[Government Technology Services, Inc. Logo]
GOVERNMENT TECHNOLOGY SERVICES, INC.
Nonstatutory Stock Option Agreement
Government Technology Services, Inc., a Delaware corporation (the
"Company"), hereby grants to ▇. ▇▇▇▇▇ ▇▇▇▇▇ (the "Optionee") an option (the
"Option") to purchase a total of 700,000 shares of Common Stock (the "Shares")
of the Company, at the price and on the terms set forth herein.
Nature of the Option. This Option is intended to be a nonstatutory
stock option and is not intended to be an incentive stock option within the
meaning of Section 442A of the Internal Revenue Code of 1986, as amended (the
"Code"), or otherwise to qualify for any special tax benefits to the Optionee.
1. Definitions. As used herein, the following definitions shall
apply:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Common Stock" shall mean the Common Stock, $.005 par
value, of the Company.
(c) "Eligible Common Stock" shall mean the Optioned
Stock which the Optionee shall have exercised his right to acquire in accordance
with Section 5.
(d) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
(e) "Optioned Stock" shall mean the Common Stock subject
to this Option.
(f) "Person" shall mean any individual,
partnership, corporation, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
(g) "Prospectus" shall mean the prospectus included
in a Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of the Common Stock covered by the
Registration Statement, and by all other amendments, and in each case including
all material incorporated by reference therein.
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(h) "Registration Statement" shall mean any
registration statement of the Company on Form S-8 under the Securities Act and
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all material incorporated by reference therein and all exhibits
thereto.
(i) "SEC" shall mean the Securities and Exchange
Commission.
(j) "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations thereunder.
(k) "Subsidiary" shall mean a subsidiary corporation,
whether now or hereafter existing, as defined in Sections 425(f) and (g) of the
Code.
3. Date of Grant; Term of Option. This Option is granted as of
December 18, 1995 (the "Grant Date"), and it may not be exercised later than
December 18, 2005 (the "Termination Date").
4. Option Exercise Price. The Option exercise price is $3.75 per
Share.
5. Exercise of Option. This Option shall be exercisable during
its term only as follows:
(a) Right to Exercise. This Option shall vest and be
exercisable cumulatively as follows: 350,000 Shares on the Grant Date,
250,000 Shares on the first anniversary of the Grant Date, and 100,000
Shares on the second anniversary of the Grant Date; provided, however, that
in the event of termination by the Company of that certain Employment
Agreement dated December 18, 1995 between the Company and the Optionee (the
"Employment Agreement") pursuant to Section 8(a)(ii) thereof, or upon the
occurrence of a Change of Control (as defined therein) and subsequent
employment termination pursuant to Section 8(c)(ii) thereof, all previously
unvested installments of this Option shall immediately and cumulatively vest
and be exercisable; and provided, further, that if the Employment Agreement
is terminated by the Company for Cause (as defined therein) all previously
unvested installments of this Option shall not vest and this Option shall not
be exercisable with respect to the Shares of Optioned Stock covered by such
installments.
(b) Method of Exercise. This Option shall be exercisable
from time to time as to all or any portion of the Shares as to which this Option
is then exercisable by written notice in the form of Attachment A attached
hereto (the "Notice"). The 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 Notice shall be
accompanied by payment of the aggregate Option exercise price. Such payment
of the aggregate Option exercise price shall be by cash or check or by tender
of shares of Common Stock, which shares shall be valued at the price at which
the Common Stock was last traded on the National Association of Securities
Dealers, Inc. Automated Quotation System on the day before such tender. The
certificate or certificates for the Shares as to which this Option shall be
exercised shall be registered in the name of the Optionee and shall be
registered as required under Section 15 hereof.
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(c) Restrictions on Exercise. This Option may not be
exercised for a fraction of a Share.
(d) Effect of Exercise. Exercise of this Option in any
manner shall result in a decrease in the number of Shares which thereafter
may be available for sale under this Option by the number of Shares as to
which this Option is exercised.
6. No Rights as Stockholder. Until this Option is properly
exercised in whole or in part in accordance with the terms of Section 5 hereof,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock. No adjustment shall be made for a
dividend or other right for which the record date is prior to the date this
Option is exercised, except as provided in Section 10 hereof.
7. Delivery of Share Certificates. As soon as practicable after
any proper exercise of this Option, the Company shall, without transfer or issue
tax to the Optionee, deliver to the Optionee at the principal executive office
of the Company or such other place as shall be mutually agreed upon between the
Company and the Optionee, a certificate or certificates representing the Shares
for which this Option shall have been exercised. The time of issuance and
delivery of the certificate(s) representing the Shares for which this Option
shall have been exercised may be postponed by the Company for such period as may
be required by the Company, with reasonable diligence, to comply with any
applicable listing requirements of any national or regional securities exchange
or any law or regulation applicable to the issuance or delivery of such Shares.
