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EXHIBIT 10.37
Option Number 93-3
CALNETICS CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT
("1993 AGREEMENT UNDER THE 1993 NONSTATUTORY STOCK OPTION PLAN")
This 1993 Agreement, dated as of this 18th day of July, 1994, is
entered into by and between CALNETICS CORPORATION, a California corporation
(the "Company"), and Lon Schultz (the "Option Holder").
WHEREAS, the Company has adopted the 1993 Nonstatutory Stock Option
Plan (the "1993 Plan") which is incorporated herein by reference and made a
part of this Agreement; and
WHEREAS, pursuant to the Company's Plan, the Board of Directors of the
Company (the "Board") or a committee (the "Committee") appointed by the Board to
administer the Plan has granted to Option Holder a stock option upon the terms
and conditions hereinafter stated.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties hereto contained herein, it is hereby agreed:
1. Grant Option
Effective as of the date hereof, the Company hereby grants to Option
Holder an option (the "Option") to purchase, upon and subject to the terms and
conditions of this 1993 Agreement and the 1993 Plan, all or part of 50,000
shares (the "Shares") of Common Stock (as defined below) at the price of $3.00
per share. The number of Shares subject to the Option and the price per share
thereof are subject to adjustment under certain circumstances, as provided in
the Plan. The Option is not intended to qualify as an Incentive Stock Option
within the meaning of Section 422A of the Internal Revenue Code.
2. Definitions
Unless the context clearly indicates otherwise, and subject to the
terms and conditions of the 1993 Plan as the same may be amended from time to
time, the following terms, when used in this Agreement, shall have the meanings
set forth in this Section 2:
(a) "Common Stock" shall mean the Common Stock, without par value,
of the Company or such other class of shares or other securities as may be
applicable pursuant to the provisions of Section 10 of this Agreement.
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(b) "Terminating Event" shall mean any of the following:
(i) the dissolution or liquidation of the Company; or
(ii) the reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Common
Stock of the Company is exchanged for or converted into cash or
property or securities not issued by the Company, unless the
reorganization, merger or consolidation shall have been affirmatively
recommended to the Company's stockholders, by a majority of the members
of the Board and provision shall have been made for the Option to be
continued in effect, adjusted as provided in Section 10 of this 1993
Agreement and to continue in effect as so adjusted.
3. Term of Option
This Option shall expire on the date ten years from the date hereof.
4. Exercisability of Option
The Option shall become exercisable as to (a) 16,667 Shares on July 19,
1995; (b) 16,667 Shares on July 19, 1996; and (c) 16,666 Shares on July 19,
1997, provided, however, that the Option shall become fully exercisable prior
to such dates upon the earlier of (a) the occurrence of a Terminating Event, or
(b) the dissemination of the stockholders of the Company of a proxy statement
seeking stockholder approval of a Terminating Event of the type described in
subsection 2(b)(ii) above. Upon becoming exercisable, the Option shall remain
exercisable as to all unexercised Shares until expiration, termination or
modification of the Option in accordance with the terms of this Agreement or
the 1993 Plan. Furthermore, in order for the Option to be exercisable on any
date, Option Holder must then be and must continuously, since grant of the
Option, have been in the employ of the Company, subject, however, to the
provisions of Sections 6 and 7 hereof.
5. Manner of Exercise
The Option may be exercised by written notice delivered to the Company
stating the number of Shares with respect to which the Option is being
exercised, together with (a) such additional information or forms as the
Committee may require, and (b) the purchase price of such Shares in the form of
either cash or check.
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6. Expiration on Termination of Employment
(a) If Option Holder shall cease to be employed by the Company either
voluntarily or because of Option Holder's discharge for cause, of which the
Committee shall be the sole judge, this Option shall expire concurrently
with such cessation of employment.
(b) If Option Holder ceases to be employed by the Company for any
reason other than Option Holder's death (Section 7), voluntary
termination or discharge for cause, this Option shall, subject to earlier
termination pursuant to Section 3 hereof, expire three months thereafter,
and during such three-month period this Option shall be exercisable only
as to those Shares, if any, with respect to which the Option Holder could
have exercised the Option as of the date of such cessation of employment.
7. Assignment or Transfer
The Option shall not be assigned or transferred, in whole or in part,
except by will or by the laws of descent and distribution, and shall be
exercisable only by the Option Holder during Option Holder's lifetime, except
as provided in this Section 7. If Option Holder shall die while in the employ
of the Company, or in the three-month period referred to in Section 6(b)
hereof, the person or persons to whom Option Holder's rights under the Option
shall have passed by will or by the applicable laws of descent and distribution
shall have the right, at any time within six months after the date of Option
Holder's death, to exercise the Option as to those Shares, if any, with respect
to which the Option Holder could have exercised the Option as of the date of
the Option Holder's death; provided, that all rights under such Option shall
expire in any event on the date specified in Section 3 hereof.
8. Option Holder' Employment
This 1993 Agreement shall not obligate the Company to employ Option
Holder for any period of time, nor constitute a contract or agreement of
employment with Option Holder, nor shall it interfere in any way with the right
of the Company to reduce Option Holder's compensation or terminate Option
Holder's employment at any time with or without cause.
