EXHIBIT 4.4
FORM OF
STOCK OPTION AGREEMENT
DDI CORP.
December 19, 2003
Re: DDi Corp. Grant of Stock Option
DDi Corp. (the "Company") is pleased to advise you that, pursuant to
the Company's 2003 Directors Equity Incentive Plan (the "Plan"), the Company's
Board of Directors has granted to the option (the "Stock Option") to acquire
shares the Company's common stock, par value $.001 per share (the "Common
Stock"), as set forth below (the "Option Shares"), subject to the terms and
conditions set forth herein: Stock Option is not intended to be an "incentive
stock option" within the meaning of Section 422 of the Code.
Certain capitalized terms used herein are defined in paragraph 10
below.
1. Grant of Stock Option.
(a) Grant. Subject to the terms and conditions set forth herein, the
Company hereby grants to you (or such other persons as permitted by paragraph 7)
a Stock Option to purchase 100,000 Option Shares.
(b) Exercise Price. The exercise price for the Stock Option shall be
$5.00 per Option Share (subject to adjustment as set forth herein).
(c) Vesting. The Stock Option granted hereunder may be exercised only
to the extent it has become vested. The Stock Option shall vest in an increment
of 40% on the date hereof and in three successive increments of 20% on each
twelve-month anniversary hereof.
(d) Expiration Date. In no event shall any part of the Stock Option be
exercisable after December 19, 2013 (the "Expiration Date"), subject to earlier
expiration as provided in paragraph 3 below should you cease to be a director of
the Company.
2. Payment of Option Price.
The Stock Option, to the extent that the vesting conditions applicable to
such Stock Option as described above have been satisfied, may be exercised in
whole or in part upon payment of an amount (the "Option Price") equal to the
product of (i) the applicable exercise price and (ii) the number of Option
Shares to be acquired thereunder. Payment of the Option Price shall be made by
one or more of the following means:
(a) in cash (including check, bank draft, money order or wire transfer
of immediately available funds);
(b) by simultaneous sale through a broker reasonably acceptable to the
Committee of Option Shares acquired on exercise, as permitted under Regulation T
of the Federal Reserve Board;
(c) by any combination of the foregoing.
3. Additional Vesting and Expiration Terms. Notwithstanding anything
contained herein to the contrary, the following special vesting and expiration
rules shall apply if you no longer serve as a director of the Company (i) prior
to the Option becoming fully vested and exercisable and/or (ii) prior to the
applicable expiration date:
(a) Death or Disability. If you die or become subject to a Disability
while a director of the Company, then (i) all of the Stock Option, to the extent
then vested and exercisable, shall remain exercisable by you, your executor or
administrator or the person or persons to whom the Stock Option is transferred
by will or the applicable law of descent and distribution (or such other persons
as permitted by paragraph 7) for a one year period from the date of your death
or Disability but in no event after any applicable expiration date and (ii) all
of the Stock Option to the extent not already fully vested and exercisable will
be forfeited.
(b) Discharge for Cause. If you cease to be a director of the Company
due to Cause, all of your Stock Option shall expire and be forfeited immediately
upon such cessation, whether or not then exercisable.
(c) Other Termination. Unless otherwise determined by the Board, if
you cease to be a director of the Company for any reason other than death,
Disability or Cause, (i) all of your Stock Option, to the extent vested and
exercisable on the date of such cessation, shall remain exercisable for, and
shall otherwise terminate at the end of, a period of 90 days after the date of
such cessation, but in no event after the expiration date of the Stock Option;
provided that you do not engage in Competition during such 90-day period unless
you receive written consent to do so from the Board, and (ii) all of your Stock
Option, to the extent not vested and exercisable on the date of such cessation,
shall be forfeited immediately upon such cessation.
4. Change in Control.
(a) Upon any Change of Control effected solely for cash consideration,
(i) all of your Stock Option shall immediately become fully vested and
exercisable and all deferrals, other than deferrals of amounts that are neither
measured by reference to nor payable in shares of Common Stock, shall be
accelerated, immediately prior to the Change of Control and (ii) upon
consummation of such Change of Control your Stock Option, if then outstanding
and requiring exercise, shall be forfeited unless assumed by an acquiring or
surviving entity or its affiliate as provided in the following sentence.
(b) Upon any Change of Control where the consideration is a
combination of cash and securities, (x) the percentage amount of your unvested
Stock Option that shall become immediately vested and exercisable shall be equal
to the percentage amount that cash consideration represents to the total
consideration used in connection with such Change of
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Control and (y) the percentage amount of your unvested Stock Option that shall
be converted into unvested Stock Options of the surviving entity resulting from
such Change of Control shall be equal to the percentage amount that securities
used as consideration represent to the total consideration used in connection
with such Change of Control.
(c) Upon any Change of Control where cash is not used as any form of
consideration, all your unvested Stock Option shall be converted into unvested
Stock Options of the surviving entity resulting from such Change of Control.
