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EXHIBIT 10.29
VITAL IMAGES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
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OPTIONEE: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ DATE: December 28, 1999
NUMBER OF OPTION SHARES: 175,000 Shares
OPTION PRICE PER SHARE: $3.5625 per Share
EXPIRATION DATE: December 28, 2009
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THIS AGREEMENT is made as of the Grant Date set forth above,
by and between Vital Images, Inc., a Minnesota corporation (the "Company"), and
the Optionee named above, who is an employee of the Company or a subsidiary of
the Company (the "Optionee").
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the parties
hereby agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the right
and option to purchase all or any part of the aggregate number of shares of
Common Stock, par value $.01 per share ("Common Stock") set forth above (the
"Option Shares") (such number being subject to adjustment as provided in
paragraph 8 hereof) on the terms and subject to the conditions set forth in this
Agreement. THIS OPTION IS NOT INTENDED TO BE AN "INCENTIVE STOCK OPTION" WITHIN
THE MEANING OF SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND IS BEING GRANTED OUTSIDE OF THE COMPANY'S 1997 STOCK OPTION AND
INCENTIVE PLAN (THE "PLAN").
2. PURCHASE PRICE. The purchase price of the Option Shares shall be the
Option Price per share set forth above (such Option Price being subject to
adjustment as provided in paragraph 8 hereof).
3. TERM AND EXERCISE OF OPTION.
(a) The term of this option shall commence on the Grant Date
set forth above and shall continue until the Expiration Date set forth above,
unless earlier terminated as provided herein.
(b) Unless the Compensation Committee of the Board of
Directors of the Company shall decide otherwise, and except as otherwise
provided herein, this option will be exercisable in cumulative installments as
follows:
(i) None of the Option Shares may be purchased prior
to December 28, 2000;
(ii) Up to 28% of the Option Shares may be purchased
at any time after December 27, 2000 and prior to termination of this
option; and
(iii) This option shall become exercisable as to an
additional 2% of the Option Shares (less any shares previously
purchased pursuant to this option) on the last day of each successive
calendar month following the date set forth in paragraph 2(b)(ii) above
and prior to termination of this option;
(c) To exercise this option, the Optionee shall give written
notice to the Company in the form attached as Exhibit A, to the attention of its
Chief Financial Officer or other designated agent, and shall deliver payment in
full for the Option Shares with respect to which this option is then being
exercised, as provided in paragraph 4(b) below.
(d) Neither the Optionee nor the Optionee's heirs or legal
representatives, as the case may be, will be, or will be deemed to be, a holder
of any Option Shares for any purpose unless and until certificates for such
Option Shares are issued to the Optionee or the Optionee's heirs or legal
representatives under the terms of the Option Plan.
4. LIMITATIONS ON EXERCISE OF OPTION.
(a) Except as provided in paragraph 6 or 7 below, this option
may not be exercised unless the Optionee, at all times during the period
beginning on the Grant Date and ending on the day three months before the date
of such exercise, shall have been continuously employed by the Company or a
subsidiary of the Company.
(b) The exercise of this option will be contingent upon
receipt from the Optionee (or the purchaser acting under paragraph 7 below) of
the full Option Price of such Option Shares. Payment of the Option Price may be
made in cash, check, bank draft, money order, in shares of Common Stock,
including shares issuable upon exercise of this option, having an aggregate fair
market value on the date of exercise which is not less than the Option Price, by
tender of a broker exercise notice, or by a combination of such methods.
(c) The issuance of Option Shares upon the exercise of this
option shall be subject to all applicable laws, rules, and regulations. If, in
the opinion of the Compensation Committee, (i) the listing, registration, or
qualification of the Option Shares under any state or federal law, (ii) the
consent or approval of any regulatory body, or (iii) an agreement of the
Optionee with respect to the disposition of the Option Shares, is necessary or
desirable as a condition to the issuance or sale of the Option Shares, this
option shall not be exercisable unless
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and until such listing, registration, qualification, consent, approval or
agreement is effected or obtained in form satisfactory to the Compensation
Committee.
