company or any Parent or
Subsidiary, the per Share exercise price
shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(b) granted to any Employee other than an
Employee described in paragraph (a)
immediately above, the per Share exercise
price shall be
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<PAGE> 8
no less than 100% of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the
Administrator. In the case of a Nonstatutory Stock
Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of
the Code, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of
the Fair Market Value per Share on the date of grant
pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (a) in the case of Shares acquired
upon exercise of an option, have been owned by the
Optionee for more than six months on the date of
surrender, and (b) have a Fair Market Value on the
date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be
exercised;
(v) consideration received by the Company under a
cashless exercise program implemented by the Company
in connection with the Plan;
(vi) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to
the Optionee's participation in any Company-sponsored
deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment;
or
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<PAGE> 9
(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by
Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as
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<PAGE> 10
is specified in the Option Agreement to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by
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<PAGE> 11
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at a rate determined by the Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the Company or the duly authorized transfer agent of the Company.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as
provided in Section 13 of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless determined
otherwise by the Administrator, an Option or Stock Purchase Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance 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 of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the
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<PAGE> 12
effective date of such proposed transaction. The Administrator in its discretion
may provide for an Optionee to have the right to exercise his or her Option
until ten (10) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option would not otherwise be
exercisable. In addition, the Administrator may provide that any Company
repurchase option applicable to any Shares purchased upon exercise of an Option
or Stock Purchase Right shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option or
Stock Purchase Right will terminate immediately prior to the consummation of
such proposed action.
(c) MERGER OR ASSET SALE. IN THE EVENT OF A MERGER OF THE COMPANY WITH
OR INTO ANOTHER CORPORATION, OR THE SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
THE COMPANY, EACH OUTSTANDING OPTION AND STOCK PURCHASE RIGHT SHALL FULLY VEST,
AND THE OPTIONEE SHALL HAVE THE RIGHT TO EXERCISE THE OPTION OR STOCK PURCHASE
RIGHT AS TO ALL OF THE OPTIONED STOCK, INCLUDING SHARES AS TO WHICH IT WOULD NOT
OTHERWISE BE VESTED OR EXERCISABLE. IF AN OPTION OR STOCK PURCHASE RIGHT BECOMES
FULLY VESTED AND EXERCISABLE IN THE EVENT OF A MERGER OR SALE OF ASSETS, THE
ADMINISTRATOR SHALL NOTIFY THE OPTIONEE IN WRITING OR ELECTRONICALLY THAT THE
OPTION OR STOCK PURCHASE RIGHT SHALL BE FULLY VESTED AND EXERCISABLE FOR A
PERIOD OF THIRTY (30) DAYS FROM THE DATE OF SUCH NOTICE, AND THE OPTION OR STOCK
PURCHASE RIGHT SHALL TERMINATE UPON THE EXPIRATION OF SUCH PERIOD.
14. Date of Grant. The date of grant of an Option or Stock Purchase Right shall
be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
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<PAGE> 13
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
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<PAGE> 14
APEXX TECHNOLOGY INCORPORATED 1998 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
XX. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Apexx 1998 Stock Plan and
this Option Agreement, as follows:
Grant Number
--------------------------------------------------------------------
Date of Grant
-------------------------------------------------------------------
Vesting Commencement Date
-------------------------------------------------------
Exercise Price per Share $
-----------------------------------------------
Total Number of Shares Granted
--------------------------------------------------
Total Exercise Price $
---------------------------------------------------
Type of Option: Incentive Stock Option
---
Nonstatutory Stock Option
---
Term/Expiration Date:
-----------------------------------------------------------
VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
The options shall vest over four (4) years. 25% of the Shares subject
to the Option shall vest twelve months after the Vesting Commencement Date, and
the next 25% of the total Shares subject to the Option shall vest each twelve
months thereafter, subject to the Optionee continuing to be a Service Provider
on such dates.
TERMINATION PERIOD:
This Option may be exercised for three months after Optionee ceases to
be a Service Provider. Upon the death or Disability of the Optionee, this Option
may be exercised for one year after Optionee ceases to be a Service Provider. In
no event shall this Option be exercised later than the Term/Expiration Date as
provided above.
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<PAGE> 15
XXI. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 15(C) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set
out in the Notice of Grant and the applicable
provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached
as Exhibit A (the "Exercise Notice"), which shall
state the election to exercise the Option, the number
of Shares in respect of which the Option is being
exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by
the Company pursuant to the provisions of the Plan.
The Exercise Notice shall be completed by the
Optionee and delivered to Attn: President, Apexx
Technology, Inc. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall
be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
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<PAGE> 16
(b) check; or
(c) consideration received by the Company under a
cashless exercise program implemented by the Company
in connection with the Plan; or
(d) surrender of other Shares which (i) in the case of
Shares acquired upon exercise of an option, have been
owned by the Optionee for more than six (6) months on
the date of surrender, and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate
Exercise Price of the Exercised Shares; or
(e) with the Administrator's consent, delivery of
Optionee's promissory note (the "Note") in the form
attached hereto as Exhibit C, in the amount of the
aggregate Exercise Price of the Exercised Shares
together with the execution and delivery by the
Optionee of the Security Agreement attached hereto as
Exhibit B. The Note shall bear interest at the
"applicable federal rate" prescribed under the Code
and its regulations at time of purchase, and shall be
secured by a pledge of the Shares purchased by the
Note pursuant to the Security Agreement.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonstatutory Stock Option. The Optionee may
incur regular federal income tax liability
upon exercise of a NSO. The Optionee will be
treated as having received compensation
income (taxable at ordinary income tax
rates) equal to the excess, if any, of the
Fair Market Value
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<PAGE> 17
of the Exercised Shares on the date of
exercise over their aggregate Exercise
Price.
If the Optionee is an Employee or a former Employee,
the Company will be required to withhold from his or
her compensation or collect from Optionee and pay to
the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at
the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of
exercise.
(ii) Incentive Stock Option. If this Option
qualifies as an ISO, the Optionee will have
no regular federal income tax liability upon
its exercise, although the excess, if any,
of the Fair Market Value of the Exercised
Shares on the date of exercise over their
aggregate Exercise Price will be treated as
an adjustment to alternative minimum taxable
income for federal tax purposes and may
subject the Optionee to alternative minimum
tax in the year of exercise. In the event
that the Optionee ceases to be an Employee
but remains a Service Provider, any
Incentive Stock Option of the Optionee that
remains unexercised shall cease to qualify
as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory
Stock Option on the date three (3) months
and one (1) day following such change of
status.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at
least one year, any gain realized on
disposition of the Shares will be treated as
long-term capital gain for federal income
tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at
least one year after exercise and two years
after the grant date, any gain realized on
disposition of the Shares will be treated as
long-term capital gain for federal income
tax purposes. If the Optionee disposes of
ISO Shares within one year after exercise or
two years after the grant date, any gain
realized on such disposition will be treated
as compensation income (taxable at ordinary
income rates) to the extent of the excess,
if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares
acquired on the date of exercise and the
aggregate Exercise Price, or (B) the
difference between the sale price of such
Shares and the aggregate Exercise Price. Any
additional gain will be taxed as capital
gain, short-term or long-term depending on
the period that the ISO Shares were held.