(d) If, following a Change of Control, you are removed as a director
of the Company within one year after such Change in Control, all of your Stock
Option shall become fully vested and exercisable upon such removal and shall
remain so for up to one year after the date of removal, but in no event after
the expiration date of the Stock Option. In addition, the Board shall have the
authority to grant options that become fully vested and exercisable
automatically upon a Change in Control, whether or not you are subsequently
removed as a director of the Company.
5. Procedure for Exercise. You may exercise all or any portion of the
Stock Option, to the extent it has vested and is exercisable and outstanding, at
any time and from time to time prior to the applicable expiration date, by
delivering written notice to the Company in the manner specified by the Company
from time to time, together with payment of the Option Price in accordance with
the provisions of paragraph 2 above. The Stock Option may not be exercised for a
fraction of an Option Share.
6. Withholding of Taxes.
(a) Participant Election. Unless otherwise determined by the
Committee, you may elect to deliver shares of Common Stock (or have the Company
withhold Option Shares acquired upon exercise of the Option) to satisfy, in
whole or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of the Option. Such election must be made on or
before the date the amount of tax to be withheld is determined. Once made, the
election shall be irrevocable. The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined.
(b) Company Requirement. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to you, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to the delivery of Option Shares under this Agreement.
7. Transferability of Option. Unless the Committee determines
otherwise, you may transfer the Option granted hereunder only by will or the
laws of descent and distribution or to any of your Family Members by gift or a
qualified domestic relations order as defined by the Code. Unless the context
requires otherwise, references herein to you are deemed to include any permitted
transferee under this paragraph 7. Unless the Committee determines otherwise,
the Option may be exercised only by you; by your Family Member if such person
has acquired the Option by gift or qualified domestic relations order; by the
executor or administrator
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of the estate of any of the foregoing or any person to whom the Option is
transferred by will or the laws of descent and distribution; or by the guardian
or representative of any of the foregoing.
8. Conformity with Plan. The Stock Option is intended to conform in
all respects with, and is subject to all applicable provisions of, the Plan
(which is incorporated herein by reference). Inconsistencies between this
Agreement and the Plan shall be resolved in accordance with the terms of the
Plan. By executing and returning the enclosed copy of this Agreement, you
acknowledge your receipt of this Agreement and the Plan and agree to be bound by
all of the terms of this Agreement and the Plan.
9. Rights of Participants. Nothing in this Agreement shall confer upon
you any right to continue as a director of the Company for any period of time,
or to continue your present (or any other) rate of compensation or level of
responsibility. Nothing in this Agreement shall confer upon you any right to be
selected again as a Plan participant, and nothing in the Plan or this Agreement
shall provide for any adjustment to the number of Option Shares subject to the
Option upon the occurrence of subsequent events except as provided in paragraph
11 (Adjustments) below.
10. Certain Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Board" means the Board of Directors of the Company.
"Cause" means the occurrence of one or more of the following events:
(i) indictment of conviction of any felony (it being understood
that if you are not convicted of a felony within two (2) years
of indictment (or later if any state or federal agency is
actively prosecuting such felony), such options shall be
reinstated),
(ii) fraud, misappropriation, or embezzlement that, if you were an
employee of the Company or its Subsidiaries, would warrant
termination from the Company or its subsidiaries based upon the
existing policies of the Company and its subsidiaries then in
effect,
(iii) failure or refusal, after reasonable notice, to perform the
material duties of such person's office,
(iv) drug or alcohol abuse that, if you were an employee of the
Company or its Subsidiaries, would warrant termination from the
Company or its subsidiaries based upon the existing policies of
the Company and its subsidiaries then in effect,
(v) any willful misconduct or willful acts that materially impair
the assets of operations of the Company and its subsidiaries,
taken as a whole,
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(vi) acts of discrimination or sexual harassment that, if you were
an employee of the Company or its Subsidiaries, would warrant
termination from the Company or its subsidiaries based upon the
existing policies of the Company and its subsidiaries then in
effect,
(vii) public statements disparaging the Company that are likely to
cause material damage to the Company and its subsidiaries,
taken as a whole.
"Change in Control" means the occurrence of one of the following
events:
(i) any "person" or "group" is or becomes the beneficial owner,
directly or indirectly, of more than 50% of the total voting
power of the voting stock of the Company (for the purposes of
this clause, such person shall be deemed to beneficially own
any voting stock of a person held by any other person (the
"parent entity"), if such person is the beneficial owner,
directly or indirectly, of more than 50% of the voting power of
the voting stock of such parent entity) or such person or group
has the power, directly or indirectly, to elect a majority of
the members of the board of directors of the Company;
(ii) the sale of all or substantially all the assets of the Company
to another person, or, the merger or consolidation of the
Company with or into another person or the merger of another
person with or into the Company, or if the securities of the
Company that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting
power of the voting stock of the Company are changed into or
exchanged for cash, securities, or property, unless pursuant to
such transaction such securities are changed into or exchanged
for, in addition to any other consideration, securities of the
surviving person or transferee that represent, immediately
after such transaction, a majority of the aggregate voting
power of the voting stock of the surviving person or
transferee; or
(iii) the Company is dissolved or liquidated.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of the Board.