5. NONTRANSFERABILITY OF OPTION. This option shall not be transferable
by the Optionee, other than by will or the laws of descent and distribution.
During the lifetime of the Optionee, this option shall be exercisable only by
the Optionee.
6. TERMINATION OF EMPLOYMENT.
(a) If the Optionee shall cease to be employed by the Company
or a subsidiary of the Company as a result of permanent and total disability (as
defined by the Code), this option will become immediately exercisable in full on
the date of termination of employment and may be exercised within a period of
one year after such termination of employment, but in no case later than the
Expiration Date set forth above.
(b) If the Optionee shall cease to be employed by the Company
or a subsidiary of the Company as a result the Optionee's Retirement (as defined
by the Plan), this option will become immediately exercisable in full on the
date of termination of employment and may be exercised for a period of three
months after such termination of employment, but in no case later than the
Expiration Date.
(c) If the Optionee shall cease to be employed by the Company
or a subsidiary of the Company for any reason other than death, permanent and
total disability or retirement, this option may be exercised, to the extent the
Optionee shall have been entitled to do so at the date of termination of
employment, within a period of three months after such termination of
employment, but in no case later than the Expiration Date set forth above;
provided, however, that if Optionee's employment is terminated by the Company
for "cause" (as defined in the Employment Agreement between the Optionee and the
Company dated December 27, 1999), this option shall immediately terminate and
will not thereafter be exercisable.
(d) This option will not confer upon the Optionee any right
with respect to continuance of employment by the Company or a subsidiary of the
Company, nor will it interfere in any way with the Company's right or the
subsidiary's right to terminate the Optionee's employment at any time.
7. DEATH OF OPTIONEE. In the event of the death of the Optionee while
in the employ of the Company or a subsidiary of the Company, this option will
become exercisable in full at the date of death and may be exercised within a
period of one year after the date of death, but in no case later than the
Expiration Date set forth above. In such event, this option shall be exercisable
only by the executors or administrators of the Optionee or by the person or
persons to whom the Optionee's rights under the option shall pass by the
Optionee's Will or the laws of descent and distribution.
8. MERGER, CONSOLIDATION, REORGANIZATION, LIQUIDATION; ADJUSTMENTS.
Subject to the other provisions of this option, in the event of any change in
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the outstanding shares of Common Stock by reason of any reorganization, merger,
consolidation, liquidation, stock dividend or split, recapitalization,
reclassification, combination, or exchange of shares or other similar corporate
change, then if the Compensation Committee shall determine, in its sole
discretion, that such change necessarily or equitably requires an adjustment in
the number of Option Shares or in the Option Price Per Share in order to prevent
enlargement or dilution of the rights of the Optionee, such adjustments shall be
made by the Committee and shall be conclusive and binding for all purposes of
this option. No adjustment shall be made in connection with the issuance by the
Company of any warrants, rights, or options to acquire additional Common Stock
or of securities convertible into Common Stock.
9. IMMEDIATE ACCELERATION OF OPTION. Notwithstanding any provision in
this option to the contrary, this option will become exercisable in full
immediately if, subsequent to the Grant Date set forth above, any of the
following events shall occur:
(a) The sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a person or entity that
is not controlled by the Company,
(b) The approval by the shareholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company;
(c) A merger or consolidation to which the Company is a party
if the shareholders of the Company immediately prior to effective date of such
merger or consolidation have "beneficial ownership" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), immediately following the effective
date of such merger or consolidation, of securities of the surviving corporation
representing (A) more than 50%, but not more than 80%, of the combined voting
power of the surviving corporation's then outstanding securities ordinarily
having the right to vote at elections of directors, unless such merger or
consolidation has been approved in advance by the Incumbent Directors (as
defined below), or (B) 50% or less of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right to vote at
elections of directors (regardless of any approval by the Incumbent Directors);
(d) Any person becomes after the effective date of the Plan
the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934), directly or indirectly, of (A) 20% or more, but not 50% or more,
of the combined voting power of the Company's outstanding securities ordinarily
having the right to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by the Incumbent
Directors, or (B) 50% or more of the combined voting power of the Company's
outstanding securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the Incumbent Directors);
(e) The Incumbent Directors cease for any reason to constitute
at least a majority of the Board; or
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(f) Any other change in control of the Company of a nature
that would be required to be reported pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, whether or not the Company is then subject to
such reporting requirements.