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<PAGE> 18
(c) Notice of Disqualifying Disposition of ISO Shares. If
the Optionee sells or otherwise disposes of any of
the Shares acquired pursuant to an ISO on or before
the later of (i) two years after the grant date, or
(ii) one year after the exercise date, the Optionee
shall immediately notify the Company in writing of
such disposition. The Optionee agrees that he or she
may be subject to income tax withholding by the
Company on the compensation income recognized from
such early disposition of ISO Shares by payment in
cash or out of the current earnings paid to the
Optionee.
7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of Idaho.
8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: APEXX TECHNOLOGY INCORPORATED
- ---------------------------------- -------------------------------------
Signature By
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<PAGE> 19
- ---------------------------------- -------------------------------------
Print Name Title
Residence Address:
-----------------------------
-----------------------------
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
- -------------------------------------
Spouse of Optionee
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<PAGE> 20
EXHIBIT A APEXX TECHNOLOGY INC. 1998 STOCK PLAN
EXERCISE NOTICE
Apexx Technology Incorporated
506 S. 11th Street
Boise, Idaho 83702
Attention: President, Apexx Technology, Inc.
1. Exercise of Option. Effective as of today, ________________,199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Apexx Technology Incorporated (the
"Company") under and pursuant to the 1998 Stock Plan (the "Plan") and the Stock
Option Agreement dated _____________, 19___ (the "Option Agreement"). The
purchase price for the Shares shall be $_____________, as required by the Option
Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 13 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing
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<PAGE> 21
signed by the Company and Purchaser. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of Idaho.
Submitted by: Accepted by:
PURCHASER: APEXX TECHNOLOGY INCORPORATED
- -------------------------------------- ---------------------------------
Signature By
- -------------------------------------- ---------------------------------
Print Name Its
Address: Address:
Apexx Technology Incorporated
- -------------------------------------- 506 S. 11th Street
Boise, Idaho 83702
- --------------------------------------
- --------------------------------------
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<PAGE> 22
SECURITY AGREEMENT EXHIBIT B
This Security Agreement is made as of __________, 19___ between Apexx
Technology Incorporated, a Idaho corporation ("Pledgee"), and
_________________________ ("Pledgor").
RECITALS
Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated ________ (the "Option"), between Pledgor and Pledgee under
Pledgee's 1998 Stock Plan, and Pledgor's election under the terms of the Option
to pay for such shares with his promissory note (the "Note"), Pledgor has
purchased _________ shares of Pledgee's Common Stock (the "Shares") at a price
of $________ per share, for a total purchase price of $__________. The Note and
the obligations thereunder are as set forth in Exhibit C to the Option.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of
the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the Idaho Commercial Code, hereby pledges all of such Shares (herein
sometimes referred to as the "Collateral") represented by certificate number
______, duly endorsed in blank or with executed stock powers, and herewith
delivers said certificate to the Secretary of Pledgee ("Pledgeholder"), who
shall hold said certificate subject to the terms and conditions of this Security
Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the
principal sum of the Note secured hereby, together
with interest thereon, at the time and in the manner
provided in the Note.
(b) Encumbrances. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will
not further encumber the Shares without the prior
written consent of Pledgee.
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<PAGE> 23
(c) Margin Regulations. In the event that Pledgee's
Common Stock is now or later becomes margin-listed by
the Federal Reserve Board and Pledgee is classified
as a "lender" within the meaning of the regulations
under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G"), Pledgor agrees to
cooperate with Pledgee in making any amendments to
the Note or providing any additional collateral as
may be necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the pledge
any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
(a) Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
(b) Pledgor fails to perform any of the covenants set
forth in the Option or contained in this Security
Agreement for a period of 10 days after written
notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the Idaho
Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder
-23-
<PAGE> 24
hereunder upon payments of the principal of the Note. The number of the pledged
Shares which shall be released shall be that number of full Shares which bears
the same proportion to the initial number of Shares pledged hereunder as the
payment of principal bears to the initial full principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the payment
of all indebtedness secured hereby, at which time the remaining pledged stock
shall be promptly delivered to Pledgor, subject to the provisions for prior
release of a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the internal substantive laws, but not the choice of law rules,
of Idaho.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PLEDGOR"
- -------------------------------
Signature
- -------------------------------
-24-
<PAGE> 25
Print Name
Address:
------------------------------
"PLEDGEE" Apexx Technology Incorporated, an Idaho corporation
- --------------------------------------
Signature
- --------------------------------------
Print Name Title
"PLEDGEHOLDER"
------------------------------------------
Secretary of Apexx Technology Incorporated
-25-
<PAGE> 26
EXHIBIT C
NOTE
$ Boise, Idaho
-----------------
, 19
- ----------- ---
FOR VALUE RECEIVED, ___________________________________ promises to pay
to Apexx Technology Incorporated, a Idaho corporation (the "Company"), or order,
the principal sum of _________________________________ ($_____________),
together with interest on the unpaid principal hereof from the date hereof at
the rate of _______________ percent (____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on ___________________,
19___. Payment of principal and interest shall be made in lawful money of the
United States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option #_______, dated as of
___________________. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
- ----------------------------------
Signature
- ----------------------------------
Print Name
Address:
--------------------------
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<PAGE> 27
NOTICE OF GRANT OF STOCK PURCHASE RIGHT
APEXX TECHNOLOGY INC.
1998 STOCK PLAN
Unless otherwise defined herein, the terms defined in the Apexx 1998
Stock Plan shall have the same defined meanings in this Notice of Grant.
[Grantee's Name and Address]
You have been granted the right to purchase Common Stock of the
Company, subject to the Company's Repurchase Option and your ongoing status as a
Service Provider (as described in the Plan and the attached Restricted Stock
Purchase Agreement), as follows:
Grant Number:
--------------------
Date of Grant:
--------------------
Price Per Share: $
--------------------
Total Number of Shares Subject
to This Stock Purchase Right:
--------------------
Expiration Date:
--------------------
YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE
EXPIRATION DATE OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER
RIGHT TO PURCHASE THE SHARES.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Stock Purchase Right is granted under
and governed by the terms and conditions of the 1998 Stock Plan and the
Restricted Stock Purchase Agreement, attached hereto as Exhibit A-1, both of
which are made a part of this document. You further agree to execute the
attached Restricted Stock Purchase Agreement as a condition to purchasing any
shares under this Stock Purchase Right.
