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DAOU - Executive Stock Option Agreement
Exhibit 10.32
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
Daou Systems, Inc.
EXECUTIVE STOCK OPTION AGREEMENT (Non-Statutory)
This Executive Stock Option Agreement is made and entered as of the 10th day of February, 2003. This option is being issued outside of the 1996 Stock Option Plan (the " Plan") of Daou Systems, Inc., a Delaware corporation (the " Corporation"), however, any terms not defined in this Agreement will have the meanings ascribed to such terms in the Plan. The Committee administering the Plan has selected Daniel J. Malcolm (the " Optionee") to receive the following grant of a non-statutory stock option (" Stock Option") to purchase shares of the common stock of the Corporation on the terms and conditions set forth below to which Optionee accepts and agrees:
1. Stock Option Granted:
Number of Shares Subject to Option 100,000
Date of Grant February 10, 2003
Exercise Price Per Share $0.28
Expiration Date February 10, 2013
2. The Stock Option is granted to purchase up to the number of shares of authorized but unissued common stock of the Corporation specified in Section 1 (the "Shares"). The Stock Option will expire, and all rights to exercise it will terminate on the earliest of: (a) the date provided below in Sections 5 and 6, and (b) the Expiration Date. The number of shares subject to the Stock Option granted pursuant to this Agreement will be adjusted as provided in the Plan. This Stock Option is intended by the Corporation and the Optionee to be a Non-Statutory Stock Option and does not qualify for any special tax benefits to the Optionee.
3. Except as otherwise set forth herein, the Stock Option will be exercisable in all respects in accordance with the terms of the Plan as they relate to Non-Statutory Stock Option which are incorporated herein by this reference. Optionee acknowledges having received and read a copy of the Plan.
4. Optionee will have the right to exercise the Stock Option in accordance with the following schedule:
(a) 100,000 Shares
(i) The Shares subject to the Stock Option will vest in thirty-six equal increments on the monthly anniversary of the date of grant through February 10, 2006.
(ii) If the Company enters into a binding agreement during the time that Optionee is employed by the Company that results in a change in control (as defined in the following sentence), then 100% of the Shares will vest. For purposes of this Option Agreement, "change in control" means that:
1
(1) any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity or person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of the Corporation representing fifty percent (50%) or more of the combined voting power of the Corporation's then outstanding securities entitled to vote in the election of directors of the Corporation; or
(2) there occurs a reorganization, merger, consolidation or other corporate transaction involving the Corporation ("Transaction"), in each case, with respect to which the stockholders of the Corporation immediately prior to such Transaction do not, immediately after the Transaction, own more than fifty percent (50%) of the combined voting power of the Corporation or other corporation resulting from such Transaction; or
(3) all or substantially all of the assets of the Corporation are sold, liquidated or distributed.
(iii) If at any time prior to July 24, 2004, Optionee's employment with the corporation is terminated by the corporation without "Cause" or by Optionee for Good Reason as those terms are defined in the Employment Agreement, then Optionee may exercise the Stock Option as to one hundred percent (100%) of the remaining 100,000 Shares which are not otherwise vested on the date of the termination.
(iv) In the event Optionee's employment is terminated for any reason other than as defined in Section 4(a)(iii) of this Agreement, any Stock Option described in Section 4(a) of this Option Agreement not vested as of the date of the termination will not vest. Any Stock Option described in this Section 4(a) of this Agreement that is vested as of the date of such termination may be exercised in accordance with Section 6 of this Agreement.
(b) The right to exercise the Stock Option will be cumulative. Optionee may buy all, or from time to time any part, of the maximum number of shares which are exercisable under the Stock Option, but in no case may Optionee exercise the Stock Option with regard to a fraction of a share, or for any share for which the Stock Option is not exercisable.
5. The Stock Option will lapse and...
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