"Common Stock" shall mean the Common Stock, par value $.001 per share,
of the Company, and any other shares into which such stock may be changed by
reason of a recapitalization, reorganization, merger, consolidation or any other
change in the corporate structure or capital stock of the Company.
"Company" shall mean DDi Corp., a Delaware corporation, and (except to
the extent the context requires otherwise) any subsidiary corporation of the
Company as such term is defined in Section 424(f) of the Code.
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"Competition" shall be deemed to occur if a person whose employment
with the Company or a Subsidiary has terminated obtains a position as a
full-time or part-time employee of, as a member of the board of directors of, or
as a consultant or advisor with or to, or acquires an ownership interest in
excess of 5% of, a corporation, partnership, firm or other entity that engages
in any of the businesses of the Company or any Subsidiary with which the person
was involved in a management role at any time during his or her last five years
of employment with or other service for the Company or any Subsidiary.
"Disability" shall mean a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise determined by the Committee.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute.
"Family Member" has the meaning given to such term in General
Instruction A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended,
and any successor thereto.
"Grant Date" shall mean the date of this Agreement.
"Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of the Option and (ii) all shares of Common Stock
issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consolidation or recapitalization or other reorganization affecting the Common
Stock.
"Subsidiary" shall mean a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect the
management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.
11. Adjustments.
(a) In the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, distribution of
assets, or any other change in the corporate structure or shares of the Company,
the Committee shall make such adjustment as it deems appropriate in the number
and kind of shares reserved for issuance under the Plan, the number and kind of
shares covered by the Stock Option and the exercise price of outstanding Stock
Option. Any such adjustment shall be final, conclusive and binding for all
purposes of the Plan.
(b) Without limitation of the foregoing, in connection with any
transaction of the type specified by clause (iii) of the definition of a Change
in Control in paragraph 4, the Committee may, in its discretion, (i) cancel any
or all outstanding Option Shares in consideration for payment to you of an
amount equal to the portion of the consideration that would have been
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payable to you pursuant to such transaction if the Stock Option had been fully
exercised immediately prior to such transaction, less the aggregate exercise
price that would have been payable therefor, or (ii) if the amount that would
have been payable to you pursuant to such transaction if the Stock Option had
been fully exercised immediately prior thereto would be less than the aggregate
exercise price that would have been payable therefor, cancel any or all such
Option Shares for no consideration or payment of any kind. Payment of any amount
payable pursuant to the preceding sentence may be made in cash or, in the event
that the consideration to be received in such transaction includes securities or
other property, in cash and/or securities or other property in the Committee's
discretion.
12. Amendment or Substitution of Stock Option. The terms of the Stock
Option may be amended from time to time by the Committee in its discretion in
any manner that it deems appropriate; provided that, except as otherwise
provided in paragraph 11 (Adjustment) above, no such amendment shall adversely
affect in a material manner any of your rights under the award without your
written consent, and provided further that the Committee shall not reduce the
exercise price of each of the Stock Option without approval of the stockholders
of the Company.
13. Remedies. The parties hereto shall be entitled to enforce their
rights under this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto acknowledge and agree that money
damages would not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto may, in its sole discretion, apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
14. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto whether so
expressed or not.
15. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
16. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same Agreement.
17. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
18. Governing Law. THE VALIDITY, CONSTRUCTION, INTERPRETATION,
ADMINISTRATION AND EFFECT OF THE PLAN, AND OF ITS RULES AND REGULATIONS, AND
RIGHTS RELATING TO THE PLAN AND TO THIS
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AGREEMENT, SHALL BE GOVERNED BY THE SUBSTANTIVE LAWS, BUT NOT THE CHOICE OF LAW
RULES, OF THE STATE OF DELAWARE.
19. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications shall
be sent to you at the address appearing on the signature page to this Agreement
and to the Company at 1220 Simon Circle, Anaheim, CA 92806, Attn: Timothy
Donnelly, or to such other address or to the attention of such other person as
the recipient party has specified by prior written notice to the sending party.
20. Entire Agreement. This Agreement and the terms of the Plan
constitute the entire understanding between you and the Company, and supersede
all other agreements, whether written or oral, with respect to your acquisition
of the Option Shares.
* * * * *
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SIGNATURE PAGE TO STOCK OPTION AGREEMENT
Please execute the extra copy of this Agreement in the space below and
return it to Timothy Donnelly at 1220 North Simon Circle, Anaheim, CA 92806, to
confirm your understanding and acceptance of the agreements contained in this
Agreement.
Very truly yours,
DDI CORP.
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By:
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Name:
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Title:
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Enclosures: 1. Extra copy of this Agreement
Copy of the Plan
The undersigned hereby acknowledges having read this Agreement and the Plan
and hereby agrees to be bound by all provisions set forth herein and in the
Plan.
Dated as of OPTIONEE
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Name:
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Address (please print)
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