-27-
<PAGE> 28
GRANTEE: APEXX TECHNOLOGY INCORPORATED
- --------------------------------- -----------------------------------
Signature By
- --------------------------------- -----------------------------------
Print Name Title
Residence Address:
----------------------------------
----------------------------------
-28-
<PAGE> 29
EXHIBIT A-1
APEXX TECHNOLOGY INCORPORATED
1998 STOCK PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Purchase Agreement.
WHEREAS the Purchaser named in the Notice of Grant, (the "Purchaser")
is a Service Provider, and the Purchaser's continued participation is considered
by the Company to be important for the Company's continued growth; and
WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Administrator has granted to the Purchaser a
Stock Purchase Right subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to
this Restricted Stock Purchase Agreement (the "Agreement").
NOW THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser
and the Purchaser hereby agrees to purchase shares of the Company's Common Stock
(the "Shares"), at the per Share purchase price and as otherwise described in
the Notice of Grant.
2. Payment of Purchase Price. The purchase price for the Shares may be
paid by delivery to the Company at the time of execution of this Agreement of
cash, a check, or some combination thereof.
3. Repurchase Option.
(a) In the event the Purchaser ceases to be a Service
Provider for any or no reason (including death or
disability) before all of the Shares are released
from the Company's Repurchase Option (see Section 4),
the Company shall, upon the date of such termination
(as reasonably fixed and determined by the Company)
have an irrevocable, exclusive option (the
"Repurchase Option") for a period of sixty (60) days
from such date to repurchase up to that number of
shares which constitute the Unreleased Shares (as
defined in Section 4) at the original purchase price
per share (the "Repurchase Price"). The Repurchase
Option shall be exercised by the Company by
delivering written notice to the Purchaser or the
Purchaser's executor (with a copy to the Escrow
Holder) and, at the Company's option, (i) by
delivering to the Purchaser or the Purchaser's
executor a check in the amount of the aggregate
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<PAGE> 30
Repurchase Price, or (ii) by canceling an amount of
the Purchaser's indebtedness to the Company equal to
the aggregate Repurchase Price, or (iii) by a
combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals the
aggregate Repurchase Price. Upon delivery of such
notice and the payment of the aggregate Repurchase
Price, the Company shall become the legal and
beneficial owner of the Shares being repurchased and
all rights and interests therein or relating thereto,
and the Company shall have the right to retain and
transfer to its own name the number of Shares being
repurchased by the Company.
(b) Whenever the Company shall have the right to
repurchase Shares hereunder, the Company may
designate and assign one or more employees, officers,
directors or stockholders of the Company or other
persons or organizations to exercise all or a part of
the Company's purchase rights under this Agreement
and purchase all or a part of such Shares. If the
Fair Market Value of the Shares to be repurchased on
the date of such designation or assignment (the
"Repurchase FMV") exceeds the aggregate Repurchase
Price of such Shares, then each such designee or
assignee shall pay the Company cash equal to the
difference between the Repurchase FMV and the
aggregate Repurchase Price of such Shares.
4. Release of Shares From Repurchase Option.
(a) _______________________ percent (______%) of the
Shares shall be released from the Company's
Repurchase Option one year after the Date of Grant
and __________________ percent (______%) of the
Shares at the end of each month thereafter, provided
that the Purchaser does not cease to be a Service
Provider prior to the date of any such release.
(b) Any of the Shares that have not yet been released
from the Repurchase Option are referred to herein as
"Unreleased Shares."
(c) The Shares that have been released from the
Repurchase Option shall be delivered to the Purchaser
at the Purchaser's request (see Section 6).
5. Restriction on Transfer. Except for the escrow described in Section
6 or the transfer of the Shares to the Company or its assignees contemplated by
this Agreement, none of the Shares or any beneficial interest therein shall be
transferred, encumbered or otherwise disposed of in any way until such Shares
are released from the Company's Repurchase Option in accordance with the
provisions of this Agreement, other than by will or the laws of descent and
distribution.
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<PAGE> 31
6. Escrow of Shares.
(a) To ensure the availability for delivery of the
Purchaser's Unreleased Shares upon repurchase by the
Company pursuant to the Repurchase Option, the
Purchaser shall, upon execution of this Agreement,
deliver and deposit with an escrow holder designated
by the Company (the "Escrow Holder") the share
certificates representing the Unreleased Shares,
together with the stock assignment duly endorsed in
blank, attached hereto as Exhibit A-2. The Unreleased
Shares and stock assignment shall be held by the
Escrow Holder, pursuant to the Joint Escrow
Instructions of the Company and Purchaser attached
hereto as Exhibit A-3, until such time as the
Company's Repurchase Option expires. As a further
condition to the Company's obligations under this
Agreement, the Company may require the spouse of
Purchaser, if any, to execute and deliver to the
Company the Consent of Spouse attached hereto as
Exhibit A-4.
(b) The Escrow Holder shall not be liable for any act it
may do or omit to do with respect to holding the
Unreleased Shares in escrow while acting in good
faith and in the exercise of its judgment.
(c) If the Company or any assignee exercises the
Repurchase Option hereunder, the Escrow Holder, upon
receipt of written notice of such exercise from the
proposed transferee, shall take all steps necessary
to accomplish such transfer.
(d) When the Repurchase Option has been exercised or
expires unexercised or a portion of the Shares has
been released from the Repurchase Option, upon
request the Escrow Holder shall promptly cause a new
certificate to be issued for the released Shares and
shall deliver the certificate to the Company or the
Purchaser, as the case may be.
(e) Subject to the terms hereof, the Purchaser shall have
all the rights of a stockholder with respect to the
Shares while they are held in escrow, including
without limitation, the right to vote the Shares and
to receive any cash dividends declared thereon. If,
from time to time during the term of the Repurchase
Option, there is (i) any stock dividend, stock split
or other change in the Shares, or (ii) any merger or
sale of all or substantially all of the assets or
other acquisition of the Company, any and all new,
substituted or additional securities to which the
Purchaser is entitled by reason of the Purchaser's
ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and
included thereafter as "Shares" for purposes of this
Agreement and the Repurchase Option.
7. Legends. The share certificate evidencing the Shares, if any, issued
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable state securities laws):
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<PAGE> 32
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
8. Adjustment for Stock Split. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
9. Tax Consequences. The Purchaser has reviewed with the Purchaser's
own tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. The Purchaser understands that the Purchaser
(and not the Company) shall be responsible for the Purchaser's own tax liability
that may arise as a result of the transactions contemplated by this Agreement.