8. Termination of Option. 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 3 hereof.
9. 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, and may be exercised during the
lifetime of the Optionee only by the Optionee. Subject to the foregoing, the
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
10. Adjustment Upon Changes in Capitalization.
(a) Subject to any required action by the stockholders of
the Company, the number of Shares covered by this Option, as well as the
exercise price per Share of the Shares covered by this Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split or combination or the
payment of a stock dividend (but only on 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 (other than stock bonuses to
employees or directors); provided, however, that the conversion of any
convertible securities of the
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Company shall not be deemed to have been effected without the 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 issuances 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 subject to this Option.
(b) In the event of the proposed dissolution or
liquidation of the Company, or in the event of a proposed sale of all or
substantially all of the assets of the Company (other than in the ordinary
course of business), or the merger or consolidation of the Company with or
into another corporation as a result of which the Company is not the surviving
and controlling corporation, the Board shall (i) make provision for the
assumption of this Option by the successor corporation or (ii) declare that
this Option shall terminate as of a date fixed by the Board which is at least
30 days after the notice thereof to the Optionee and shall give the Optionee
the right to exercise this Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable,
provided such exercise does not violate Section 5 hereof.
(c) No fractional shares of Common Stock shall be
issuable on account of any action aforesaid, and the aggregate number of
shares into which Shares then covered by this Option, when changed as the
result of such action, shall be reduced shall be the largest number of whole
shares resulting from such action, unless the Board, in its sole
discretion, shall determine to issue scrip certificates in respect to any
fractional shares, which scrip certificates, in such event, shall be in a
form and have such terms and conditions as the Board in its discretion shall
prescribe.
11. Reservation of Shares. The Company covenants and agrees that
during the term of this Option the Company will at all times have authorized and
reserved for the purpose of the issue upon exercise of this Option at least the
maximum number of shares of Common Stock issuable upon the exercise of this
Option.
12. Continuation of Employment. This Option shall not confer upon
the Optionee any right to be employed by or continue in the employment of the
Company or any of its Subsidiaries.
13. Withholding. 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 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.
14. Common Stock Subject to Registration Rights. All Eligible
Common Stock will cease to be Eligible Common Stock when (i) a Registration
Statement covering such Eligible Common Stock has been declared effective by
the SEC and such Eligible Common Stock has been
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disposed of pursuant to such effective Registration Statement, (ii) it is
distributed to the public pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act or (iii) it has otherwise been
transferred and it may be resold by such transferee without subsequent
registration under the Securities Act and without restriction under Rule 144.
15. Registration Rights.
(a) At any time after the Optionee shall have exercised
his right to acquire Optioned Stock as provided in Section 5 and up until
and including the Termination Date, the Optionee shall have the right to
make written requests (each a "Demand") on the Company to cause the Company to
use its best reasonable efforts to effect the filing of a Registration
Statement with respect to the Eligible Common Stock. Each Demand shall
set forth the number of shares of Eligible Common Stock proposed to be sold by
the Optionee.
(b) At any time on or after the first anniversary of the
Grant Date up until and including the Termination Date, if the Company shall
have filed a Registration Statement covering any of its Common Stock, and
such Registration Statement shall be effective under the Securities Act,
the Company shall use its best reasonable efforts to effect the registration
of the Eligible Common Stock by including such Eligible Common Stock in such
Registration Statement.
(c) Notwithstanding the foregoing, the Corporation at its
own initiative may cause a Registration Statement on Form S-8 to be filed
with the SEC with respect to the Optioned Stock.
16. Registration Procedures. In connection with the Company's
registration obligations pursuant to Section 15 hereof, the Company will use its
best reasonable efforts to effect the registration of the Eligible Common Stock
in accordance with the intended method or methods or distribution thereof, and
pursuant thereto to the Company shall:
(a) prepare and file with SEC, as soon as practicable
after receipt of a Demand, a Registration Statement relating to the Eligible
Common Stock with respect to which a Demand has been received in accordance
with the intended method or methods of distribution thereof and shall include
all financial statements and other information required by the SEC to be
filed therewith, and use its best reasonable efforts to cause such Registration
Statement to become effective;
(b) prepare and file with the SEC such amendments to the
Registration Statement as may be necessary to keep the Registration
Statement effective until the distribution of the Eligible Common Stock under
the Registration Statement is complete; cause the Prospectus to be
supplemented by any required prospectus supplement; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement;
(c) notify the Optionee promptly (i) when the
Registration Statement has become effective and when any post-effective
amendment or supplement thereto becomes effective and (ii) of the issuance by
the SEC of any stop order suspending the effectiveness of the Registration
Statement; (iii) of the receipt by the Company of any notification with respect
to the suspension of
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the qualification of the Eligible Common Stock for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose and (iv) of the happening of any event which makes any statement made in
the Registration Statement untrue or which requires the making of any changes in
the Registration Statement or the Prospectus or any document incorporated
therein by reference to make the statements therein not misleading;
(d) make reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement at the
earliest possible time:
(e) deliver to the Optionee as many copies of the
Prospectus and any amendment or supplement thereto as the Optionee may
reasonably request; the Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Optionee in connection with the
offering and sale of the Eligible Common Stock covered by the Prospectus or any
amendment or supplement thereto;
(f) prior to any public offering of Eligible Common
Stock, make reasonable efforts to register or qualify or cooperate with the
Optionee, in connection with the registration or qualification of such
Eligible Common Stock for offer and sale under the securities or blue sky laws
of such jurisdictions as the Optionee reasonably requests in writing and do
any and all other acts or things necessary or advisable to enable the
Optionee to consummate the disposition in such jurisdictions of the
Eligible Common Stock covered by the Registration Statement; provided
that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified; (ii) subject
itself to taxation in any such jurisdiction; or (iii) take any action which
would subject it to general service of process in any such jurisdiction
where it is not then so subject;
(g) cooperate with the Optionee and the managing
underwriters, to facilitate the timely preparation and delivery of certificates
representing the Eligible Common Stock to be sold and not bearing any
restrictive legends; and enable such Eligible Common Stock to be in such
denominations and registered in such names as the Optionee may request at least
two business days prior to any sale of the Eligible Common Stock;
(h) as promptly as practicable following the occurrence
of any event contemplated by Section 16(c)(iv) hereof, make reasonable efforts
to prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Eligible Common Stock, the Prospectus will
not contain an untrue statement or a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and
(i) make reasonable efforts to cause all the Eligible
Common Stock covered by the Registration Statement to be listed on each
securities exchange or automated quotation system, if any, on which similar
securities issued by the Company are then listed if requested by the Optionee.
