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EXHIBIT 1
Government Technology Services, Inc.
1996 STOCK OPTION PLAN
Nonqualified Stock Option Agreement for Employees
Government Technology Services, Inc., a Delaware corporation (the
"Company"), hereby grants to Dendy Young (the "Optionee") an option to purchase
a total of 100,000 shares of Common Stock (the "Shares") of the Company, at the
price and on the terms set forth herein, and in all respects subject to the
terms and provisions of the Company's 1996 Stock Option Plan (the "Plan")
applicable to nonqualified stock options, which terms and provisions are hereby
incorporated by reference herein. Unless the context herein otherwise requires,
the terms defined in the Plan shall have the same meanings herein.
1. Nature of the Option. This Option is intended to be a nonqualified
stock option and is not intended to be an incentive stock option within the
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meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or to otherwise qualify for any special tax benefits to the Optionee.
2. Date of Grant; Term of Option. This Option is granted as of August
3, 1999 (the "Grant Date"), and it may not be exercised later than August 3,
2006.
3. Exercise Price. The exercise price is $4.00 per Share, which price
is not less than 100% of the Fair Market Value thereof on the Grant Date.
4. Method of Payment. The consideration to be paid for the Shares to
be issued upon exercise of this Option and to be paid to satisfy any withholding
tax obligation incident thereto, including the method of payment, may consist
entirely or in any combination of cash, check, a commitment to pay by a broker,
or such other payment method or combination thereof as set forth in Section 7(d)
of the Plan.
5. Exercise of Option. This Option shall be exercisable during its
term only in accordance with the terms and provisions of the Plan and this
Option as follows:
(a) This Option shall vest and be exercisable cumulatively in four
equal annual installments, the first installment occurring immediately upon the
date of grant and the remaining installments occurring upon each subsequent
anniversary of the date of grant. An Optionee who has been in continuous
service with the Company since the grant of this Option may exercise the
exercisable portion of his or her Option in whole or in part at any time during
his or her employment. However, an Option may not be exercised for a fraction
of a Share. In the event of the termination of the Optionee's service as an
Employee or disability or death, the provisions of Sections 7 or 8 below shall
apply to the right of the Optionee to exercise this Option.
(b) This Option shall be exercisable by written notice which shall
state the election to exercise this Option, the number of Shares in respect to
which this Option is being exercised and such other representations and
agreements as may be required by the Company hereunder or pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company or such other person as may be designated by the Company. The written
notice shall be accompanied by payment of the purchase price and associated
withholding taxes as set forth in Section 4 above, and an executed Notice of
Exercise of Stock Option in the form attached hereto. The certificate or
certificates for the Shares as to which this Option is exercised shall be
registered in the name of the Optionee.
(c) No rights of a stockholder shall exist with respect to the
Shares under this Option as a result of the grant of this Option or the exercise
of this Option. Such rights shall exist only after issuance of a stock
certificate in accordance with Section 8.h. of the Plan.
6. Restrictions on Exercise. This Option may not be exercised if the
issuance of Shares upon Optionee's exercise would constitute a violation of any
applicable Federal or state securities law or other applicable law or
regulation. As a condition to the exercise of this Option, the Company may
require the Optionee to make any representation and warranty to the Company as
may be required by any applicable law or regulation.
7. Termination of Employment. If the Optionee ceases to serve as an
Employee for any reason other than death or permanent and total disability
(within the meaning of Section 22(e)(3) of the Code) and thereby terminates his
or her
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Continuous Status as an Employee, the Optionee shall have the right to exercise
this Option at any time within three months after the date of such termination
to the extent that the Optionee was entitled to exercise this Option at the date
of such termination, subject to Section 8.e. of the Plan. To the extent that the
Optionee was not entitled to exercise this Option at the date of termination, or
to the extent this Option is not exercised within the time specified herein,
this Option shall terminate. Notwithstanding the foregoing, this Option shall
not be exercisable after the expiration of the term set forth in Section 2
hereof.
8. Death or Disability. If an Optionee's Continuous Status as an Employee
ceases due to death or permanent and total disability (within the meaning of
Section 22(e)(3) of the Code) of the Optionee, this Option may be exercised
within six months following the date of death or termination of employment due
to permanent or total disability (subject to any earlier termination of this
Option as provided by its terms), by the Optionee in the case of permanent or
total disability, or in the case of death by the Optionee's estate or by a
person who acquired the right to exercise this Option by bequest or inheritance,
but in any case only to the extent the Optionee was entitled to exercise this
Option at the date of his or her termination of employment by death or permanent
and total disability. To the extent that he or she was not entitled to exercise
such Option at the date of his or her termination of employment by death or
permanent and total disability, or if he or she does not exercise such Option
(which he or she was entitled to exercise) within the time specified herein,
this Option shall terminate. Notwithstanding the foregoing, this Option shall
not be exercisable after the expiration of the term set forth in Section 2
hereof.