The Purchaser understands that Section 83 of the Internal Revenue Code of 1986,
as amended (the "Code"), taxes as ordinary income the difference between the
purchase price for the Shares and the Fair Market Value of the Shares as of the
date any restrictions on the Shares lapse. In this context, "restriction"
includes the right of the Company to buy back the Shares pursuant to the
Repurchase Option. The Purchaser understands that the Purchaser may elect to be
taxed at the time the Shares are purchased rather than when and as the
Repurchase Option expires by filing an election under Section 83(b) of the Code
with the IRS within 30 days from the date of purchase. The form for making this
election is attached as Exhibit A-5 hereto.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER Section
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE
THIS FILING ON THE PURCHASER'S BEHALF.
10. General Provisions.
(a) This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules of
Idaho. This Agreement, subject to the terms and
conditions of the Plan and the Notice of Grant,
represents the entire agreement between the parties
with respect to the purchase of the Shares by the
Purchaser. Subject to Section 15(C)of the Plan, in
the event of a conflict between the terms and
conditions of the Plan and the terms and conditions
of this Agreement, the terms and conditions of the
Plan shall prevail. Unless otherwise defined herein,
the terms defined in the Plan shall have the same
defined meanings in this Agreement.
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<PAGE> 33
(b) Any notice, demand or request required or permitted
to be given by either the Company or the Purchaser
pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class
with postage prepaid, and addressed to the parties at
the addresses of the parties set forth at the end of
this Agreement or such other address as a party may
request by notifying the other in writing. Any notice
to the Escrow Holder shall be sent to the Company's
address with a copy to the other party hereto.
(c) The rights of the Company under this Agreement shall
be transferable to any one or more persons or
entities, and all covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by
the Company's successors and assigns. The rights and
obligations of the Purchaser under this Agreement may
only be assigned with the prior written consent of
the Company.
(d) Either party's failure to enforce any provision of
this Agreement shall not in any way be construed as a
waiver of any such provision, nor prevent that party
from thereafter enforcing any other provision of this
Agreement. The rights granted both parties hereunder
are cumulative and shall not constitute a waiver of
either party's right to assert any other legal remedy
available to it.
(e) The Purchaser agrees upon request to execute any
further documents or instruments necessary or
desirable to carry out the purposes or intent of this
Agreement.
(f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO Section 4 HEREOF IS EARNED ONLY BY
CONTINUING SERVICE AS A SERVICE PROVIDER AT THE WILL
OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING
HIRED OR PURCHASING SHARES HEREUNDER). PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,
THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE
AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
PURCHASER'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
PURCHASER'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY
TIME, WITH OR WITHOUT CAUSE.
By Purchaser's signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an
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<PAGE> 34
opportunity to obtain the advice of counsel prior to executing this Agreement
and fully understands all provisions of this Agreement. Purchaser agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant.
DATED:
---------------------
PURCHASER: APEXX TECHNOLOGY INCORPORATED
- --------------------------------- ------------------------------------
Signature By
- --------------------------------- ------------------------------------
Print Name Title
Residence Address:
----------------------------
----------------------------
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<PAGE> 35
EXHIBIT A-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign and
transfer unto __________________________________________________________________
(__________) shares of the Common Stock of Apexx Technology Incorporated
standing in my name of the books of said corporation represented by Certificate
No. _____ herewith and do hereby irrevocably constitute and appoint
_____________________________________ to transfer the said stock on the books of
the within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Restricted Stock
Purchase Agreement (the "Agreement") between________________________ and the
undersigned dated ____________,_____
Dated:
---------------, ----
Signature:
-------------------------
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Repurchase Option, as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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<PAGE> 36
EXHIBIT A-3
JOINT ESCROW INSTRUCTIONS
, 19
- ------------- --
Corporate Secretary
Apexx Technology Incorporated
506 S. 11th Street
Boise, Idaho 83702
Dear :
-----------------
As Escrow Agent for both Apexx Technology Incorporated, a Idaho
corporation (the "Company"), and the undersigned purchaser of stock of the
Company (the "Purchaser"), you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Restricted
Stock Purchase Agreement ("Agreement") between the Company and the undersigned,
in accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively as the "Company") exercises the Company's Repurchase
Option set forth in the Agreement, the Company shall give to Purchaser and you a
written notice specifying the number of shares of stock to be purchased, the
purchase price, and the time for a closing hereunder at the principal office of
the Company. Purchaser and the Company hereby irrevocably authorize and direct
you to close the transaction contemplated by such notice in accordance with the
terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (C) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.
-36-
<PAGE> 37
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
shall deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's Repurchase Option.
Within 90 days after Purchaser ceases to be a Service Provider, you shall
deliver to Purchaser a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased by
the Company or its assignees pursuant to exercise of the Company's Repurchase
Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
-37-
<PAGE> 38
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: Apexx Technology Incorporated
506 S. 11th Street
Boise, Idaho 83702
PURCHASER:
----------------------------------------
ESCROW AGENT: Corporate Secretary
Apexx Technology Incorporated
506 S. 11th Street
Boise, Idaho 83702
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
18. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the internal substantive laws, but not the
choice of law rules, of Idaho.
-38-
<PAGE> 39
Very truly yours,
APEXX TECHNOLOGY INCORPORATED
-------------------------------------------
By
-------------------------------------------
Title
PURCHASER:
- --------------------------------
Signature
- --------------------------------
Print Name
ESCROW AGENT:
- --------------------------------
Corporate Secretary
-39-
<PAGE> 40
EXHIBIT A-4
CONSENT OF SPOUSE
I, ___________________________, spouse of _________________________,
have read and approve the foregoing Restricted Stock Purchase Agreement (the
"Agreement"). In consideration of the Company's grant to my spouse of the right
to purchase shares of Apexx Technology Incorporated, as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated: , 19
--------------- ----
- ---------------------------------
Signature of Spouse
-40-
<PAGE> 41
EXHIBIT A-5
ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of
the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross
income for the current taxable year the amount of any compensation taxable to
taxpayer in connection with his or her receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year
of the undersigned are as follows:
NAME: TAXPAYER: SPOUSE:
------------------ ---------------
ADDRESS:
---------------------------------------------------------------
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
----------------- -------------
TAXABLE YEAR:
---------
2. The property with respect to which the election is made is described
as follows: _________________ shares (the "Shares") of the Common Stock of Apexx
Technology Incorporated (the "Company").
3. The date on which the property was transferred is:
___________________, 19__.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, upon
certain events. This right lapses with regard to a portion of the Shares based
on the continued performance of services by the taxpayer over time.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms will never
lapse, of such property is: $_______-____________.
6. The amount (if any) paid for such property is:
$ .
---------------------
The undersigned has submitted a copy of this statement to the person
for whom the services were performed in connection with the undersigned's
receipt of the above-described property. The transferee of such property is the
person performing the services in connection with the transfer of said property.