For purposes of this paragraph 9, "Incumbent Directors" of the
Company will mean any individuals who are members of the Board on the effective
date of this Agreement and any individual who subsequently becomes a member of
the Board whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Incumbent
Directors (either by specific vote or by approval of the Company's proxy
statement in which such individual is named as a nominee for director without
objection to such nomination).
The Compensation Committee may, in its sole discretion,
determine that the Optionee shall receive, with respect to some or all of the
Option Shares, cash in an amount equal to the excess of the fair market value of
such Option Shares immediately prior to the effective date of such Change in
Control over the Exercise Price.
Notwithstanding anything in this option to the contrary, if
any of the payments or benefits to be made or provided in connection with this
option, together with any other payments, benefits or awards which you have the
right to receive from the Company, or any corporation which is a member of an
"affiliated group" (as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a member ("Affiliate"),
constitute an "excess parachute payment" as defined in Section 280G(b) of the
Code, two calculations will be performed. In the first calculation, the
payments, benefits or awards shall be reduced by the amount the Company deems
necessary so that none of the payments, benefits or awards (including in
connection with this option) are excess parachute payments. In the second
calculation, the payments shall not be reduced so as to eliminate an excess
parachute payment, but shall be reduced by the amount of the applicable excise
tax as imposed by Section 4999 of the Code. The two calculations will be
compared and the calculation providing the largest net payments to the employee
will be utilized. The calculations must be made in good faith by legal counsel
or a certified public accountant selected by the Company, and such determination
will be conclusive and binding upon you and the Company.
Neither the Board of Directors nor the Compensation Committee
shall have the power or right, either before or after the occurrence of an event
described in subparagraph (a) through (f) above, to rescind, modify or amend the
provisions of this paragraph 9 without the consent of the Optionee.
10. INTERPRETATION. The interpretation and construction of any
provision of this option shall be made by the Compensation Committee and shall
be final, conclusive and binding on the Optionee and all other persons.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its corporate name by its duly authorized officer, and the Optionee
has executed this Agreement as of the Grant Date set forth above.
COMPANY: VITAL IMAGES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
OPTIONEE:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
MPL1: 332240-1
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EXHIBIT A
NOTICE OF EXERCISE OF
STOCK OPTION
TO:
FROM:
DATE:
RE: Exercise of Stock Option
I here by exercise my option to purchase _________ shares of Common
Stock at $___________ per share (total exercise price of $_________ ), effective
today's date. This notice is given in accordance with the terms of my Stock
Option Agreement dated _________ , 19__. The option price and vested amount is
in accordance with Sections 2 and 3 of the Stock Option Agreement.
CHECK ONE:
Attached is cash, or a check, bank draft or money order payable to
Vital Images, Inc. for the total exercise price of the shares being
purchased.
Attached is a certificate(s) for shares of common stock duly endorsed
in blank and surrendered for the exercise price of the shares being
purchased.
I wish to exercise my option by surrendering a sufficient number of
shares of Common Stock issuable upon exercise of such option to pay the
exercise price.
Attached is a broker exercise notice, together with a check made
payable to Vital Images, Inc. and instructions as to delivery of the
shares.
Please prepare the stock certificate in the following name(s):
Sincerely,
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(Signature)
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(Print or Type Name)
Letter and consideration
received on ____________, 19__
By:
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Name:
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Title:
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