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The Company may require the Optionee to furnish to the Company such information
regarding the distribution of the Eligible Common Stock as the Company may from
time to time reasonably request in writing.
The Optionee agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 16(c)(iv) hereof, the
Optionee will forthwith discontinue the offering and disposition of Eligible
Common Stock until the Optionee's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 16(h) hereof, or until it is advised
in writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the Prospectus, and, if so directed by the
Company, the Optionee will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in the Optionee's possession, of
the Prospectus covering such Eligible Common Stock current at the time of
receipt of such notice.
17. Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement, including SEC registration and
filing fees, fees and expenses of compliance with state securities, or blue sky,
laws and the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed in connection with the Demand
Registration will be borne by the Company.
18. Action by the Company. The existence of this Option shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding.
19. Interpretation. As a condition to the granting of this Option,
the Optionee and each person who succeeds to the Optionee's rights hereunder,
agrees that any dispute or disagreement which shall arise under or as a result
of or pursuant to this Option shall be determined by the Board in its good faith
sole discretion, and that any such determination or interpretation of the terms
of this Option by the Board shall be final, binding and conclusive.
20. Notices. Any notice to be given to the Company pursuant to
this Option shall be addressed to the Company in care of its Corporate Secretary
(or such other person as the Company may designate from time to time) at its
principal office, and any notice to be given to the Optionee shall be delivered
personally or addressed to him at the address given beneath his signature set
forth below, or at such other address as the Optionee may hereafter designate in
writing to the Company. Any such notice shall be deemed duly given when enclosed
in a properly sealed envelope or wrapper addressed as aforesaid, registered or
certified, and deposited, postage and registry or certification fee prepaid, in
a post office or branch post office regularly maintained by the United States
Postal Service.
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21. Invalid Provisions. In the event that any provision of this
Option is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained therein as invalid or unenforceable, and all such
other provisions shall be given full force and effect to the same extent as
though the invalid or unenforceable provision were not contained herein.
22. Governing Law. This Option shall be governed by and construed
in accordance with the laws of the State of Delaware.
This Agreement is dated as of December 18, 1995.
Government Technology Services, Inc. ▇. ▇▇▇▇▇ ▇▇▇▇▇
By: /s/ Worth ▇. ▇▇▇▇▇▇▇▇▇ Signature: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇
Name: Worth ▇. ▇▇▇▇▇▇▇▇▇ Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------- ------------------
Title: General Counsel ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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[Government Technology Services, Inc. Logo]
GOVERNMENT TECHNOLOGY SERVICES, INC.
NOTICE OF EXERCISE OF STOCK OPTION
(Please print legibly or type)
I, ▇. ▇▇▇▇▇ ▇▇▇▇▇ ("Optionee"), hereby agree, represent and warrant to
Government Technology Services, Inc. (the "Company") as follows:
1. On December 18, 1995, I was granted a Stock Option (the "Option")
pursuant to an Employment Agreement between myself and the Company dated
December 18, 1995 (the "Employment Agreement").
2. Pursuant to the Option, I was granted the right to purchase 700,000
shares of the Company's Common Stock, subject to adjustment in accordance with
the Employment Agreement (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 $3.75 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 cash or check or by tender of shares
of Common Stock as set forth in the Option.
6. In connection with my exercise of the Option, I have reviewed a copy
of the Company's Registration Statement on Form S-8 relating to the Common Stock
issuable pursuant to the Option.
Dated: ______________________ _______________________________
Signature of Optionee
______________________________ _______________________________
Social Security Number Address
_______________________________
City, State, Zip
Received on behalf of Government Technology Services, Inc. on _________________.
Signature: _______________________
Print Name: ______________________