-41-
<PAGE> 42
The undersigned understands that the foregoing election may not be
revoked except with the consent of the Commissioner.
Dated: , 19
------------------- ----
- -------------------------------
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: , 19
------------------- ----
- -------------------------------
Spouse of Taxpayer
-42-
<PAGE> 1
EXHIBIT 4.4
APEXX TECHNOLOGY, INC.
1994 INCENTIVE STOCK OPTION PLAN
1. Purpose of Plan. This Stock Option Plan (the "Plan"), is intended to
encourage ownership of shares of Apexx Technology, Inc. (the "Corporation"), by
employees of the Corporation and its subsidiaries and to provide additional
incentive for them to promote the success of the business.
2. Shares Subject to Plan. There will be reserved for use upon the
exercise of options to be granted from time to time under the Plan ("Options"),
an aggregate of 1,000,000 Common Shares, with no par value (the "Common
Shares"), of the Corporation, which shares may be in whole or in part, as the
Board of Directors of the Corporation (the "Board of Directors"), shall from
time to time determine, authorized but unissued Common Shares or issued Common
Shares which shall have been reacquired by the Corporation. For purposes of the
Plan, the "Plan Year" shall be the 12-month period ending on each December 31.
Options shall not be granted in any Plan Year for in excess of an aggregate of
250,000 Common Shares; provided, however, that, if an Option shall expire or
terminate for any reason without having been exercised in full, the shares not
purchased covered thereby shall (unless the Plan shall have been terminated) be
added to the shares otherwise available for Options which may be granted in
accordance with the terms of the Plan.
3. Administration of Plan. The Board of Directors shall appoint a Stock
Option Plan Committee (the "Committee"), which shall consist of not less than
three members of the Board of Directors. Subject to the provisions of the Plan,
the Committee shall have plenary authority in its discretion to determine the
employees of the Corporation and its subsidiaries to whom Options shall be
granted, the number of shares to be covered by each of the Options, and the time
or times at which Options shall be granted; to interpret the Plan; and to
prescribe, amend, and rescind rules and regulations relating to it; provided,
however, that, in the case of employees who shall also be directors of the
Corporation, Options shall be granted in accordance with the provisions of
paragraphs 4 and 5 hereof. The Board of Directors may from time to time appoint
members of the Committee in substitution for or in addition to members
previously appointed and may fill vacancies, however caused, in the Committee.
The Committee shall select one of its members as its chairman and shall hold its
meetings at such times and places as it shall deem advisable. A majority of its
members shall constitute a quorum. All action of the Committee shall be taken by
a majority of its members. Any action may be taken by a written instrument
signed by a majority of the members and action so taken shall be fully as
effective as if it had been taken by a vote of a majority of the members at a
meeting duly called and held. The Committee may appoint a secretary, shall keep
minutes of its meetings, and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
4. Employees to Whom Options Shall be Granted. An Option shall be granted
in each Plan Year:
a. To each director of the Corporation who is also in the employ of
the Corporation or in the employ of one or more of its present or future
subsidiary corporations ("Subsidiaries"), as defined in Section 424 of the
Internal Revenue Code of 1986; and
<PAGE> 2
b. To each other employee of the Corporation or one or more of its
Subsidiaries who shall be selected by the Committee from the Corporation or of
one or more of its Subsidiaries; whether or not in any case the grantee shall
have received one or more Options hereunder in any previous Plan Year or Years.
Any employee to whom an Option shall have been granted in any Plan Year and who
shall thereafter in such Plan Year become a director of the Corporation shall
not be granted another Option in such Plan Year.
In no event shall an Option which is exercisable more than five years from
the date of the grant thereof be granted to any person who, immediately after
such Option is granted, owns (as defined in Sections 422 and 424 of the Internal
Revenue Code of 1986) shares possessing more than 10 percent (10%) of the total
combined voting power or value of all classes of shares of the Corporation or of
its parent or any subsidiary corporation.
5. Number of Shares Covered by Options Granted to Individual Employees.
The number of shares of the Common Stock covered by the Option that shall be
granted to any individual employee in any Plan Year shall not exceed one hundred
thousand dollars ($100,000).
6. Factors Considered in Granting Options. In making any determination as
to employees (other than those who are also directors of the Corporation) to
whom Options shall be granted and as to the number of shares to be covered by
such Options, the Committee shall take into account the duties of the respective
employees, their present and potential contributions to the success of the
Corporation, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.
7. Option Prices. The purchase price of the Common Shares which shall be
covered by each Option shall be 100 percent (100%) of the fair market value of
the Common Shares at the time of granting the Option. Such fair market value
shall be deemed to be the mean of the high and low prices of the Common Shares
on national securities exchanges on the day on which the option shall be
granted, if such exchange price exists. If not, the option price shall be
determined by the Board of Directors from the records of the Company.
Notwithstanding the foregoing, the purchase price for Common Shares under an
Option or Options granted to any person then owning more than 10 percent (10%)
of the total combined voting power of all classes of shares of the Corporation,
or of its parent or subsidiary corporation immediately before the grant of the
Option, shall be 110 percent (110%) of the fair market value of the Common
Shares at the time of grant of the Option.
8. Terms of Options. Each Option must be exercised within ten (10) years
from the date of the grant thereof; provided, however, that any Option granted
to any person then owning more than 10 percent (10%) of the total combined
voting power of all classes of shares of the Corporation, or of its parent or
subsidiary corporation, must be exercised within five (5) years from the date of
the grant thereof. The Option term may be subject to termination prior to the
expiration of the period mentioned above, as provided hereinafter.
-2-
<PAGE> 3
9. Vesting of Options. An Option to purchase shares granted under the
terms and conditions of this Plan shall vest with the optionee over a five (5)
year period, one-fifth (1/5) per year, commencing on the first anniversary date
of issuance of the Option under the Option Agreement with the Employee and
continuing on each anniversary date thereafter.
10. Exercise of Options. A vested Option may be exercised, at any time or
from time to time, as to any part of or all the shares which shall be covered
thereby; provided, however, that:
a. An Option may not be exercised as to less than 100 shares at any
one time (or the remaining shares then purchasable under the Option, if less
than 100 shares); and
b. An Option shall not be exercisable prior to the date the Option
vests in the Employee. The purchase price of the shares as to which an Option
shall be exercised shall be paid in full in cash at the time of exercise. Except
as provided in paragraph 12 and 13 hereof, an Option may not be exercised at any
time unless the holder thereof shall have been in the continuous employ of the
Corporation and/or of one or more of its Subsidiaries, from the date of the
granting of the Option to the date of its exercise. The holder of an Option
shall not have any of the rights of a shareholder with respect to the shares
covered by his Option, except to the extent that one or more certificates for
such shares shall be delivered to him upon the due exercise of the Option.
