EXHIBIT 10.4
U.S. LEGAL SUPPORT, INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement ("Option Agreement") is between
U.S. Legal Support, Inc. (the "Company"), and ___________________________
("Optionee"), who agree as follows:
Section 1. Introduction. The Company has heretofore adopted the U.S. Legal
Support, Inc. Non-Employee Directors Stock Option Plan (the "Plan") for the
purpose of providing increased incentive for non-employee directors to render
services and to exert maximum effort for the business success of the Company and
providing such non-employee directors an opportunity for ownership of common
stock, $.01 par value ("Common Stock") of the Company. The Company, acting
through its Board of Directors (the "Board"), has determined that its interests
will be advanced by the issuance to Optionee of a nonqualified stock option
under the Plan.
Section 2. Option. Subject to the terms and conditions contained herein,
the Company hereby irrevocably grants to Optionee the right and option
("Option") to purchase from the Company 25,000 shares of Common Stock, at a
price of $______ per share.
Section 3. Option Period. The Option herein granted may be exercised by
Optionee in whole or in part at any time during a ten year period (the "Option
Period") beginning on _______________ (the "Date of Grant"), subject to the
limitation that said Option shall not be exercisable for more than a percentage
of the aggregate number of shares offered by this Option determined by the
number of years of service Optionee has served on the Board as a non-employee
director to the date of exercise, in accordance with the following schedule:
Schedule of Vesting
-------------------
Number of Full Years Percentage of Shares Purchasable
-------------------- --------------------------------
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
Notwithstanding the above, the Option shall be not exercisable prior to six (6)
months after the Date of Grant.
Section 4. Procedure for Exercise. The Option herein granted may be
exercised by the delivery by Optionee of written notice to the Secretary of the
Company setting forth the number of shares of Common Stock with respect to which
the Option is being exercised. The notice shall be
accompanied by, at the election of the Optionee, (i) cash, cashier's check, bank
draft, or postal or express money order payable to the order of the Company,
(ii) certificates representing shares of Common Stock theretofore owned by
Optionee duly endorsed for transfer to the Company, (iii) an election by
Optionee to have the Company withhold the number of shares of Common Stock the
fair market value of which is equal to the aggregate exercise price of the
shares of Common Stock issuable upon exercise of the Option, or (iv) any
combination of the preceding, equal in value to the aggregate exercise price.
Notice may also be delivered by telecopy provided that the exercise price of
such shares is received by the Company via wire transfer on the same day the
telecopy transmission is received by the Company. The notice shall specify the
address to which the certificates for such shares are to be mailed. An option
to purchase shares of Common Stock in accordance with this Plan, shall be deemed
to have been exercised immediately prior to the close of business on the date
(i) written notice of such exercise and (ii) payment in full of the exercise
price for the number of share for which Options are being exercised, are both
received by the Company and Optionee shall be treated for all purposes as the
record holder of such shares of Common Stock as of such date.
As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to Optionee certificates for the number of
shares with respect to which such Option has been so exercised, issued in
Optionee's name or such other name as Optionee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail, addressed to Optionee at the address specified pursuant to this Section 4.
Section 5. Termination of Service. If Optionee ceases to serve on the Board
for any reason other than death, disability or an involuntarily "for cause"
termination, the rights under this Option which are not vested and exercisable
shall terminate upon Optionee's cessation of service on the Board and the rights
under such option which are vested and exercisable shall terminate upon the
expiration date of the Option. If Optionee's service on the Board is
involuntarily terminated by the Company "for cause", rights under the Option,
whether vested or not, shall terminate immediately upon such cessation of
service. Optionee's service on the Board is involuntarily terminated "for cause"
if Optionee (i) divulges without the consent of the Company any secret or
confidential information belonging to the Company or an Affiliate, (ii) has been
dishonest or fraudulent in any manner affecting the Company or an Affiliate, or
(iii) has committed any act that, in the sole judgment of the Committee, has
been substantially detrimental to the interest of the Company or an Affiliate.
Section 6. Disability or Death. In the event Optionee dies or is determined
to be disabled while Optionee serves on the Board, all options previously
granted to Optionee, whether vested or not, may be exercised at any time and
from time to time, after such death or determination of disability, by Optionee,
Optionee's authorized legal representative, the guardian of Optionee's estate,
the executor or administrator of Optionee's estate or by the person or persons
to whom Optionee's rights under the option shall pass by will or the laws of
descent and distribution, but in no event may the Option be exercised after its
expiration under the terms of this Option Agreement. Optionee shall be deemed to
be disabled if, in the opinion of a physician selected by the Committee,
Optionee is
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incapable of performing services for the Company of the kind Optionee was
performing at the time the disability occurred by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to be of long, continued and indefinite duration. The date of
determination of disability for purposes hereof shall be the date of such
determination by such physician.