9. No Rights as Shareholder
Option Holder shall have no rights as a shareholder with respect to
Shares of the Common Stock covered by this Option until the date of the
issuance of a stock certificate or stock certificates representing such Shares.
No adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are issued,
except as is expressly provided in Section 10.
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10. Adjustment
(a) Subject to provisions of Section 10(b), if the outstanding
shares of Common Stock are increased, decreased, changed into or exchanged for
a different number or kind of shares or securities of the Company as the result
of any one or more reorganizations, recapitalizations, reclassifications, stock
dividends, stock splits, reverse stock splits and the like, upon proper
authorization of the Board an appropriate and proportionate adjustment shall be
made in (a) the number or kind of shares or other securities subject to the
Option, but only to the extent this Option then remains unexercised, and (b)
the price for each share or other unit of any securities subject to this
Option, but only to the extent this Option then remains unexercised, and
without change in the aggregate purchase price as to which this Option remains
unexercised.
(b) No such adjustment need be made if, upon advice of counsel, the
Board or the Committee determines that such adjustment may result in the
receipt of federally taxable income to holders of Common Stock or other classes
of the Company's securities.
(c) No fractional interests shall be issued on account of any such
adjustment.
11. Securities Matters
(a) Option Holder acknowledges that any Common Stock to be acquired
upon exercise of the Option may be restricted stock which may not have been
registered under the Securities Act of 1933, as amended ("Securities Act"), and
any certificate representing the Shares to be issued may contain a legend or
legends with respect to restrictions on transfer as counsel to the Company
deems to be required by applicable provisions of law and this Agreement. If
required by the Company, Option Holder agrees to give satisfactory assurance in
writing, signed by Option Holder or his or her legal representative, that such
Common Stock is not being purchased with a view to the distribution thereof;
provided, however, that such assurance shall be deemed inapplicable to (1) any
sale of such Shares by the Option Holder subject to a registration statement
covering such sale, which has heretofore been (or may hereafter be) filed and
become effective under the Securities Act, and with respect to which the
registration statement is current and no stop order suspending the
effectiveness thereof has been issued, and (2) any other sale of such Shares
with respect to which, in the opinion of counsel for the Company, such
assurance is not required to be given in order to comply with the provisions of
the Securities Act.
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(b) As a condition to the exercise of any portion of the
Option, the Company may require Option Holder to make any
representation and/or warranty to the Company as may, in the judgment
of counsel to the Company, be required under any applicable law or
regulation.
12. Withholding
The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which the Company determines it is required to
withhold in connection with this 1993 Agreement and the transactions
contemplated hereby.
13. No Encumbrance
Neither this 1993 Agreement, nor this Option nor any rights and
privileges under this Agreement may be assigned or subjected to any
encumbrance, pledge or charge of any nature, except that, under such rules and
regulations as the Board of Directors or the Committee may establish pursuant
to the terms of the 1993 Plan, a beneficiary may be designated in respect of
the Option in the event of the death of the Option Holder, and except, also
that if such beneficiary shall be the executor or administrator of the estate
of the Option Holder, any rights in respect of this Option may be transferred
to the person or persons or entity (including a trust) entitled thereto under
the will of the Option Holder, or, in the case of intestacy, under the laws
relating to intestacy.
14. Other Plans
Nothing contained in this 1993 Agreement shall affect the right
of the Option Holder to participate in and receive benefits under and in
accordance with the then current provisions of any pension, insurance, profit
sharing or other employee welfare plan or program of the Company.
15. Amendment
The Option hereby granted is subject to, and the Company and
Option Holder agree to be bound by, all of the terms and conditions of the 1993
Plan as the same may be amended from time to time in accordance with the terms
thereof, but no such amendment may adversely affect the Option Holder's rights
under this 1993 Agreement without the Option Holder's consent.
16. Applicable Law
The interpretation, performance and enforcement of this 1993
Agreement shall be governed by the laws of the State of California.
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17. Notice
Any notice or other written communication required or permitted to be
given under the terms of this Agreement shall be addressed to the Company in
care of its Secretary at the principal executive offices of the Company and any
notice to be given to Option Holder shall be addressed to Option Holder at the
address given beneath his or her signature hereto, or such other address as
Option Holder or the Company may hereafter designate in writing to the other.
Any such notice shall be deemed to have been duly given when enclosed in a
properly sealed envelope addressed as aforesaid, registered or certified and
deposited (postage and registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United States.
18. Binding Effect of Agreement
This Agreement shall be binding upon any inure to the benefit of any
successors and assigns of the Company and upon Option Holder and Option
Holder's heirs, executors, administrators, personal representatives, permitted
assignees and successors in interest.
IN WITNESS WHEREOF, the parties hereto have executed this 1993
Agreement as of the date first above written.
COMPANY:
CALNETICS CORPORATION, a
California corporation
By: /s/ CLINTON GERLACH
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President
OPTION HOLDER:
/s/ LON SCHULTZ
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ADDRESS: 2060 Temple Hills Dr.
Laguna Beach, CA 92651
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