11. Nontransferability. An Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and an Option may be
exercised, during the lifetime of the employee, only by such employee. More
particularly, but without limitation, any Option granted hereunder may not be
assigned, transferred, pledged or hypothecated, in any way, shall not be
assignable by operation of law, and shall not be subject to execution,
attachment, or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof and any levy of any execution, attachment or similar process upon an
Option shall be null and void and of no effect.
12. Termination of Employment. In the event that the employment of an
employee to whom an Option has been granted is terminated (otherwise than by
reason of death), any such vested Option may be exercised (to the extent that
the employee shall have been entitled to do so at the termination of his
employment) at any time within three months after such termination, but not more
than ten (10) years (five (5) years if a ten percent (10%) shareholder) after
the date on which such Option was granted. So long as the holder of an Option
shall continue to be an employee of the Corporation or one or more of its
Subsidiaries, his Option shall not be affected by any change in his duties or
position. Nothing in the Plan or in any Option agreement shall confer upon any
employee any right to continue in the employ of the Corporation or of any of its
Subsidiaries, or interfere in any way with the right of the Corporation or any
such subsidiary to terminate his employment at any time.
-3-
<PAGE> 4
13. Death of Employee.
a. If an employee to whom an Option has been granted dies while he is
employed by the Corporation or one or more of its Subsidiaries any vested Option
may be exercised (to the extent that the employee shall have been entitled to do
so at the date of his death) by a legatee or legatees of the employee under his
last will, or by his personal representatives or distributees, and subject to
the provisions of paragraph 8 hereof, at any time within one (1) year after his
death.
b. If an employee to whom an Option has been granted dies within
three (3) months after the termination of his employment, any vested Option may
be exercised (to the extent that the employee shall have been entitled to do so
at the date of his death) by a legatee or legatees of the employee under his
last will, or by his personal representatives or distributees, and subject to
the provisions of paragraph 8 hereof, at any time within six (6) months after
his death.
14. Adjustments Upon Changes in Capitalization. In the event of changes
in the outstanding Common Shares of the Corporation by reason of share
dividends, split-ups, recapitalizations, mergers, consolidations, combination or
exchange of shares, separations, reorganizations, or liquidations, the number
and class of shares available under the Plan in the aggregate and in any Plan
Year and the maximum number of shares as to which Options may be granted to any
employee shall be correspondingly adjusted by the Committee. Notwithstanding the
foregoing, no adjustment shall be made in the minimum number of shares which may
be purchased at any time.
15. Change of Control.
a. "Change of Control" shall mean:
(1) A change of control of the Corporation of a nature that would
be required to be reported in response to Item l(a) of the Current Report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") if the Corporation or
Bank were subject to the Exchange Act; or
(2) A third person, including a "group," as defined in Section
13(d) of the Exchange Act, becomes the beneficial owner, directly or indirectly,
of fifty percent (50%) or more of the combined voting power of the outstanding
voting securities of the Corporation; or
(3) Individuals constituting the Board as of the date hereof (the
"Incumbent Board") cease for any reason to constitute at least one-third (l/3)
thereof; provided, however, that for purposes of this Plan, any person becoming
director subsequent to the date hereof whose election or nomination for election
by the shareholders of the Corporation was approved by a vote of at least
fifty-one percent (51%) of the directors comprising the Incumbent Board (other
than an election or nomination in connection with an actual or threatened
election contest relating to the election of directors of the Corporation, as
such terms are used in Rule 14(a)-11 of Regulation 14(a)
-4-
<PAGE> 5
promulgated in the Exchange Act) shall be considered as though such person were
a member of the Incumbent Board.
b. Notice to Participants. Not less than thirty (30) days prior to a
Change of Control, the Committee or the Board shall notify each Participant of
the pending Change of Control ("Change Notice").
c. Exercise of Options. Upon delivery of a Change Notice to all
Participants and conditioned upon and subject to the occurrence of the Change of
Control, all Options granted prior to the date on which the Change of Control
occurs (the "Change Date") shall be exercisable in full, and not only as to
those shares with respect to which installments, if any, have accrued under any
Participant's Option Agreement, notwithstanding any other provisions of this
Plan except provisions respecting the expiration or termination of a
Participant's rights under this Plan. Participants shall be entitled to exercise
all or any portion of such Options on or before the last day prior to the Change
Date.
d. Delay in Change of Control. In the event the Change of Control is
delayed for any reason, the Committee or the Board shall promptly notify all
Participants of the new Change Date, and the right to exercise Options pursuant
to this paragraph 15 shall be extended to on or before the day prior to the new
Change Date.
e. Change of Control Not Occurring. If a Change of Control does not
occur for any reason other than a delay or extension of the Change Date, options
exercised pursuant to this paragraph 15 shall not be effective and thereafter
all rights to exercise such Options shall return to and remain subject to the
terms and conditions, including the vesting schedule, set forth in each
Participant's Option Agreement with the Corporation and the other provisions of
this Plan. No stock or stock certificates shall be issued with respect to any
Option granted under this paragraph 15 unless and until the Change of Control
occurs.
16. Effectiveness of Plan. The Plan shall become effective on such date
as the Board of Directors shall determine, but only after:
a. The shareholders of the Corporation shall, by the affirmative vote
of a majority in interest of the Common Shares, in addition to the affirmative
vote of a majority in interest of all the shares of the Corporation, have
approved the Plan;
b. The Board of Directors shall have been advised by counsel that all
applicable legal requirements have been complied with.
17. Time of Granting Options. Nothing contained in the Plan or in any
resolution adopted or to be adopted by the Board of Directors or the
stockholders of the Corporation nor any action taken by the Committee shall
constitute the granting of any Option. The granting of an Option shall take
place only when a written Option agreement substantially in the form of the
Option agreement
-5-
<PAGE> 6
which is attached hereto and marked Exhibit A shall have been duly executed and
delivered by or on behalf of the Corporation and by the employee to whom such
Option shall be granted.
18. Limitation. No employee eligible to participate herein shall be granted
Options to purchase Common Shares which are exercisable during any one calendar
year, to the extent that the fair market value of such shares (determined at the
time of the grant of the Option) exceeds $100,000. No employee shall be given
the opportunity to exercise Options granted hereunder with respect to shares
valued in excess of $100,000 in any calendar year; provided, however, that such
exercise will be permitted if and to the extent that the right to first exercise
said Options shall have accumulated over a number of years rather than having
first occurred in the year of exercise.