Section 7. Transferability. This Option shall not be transferable by
Optionee otherwise than by Optionee's will or by the laws of descent and
distribution. During the lifetime of Optionee, the Option shall be exercisable
only by Optionee or his authorized legal representative. Any heir or legatee of
Optionee shall take rights herein granted subject to the terms and conditions
hereof. No such transfer of this Option Agreement to heirs or legatees of
Optionee shall be effective to bind the Company unless the Company shall have
been furnished with written notice thereof and a copy of such evidence as the
Board may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions hereof.
Section 8. No Rights as Shareholder. Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock covered by this Option
Agreement until the Option is exercised by written notice and accompanied by
payment as provided in Section 4 of this Option Agreement.
Section 9. Extraordinary Corporate Transactions. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its shareholders 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
issuance of Common Stock or subscription rights thereto, or any issuance of
bonds, debentures, preferred or prior preference stock 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 proceedings, whether of a similar character or
otherwise. If the Company goes through a "Fundamental Change" (as defined in
subparagraph 6(i) of the Plan), the Options granted hereunder shall be governed
by subparagraph 6(i) of the Plan. If the Company undergoes a "Corporate Change"
(as defined in subparagraph 6(l) of the Plan), the Options granted hereunder
shall be governed by subparagraph 6(l) of the Plan.
Section 10. Changes in Capital Structure. If the outstanding shares of
Common Stock or other securities of the Company, or both, for which the Option
is then exercisable shall at any time be changed or exchanged by declaration of
a stock dividend, stock split, combination of shares, or recapitalization, the
number and kind of shares of Common Stock or other securities subject to the
Plan or subject to the Option and the exercise price, shall be appropriately and
equitably adjusted so as to maintain the proportionate number of shares or other
securities without changing the aggregate exercise price.
Section 11. Compliance With Laws. Notwithstanding any of the other
provisions hereof, Optionee agrees that he or she will not exercise the Option
granted hereby, and that the Company will not be obligated to issue any shares
pursuant to this Option Agreement, if the exercise of the
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Option or the issuance of such shares of Common Stock would constitute a
violation by Optionee or by the Company of any provision of any law or
regulation of any governmental authority.
Section 12. Withholding of Tax. To the extent that the exercise of this
Option or the disposition of shares of Common Stock acquired by exercise of this
Option results in compensation income to Optionee for federal or state income
tax purposes, payment of the withholding tax shall be made in accordance with
Section 10 of the Plan.
Section 13. No Right to Directorship. Optionee shall be considered to be in
service on the Board so long as he or she remains a director of the Company. Any
questions as to whether and when there has been a termination of such service on
the Board and the cause of such termination shall be determined by the Board,
and its determination shall be final. Nothing contained herein shall be
construed as conferring upon Optionee the right to continue service on the
Board.
Section 14. Resolution of Disputes. As a condition of the granting of the
Option hereby, Optionee, and Optionee's heirs, personal representatives and
successors agree that any dispute or disagreement which may arise hereunder
shall be determined by the Board in its sole discretion and judgment, and that
any such determination and any interpretation by the Board of the terms of this
Option Agreement shall be final and shall be binding and conclusive, for all
purposes, upon the Company, Optionee, and Optionee's heirs, personal
representatives and successors.
Section 15. Legends on Certificate. The certificates representing the
shares of Common Stock purchased by exercise of the Option will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel may
require with respect to any applicable restrictions on sale or transfer and the
stock transfer records of the Company will reflect stop-transfer instructions
with respect to such shares.
Section 16. Notices. Every notice hereunder shall be in writing and
shall be given by registered or certified mail. All notices of the exercise
of any Option hereunder shall be directed to U.S. Legal Support, Inc.,
________________________________________________, Attention: Secretary. Any
notice given by the Company to Optionee directed to Optionee at the address on
file with the Company shall be effective to bind Optionee and any other person
who shall acquire rights hereunder. The Company shall be under no obligation
whatsoever to advise Optionee of the existence, maturity or termination of any
of Optionee's rights hereunder and Optionee shall be deemed to have familiarized
himself or herself with all matters contained herein and in the Plan which may
affect any of Optionee's rights or privileges hereunder.
Section 17. Construction and Interpretation. Whenever the term "Optionee"
is used herein under circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of Section 7 hereof, may be
transferred, the word "Optionee" shall be deemed to include such person or
persons.
Section 18. Agreement Subject to Plan. This Option Agreement is subject to
the Plan. The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby
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incorporated herein by reference thereto. In the event of a conflict between any
term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail. All
definitions of words and terms contained in the Plan shall be applicable to this
Option Agreement.
Section 19. Binding Effect. This Option Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Optionee as provided herein.
IN WITNESS WHEREOF, this Nonqualified Stock Option Agreement has been
executed as of the ____ day of ___________, 19____.
U.S. LEGAL SUPPORT, INC.
By:_________________________________
Name: ______________________________
Title: _____________________________
OPTIONEE
____________________________________
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