9. Tax Withholding Upon Exercise of Option. The Company reserves the
right to withhold, in accordance with any applicable laws, from any
consideration payable to Optionee any taxes required to be withheld by Federal,
state or local law as a result of the grant or exercise of this Option or the
sale or other disposition of the Shares issued upon exercise of this Option. If
the amount of any consideration payable to the Optionee is insufficient to pay
such taxes or if no consideration is payable to the Optionee, upon the request
of the Company, the Optionee shall pay to the Company in cash an amount
sufficient for the Company to satisfy any Federal, state or local tax
withholding requirements it may incur as a result of the grant or exercise of
this Option, or the sale or other disposition of the Shares issued upon the
exercise of this Option.
10. Nontransferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution, or, if permitted of Options granted under Rule
16bB3, transfer between spouses incident to a divorce. Subject to the foregoing
and the terms of the Plan, the terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.
11. No Right of Employment. Neither this Plan nor any Option granted
hereunder shall confer upon any Optionee any right to continue to serve as an
Employee of the Company or limit in any respect the right of the Company to
discharge the Optionee at any time, with or without cause and with or without
notice.
12. Miscellaneous.
(a) Successors and Assigns. This Option Agreement shall bind and
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inure only to the benefit of the parties to this Option Agreement (the
"Parties") and their respective successors and assigns.
(b) No Third-Party Beneficiaries. Nothing in this Option Agreement is
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intended to confer any rights or remedies on any persons other than the Parties
and their respective successors or assigns. Nothing in this Option Agreement is
intended to relieve or discharge the obligation or liability of third persons to
any Party. No provision of this Option Agreement shall give any third person
any right of subrogation or action over or against any Party.
(c) Amendments.
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(i) The Company reserves the right to amend the terms and
provisions of this Option without the Optionee's consent to comply with any
Federal or state securities law.
(ii) Except as specifically provided in subsection (i) above, this
Option Agreement shall not be changed or modified, in whole or in part, except
by supplemental agreement signed by the Parties. Any Party may waive compliance
by any other Party with any of the covenants or conditions of this Option
Agreement, but no waiver shall be binding unless executed in writing by the
Party making the waiver. No waiver or any provision of this Option Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. Any
consent or notice under this Option Agreement shall be in writing and shall be
effective only to the extent specifically set forth in such writing.
(d) Governing Law. To the extent that Federal laws do not otherwise
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control, the Plan and all determinations made or actions taken pursuant hereto
shall be governed by the laws of the Commonwealth of Virginia, without regard to
the conflict of laws rules thereof.
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(e) Severability. If any provision of this Option Agreement or the
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application of such provision to any person or circumstances is held invalid or
unenforceable, the remainder of this Option Agreement, or the application of
such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby.
(f) Optionee Representation. Optionee acknowledges receipt of the
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Plan and hereby accepts the grant of this Option subject to all the terms and
provisions thereof.
IN WITNESS WHEREOF, this Option Agreement has been duly executed on
behalf of the Company by an authorized representative of the Company and by the
Optionee and is dated as of the Grant Date.
Government Technology Services, Inc. Optionee
By: Signature:
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Name: Judith B. Kassel Address:
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Title: Vice President & General Counsel
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[GOVERNMENT TECHNOLOGY SERVICES, INC. LOGO]
Government Technology Services, Inc.
NOTICE OF EXERCISE OF STOCK OPTION
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(Please print legibly or type)
I, Dendy Young ("Optionee"), hereby agree, represent and warrant to
Government Technology Services, Inc. (the "Company") as follows:
1. On August 3, 1999, I was granted a Stock Option (the "Option") pursuant
to the Company's 1996 Stock Option Plan (the "Plan").
2. Pursuant to the Option, I was granted the right to purchase 100,000
shares of the Company's Common Stock, subject to adjustment in accordance with
the Plan (the "Optioned Shares").
3. I am eligible to exercise the Option to the extent that I am exercising
the Option.
4. I hereby elect to exercise the Option to purchase __________ of such
Optioned Shares (the "Shares") under the Stock Option Agreement evidencing said
Option at $4.00 per Share, for an aggregate purchase price of $__________.
5. This Notice of Exercise of Stock Option is accompanied by payment in
full for the Shares and withholding tax in the form of cash, a check or any
combination thereof.
6. In connection with my exercise of the Option, I have received a copy of
the Company's Prospectus relating to the Company's Common Stock issuable under
the Plan.
Dated:
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Signature of Optionee
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Social Security Number Address
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City, State, Zip
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Received on behalf of Government Technology Services, Inc. on ________________.
Signature:
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Print Name:
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