19. Termination and Amendment of Plan. The Plan shall terminate on
_____________ (ten years after adoption of this Plan or the date this Plan is
approved by the shareholders, whichever is earlier), and an Option shall not be
granted under the Plan after that date. The Plan (including the form of Option
agreement which is attached hereto and marked Exhibit A) may at any time or from
time to time be terminated, modified, or amended by the Board of Directors of
the Corporation, by the affirmative vote of a majority of said Board, subject to
the requirements of law regarding the approval of a majority in interest of all
the shares of the Corporation. The Board of Directors may at any time and from
time to time modify or amend the Plan (including such form of Option agreement)
in such respects as it shall deem advisable in order that the Options shall
continue to be "incentive stock options as defined in Section 422 of the
Internal Revenue Code of 1986, or to conform to any change in the law, or in any
other respect which shall not change:
a. The maximum number of shares for which Options may be granted
under the Plan either in the aggregate or in any Plan Year or to any individual
employee;
b. The Option prices other than to change the manner of determining
the fair market value of the Common Shares for the purposes of paragraph 7
hereof to conform with any then applicable provisions of the Internal Revenue
Code or regulations thereunder;
c. The periods during which Options may be granted or exercised;
d. The provisions relating to the determination of employees to whom
Options shall be granted and the numbers of shares to be covered by such
Options; or
e. The provisions relating to adjustments to be made upon changes in
capitalization. The termination or any modification or amendment of the Plan
shall not, without the consent of an employee, affect his rights under an Option
previously granted to him.
Executed this _____ day of ________________, 199__.
APEXX TECHNOLOGY, INC. an Idaho corporation
-6-
<PAGE> 7
By
-----------------------------------------
Tom Loutzenheiser, Jr., President
By
-----------------------------------------
Gayl Loutzenheiser, Secretary
-7-
<PAGE> 8
OPTION AGREEMENT
THIS OPTION AGREEMENT, made this ____ day of 1994, by and between Apexx
Technology, Inc., an Idaho corporation (the "Corporation"), and ______________,
the employee of the Corporation or one or more of its subsidiaries (the
"Employee").
RECITALS
A. The Corporation desires, by affording the Employee an opportunity to
purchase shares of its no par value stock (the "Common Shares"), to give to
Employee an inducement to acquire a proprietary interest in the Corporation and
an added incentive to advance the interests of the Corporation.
B. The stock option granted herein is granted pursuant to the Apexx
Technology, Inc., 1993 Incentive Stock Option Plan, which has been approved by
the Corporation's shareholders.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. Grant of Option. The Corporation hereby grants to the Employee the
right, privilege and option, to purchase Shares (such number being subject to
adjustment as provided in paragraph 9 hereof) on the terms and conditions herein
set forth.
2. Purchase Price. The purchase price of the Common Shares covered by the
Option shall be $______ per share (110% of present market value).
3. Term of Option. The term of the Option shall be for a period of five
(5) years from the date hereof, subject to earlier termination as provided in
paragraphs 7 and 8, below.
4. Time of Exercise of Option. The Option may be exercised within the
term set forth in paragraph 3, above, and subject to the terms and conditions of
paragraphs 6, 7 and 8, below, at any time or from time to time, as follows:
a. Shares subject to this Option Agreement vest as the Employee
continues employment with the Corporation. The Employee's right to exercise the
Option for the purchase of Common Shares, shall vest over a five (5) year
period, one-fifth (1/5) of the Common Shares granted hereunder each year,
commencing on the first year anniversary date of this Agreement and continuing
on each anniversary date thereafter. No stock vests until one (1) year following
commencement of employment.
b. The Option may not be exercised as to less than one hundred (100)
shares at any one time unless the remaining shares then purchasable under this
Option is less than one hundred (100) shares.
<PAGE> 9
5. Method of Exercise. Subject to the terms and conditions of this Option
Agreement, the Option may be exercised by written notice to the Secretary of the
Corporation, at the general office of the Corporation located at 506 South 11th,
Suite D, Boise, Idaho, or such other office as may be established. Such notice
shall state the election to exercise the Option and the number of shares in
respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. Such notice shall either:
a. Be accompanied by payment of the full purchase price of such
shares, in which event the Corporation shall deliver a certificate or
certificates representing such shares as soon as practicable after the notice
shall be received; or
b. Fix a date (not less than five (5) or more than ten (10) business
days from the date such notice shall be received by the Corporation) for the
payment of the full purchase price of such shares to the Secretary of the
Corporation, against delivery of a certificate or certificates representing such
shares. Payment of such purchase price shall, in either case, be made by check
payable to the order of the Corporation. The certificate or certificates for the
shares as to which the Option shall have been so exercised shall be registered
in the name of the person or persons so exercising the Option (or, if the Option
shall be exercised by the Employee and if the Employee shall so request in the
notice exercising the Option, shall be registered in the name of the Employee
and another person jointly, with right of survivorship) and shall be delivered
as provided above to or upon the written order of the person or persons
exercising the Option. In the event the Option shall be exercised, pursuant to
paragraph 8 hereof, by any person or persons other than the Employee, such
notice shall be accompanied by appropriate proof of the right of such person or
persons to exercise the Option. All shares that shall be purchased upon the
exercise of the Option as provided herein shall be fully paid and nonassessable.
6. Nontransferability. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Employee, only by the Employee. More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as provided above), pledged, or
hypothecated in any way, shall not be assignable by operation of law, and shall
not be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment, or
similar process upon the Option, shall be null and void and without effect.
7. Termination of Employment. In the event that the employment of the
Employee shall be terminated (otherwise than by reason of death), the Option
may, subject to the provisions of paragraphs 3 and 5 hereof, be exercised by the
Employee (to the extent that he shall have been entitled to do so at the
termination of his employment) at any time within three (3) months after such
termination. So long as the Employee shall continue to be an employee of the
Corporation or one or more of its subsidiaries, the Option shall not be affected
by any change in his duties or position.
-2-
<PAGE> 10
Nothing in this Option Agreement shall confer upon the Employee any right to
continue in the employ of the Corporation or of any of its subsidiaries or
interfere in any way with the right of the Corporation or any such subsidiary to
terminate his employment at any time.
8. Death of Employee. If the Employee shall die while he shall be
employed by the Corporation or one or more of its subsidiaries or within three
(3) months after the termination of his employment, the Option may be exercised
subject to the provisions of paragraphs 3 and 5 hereof (to the extent that the
Employee shall have been entitled to do so at the date of his death) by a
legatee or legatees of the Employee under his last will, or by his personal
representatives or distributees, at any time within one (1) year after his
death.
9. Changes in Capital Structure. If all or any portion of the Option
shall be exercised subsequent to any share dividend, split-up, recapitalization,
merger, consolidation, combination or exchange of shares, separation,
reorganization, or liquidation occurring after the date hereof, as a result of
which shares of any class shall be issued in respect of outstanding Common
Shares or Common Shares shall be changed into the same or a different number of
shares of the same or another class or classes, the person or persons so
exercising the Option shall receive, for the aggregate price paid upon such
exercise, the aggregate number and class of shares which, if Common Shares (as
authorized at the date hereof) had been purchased at the date hereof for the
same aggregate price (on the basis of the price per share set forth in paragraph
2 hereof) and had not been disposed of, such person or persons would be holding,
at the time of such exercise, as a result of such purchase and all such share
dividends, split-ups, recapitalizations, mergers, consolidations, combinations
or exchange of shares, separations, reorganizations, or liquidations; provided,
however, that no fractional share shall be issued upon any such exercise, and
the aggregate price paid shall be appropriately reduced on account of any
fractional share not issued. No adjustment shall be made in the minimum number
of shares which may be purchased at any one time.
10. Limitation. In accordance with Section 422 of the Internal Revenue
Code of 1986, as amended from time to time, the Employee shall not exercise any
one or more Options hereunder if and to the extent that the Employee would
thereby be entitled to purchase Common Shares in any one calendar year the value
of which, determined at the time of the grant of the Option or Options, would
exceed $100,000; provided, however, that such exercise shall be permitted if and
to the extent that the right to first exercise said Options shall have
accumulated over a number of years rather than having first occurred in the year
of exercise.
11. General. The Corporation shall at all times during the term of the
Option reserve and keep available such number of Common Shares as will be
sufficient to satisfy the requirements of this Option Agreement, shall pay all
original issue and transfer taxes with respect to the issue and transfer of
shares pursuant hereto and all other fees and expenses necessarily incurred by
the Corporation in connection therewith, and will from time to time use its best
efforts to comply with all laws and regulations which, in the opinion of counsel
for the Corporation, shall be applicable thereto.
-3-
<PAGE> 11
12. Binding Effect. This Agreement shall be binding upon the heirs,
personal representatives, administrator, successors and assigns of the parties
hereto.
13. Subsidiary. As used herein, the term "subsidiary" shall mean any
present or future corporation which would be a "subsidiary corporation" of the
Corporation, as that term is defined in Section 424 of the Internal Revenue Code
of 1986.
IN WITNESS WHEREOF, the Corporation has caused this Option Agreement to be
duly executed by its officers "hereunto duly authorized, and the Employee has
hereunto set his hand and seal, all on the day and year first above written.
APEXX TECHNOLOGY, INC. an Idaho corporation
By
-----------------------------------------
Tom Loutzenheiser, Jr., President
By
-----------------------------------------
Gayl Loutzenheiser, Secretary
Acknowledgment of Receipt of
Apexx Technology, Inc.
1993 Incentive Stock Option Plan
- ------------------------------------- ------------------------------
Employee Date
-4-
<PAGE> 1
EXHIBIT 5.1
June 7, 1999
Board of Directors
eSoft, Inc.
5335 Sterling Drive, Suite C
Boulder, Colorado 80301
Re: Sale of Common Stock Pursuant to Registration
Statement on Form S-8 Covering Apexx Technology
Incorporated Restricted Stock Option Plan, Founders
Non-qualified Stock Option Agreement, 1998 Stock
Plan, and 1994 Stock Plan.
Ladies and Gentlemen:
We have acted as special counsel to eSoft, Inc., a Delaware
corporation, (the "Company") in connection with the registration pursuant to a
Registration Statement on Form S-8 (the "Registration Statement") of 1,356,003
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), issuable upon exercise of options or awards that have been or may be
granted under the Apexx Technology Incorporated Restricted Stock Option Plan,
Founders Nonqualified Stock Option Agreement, 1998 Stock Plan, and 1994 Stock
Plan (the "Apexx Plans"). On May 25, 1999 the Company and Apexx Technology
Incorporated ("Apexx") concluded a merger pursuant to which Apexx became a
wholly-owned subsidiary of the Company. Pursuant to the terms of the
acquisition, the Company agreed to assume the Apexx Plans and to convert the
right to purchase shares of Apexx common stock into the right to purchase shares
of the Company's common stock. The 1,356,003 shares of Common Stock being
registered under the Registration Statement are referred to herein as the
"Shares." This opinion is delivered to you pursuant to Item 601 (b)(5) of
Regulation S-K under the Securities Act of 1933, as amended. With your
permission, all assumptions and statement of reliance herein have been made
without independent investigation or verification on our part except to the
extent otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records of
the Company, (iii) examined such certificates of public officials, officers or
other representatives of the Company, and other persons, and such other
documents, and (iv) reviewed such information from officers and representatives
of the Company and others as we have deemed necessary or appropriate for the
purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all
natural persons executing documents (other than the capacity of officers of the
Company executing documents in such capacity), the genuineness of all signatures
on original or certified copies, and the conformity to original or certified
documents of all copies submitted to us s conformed or reproduction copies. As
to various questions of fact relevant to the opinion expressed herein, we have
relied upon and
<PAGE> 2
assumed the accuracy of, certificates and oral or written statements and other
information of or from public officials, officers or other representatives of
the Company, and other persons
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Shares, when issued and paid for (with
the consideration received by the Company being not less than the par value
thereof) in accordance with the Plan and any agreement applicable to the Shares,
will be validly issued, fully paid, and non-assessable.
The opinion expressed herein is limited to the General Corporation Law
of the State of Delaware. We assume no obligation to supplement this letter if
any applicable laws change after the date hereof or if we become aware of any
facts that may change the opinion expressed herein after the date hereof. While
we are not licensed to practice law in the State of Delaware, we have reviewed
applicable provisions of the General Corporation Law of Delaware as we have
deemed appropriate in connection with the opinions expressed herein that are
governed or affected by the General Corporation Law of Delawre.
The opinion expressed herein is solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted in whole or in part without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 relating to the registration of the Shares,
as amended from time to time, as the attorneys who will pass upon legal matters
in connection with the issuance of the Shares, and to the filing of this opinion
as an exhibit to the aforesaid Registration Statement. In giving this consent,
we do not admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended or the rules of the
Securities and Exchange Commission.
Very truly yours,
/s/ DAVIS, GRAHAM & STUBBS LLP
DAVIS, GRAHAM & STUBBS LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
eSoft, Inc.
Broomfield, CO
We consent to the incorporation by reference in this
Registration Statement on Form S- 8, pertaining to the APEXX TECHNOLOGY
INCORPORATED RESTRICTED STOCK OPTION PLAN,FOUNDERS NON-QUALIFIED STOCK OPTION
AGREEMENT,1998 STOCK PLAN and 1994 STOCK PLAN, of our reports dated January 29,
1999, on the financial statements of eSoft, Inc. as at December 31, 1998 and
1997 and for each of the years in the three-year period ended December 31, 1998,
included in its annual report (Form 10-KSB) of eSoft, Inc. for the year ended
December 31, 1998, filed with the Securities and Exchange Commission.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Boulder, Colorado,
June 7, 1999
