EXHIBIT 10(o)
 

     
Notice of Grant of Stock Options
and Option Agreement
  Digi International Inc.
ID: 41-1532464
11001 Bren Road East
Minnetonka, MN 55343

 

     
Optionee Name
Address
City, State USA Zip
  Option Number
Plan: 2000
ID:

 
Effective [date], you have been granted a(n) Non-Qualified Stock Option to buy
           shares of Digi International Inc. (the Company) stock at $          
per share.
The total option price of the shares granted is $          
Shares in each period will become fully vested on the date shown.

              Shares   Vest Type   Full Vest   Expiration

 
By your signature and the Company’s signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company’s Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.
 

     
 
   
 
   
 
   
Digi International Inc.
  Date
 
   
 
   
 
   
Optionee Name
  Date

 

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DIGI INTERNATIONAL INC.
2000 OMNIBUS STOCK PLAN
Terms and Conditions of Nonstatutory Stock Option Agreement
          These are the terms and conditions applicable to the NONSTATUTORY
STOCK OPTION AGREEMENT between Digi International Inc., a Delaware corporation
(the “Company”), and the optionee (the “Optionee”) listed on the cover page
hereof (the “Cover Page”) effective as of the date of grant. The Cover Page
together with these terms and conditions of Nonstatutory Stock Option Agreement
constitute the “Nonstatutory Stock Option Agreement.”
          WHEREAS, the Company desires to carry out the purposes of its Digi
International Inc. 2000 Omnibus Stock Plan as amended from time to time (the
“Plan”), by affording the Optionee an opportunity to purchase Common Stock of
the Company, par value $.01 per share (the “Common Shares”), according to the
terms set forth herein and on the Cover Page;
          NOW THEREFORE, the Company hereby grants this Option to the Optionee
under the terms and conditions as follows.
          1. Grant of Option. Subject to the terms of the Plan, the Company
hereby grants to the Optionee the right and option (the “Option”) to purchase
the number of Common Shares specified on the Cover Page, on the terms and
conditions hereinafter set forth. The Option is not intended by the Company to
be an “incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).
          2. Purchase Price. The purchase price of each of the Common Shares
subject to the Option shall be the exercise price per share specified on the
Cover Page, which price has been specified in accordance with the Plan and shall
not be less than 50% of the Fair Market Value (as defined in paragraph 2.1(l) of
the Plan) of a common share as of the date of grant.
          3. Option Period.
          (a) Subject to the provisions of paragraphs 5(a), 5(b) and 6(b)
hereof, the Option shall become exercisable as to the number of shares and on
the dates specified in the exercise schedule on the Cover Page. The exercise
schedule shall be cumulative; thus, to the extent the Option has not already
been exercised and has not expired, terminated or been canceled, the Optionee
may at any time, and from time to time, purchase all or any portion of the
Common Shares then purchasable under the exercise schedule. Notwithstanding the
foregoing or any other provision herein to the contrary, the Option shall become
immediately exercisable:
     (i) upon the occurrence of the death or disability within the meaning

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of Section 22(e)(3) of the Code, of the Optionee (as more particularly described
in paragraphs 5(a)(ii) or 5(b) and 6(a) hereof); or
     (ii) in the event that the committee under the Plan (the “Committee”) shall
declare pursuant to paragraph 6(b) hereof that the Option shall be canceled at
the time of, or immediately prior to the occurrence of an Event, as defined in
paragraph 6(b) hereof.
          (b) The Option and all rights to purchase shares thereunder shall
cease on the earliest of:
     (i) the expiration date specified on the Cover Page (which date shall not
be more than ten years after the date of this Nonstatutory Stock Option
Agreement);
     (ii) the expiration of the period after the termination of the Optionee’s
employment (as defined in paragraph 5 of the Plan) within which the Option is
exercisable as specified in paragraph 5(a) or 5(b), whichever is applicable; or
     (iii) the date, if any, fixed for cancellation pursuant to paragraph 6(b)
hereof.
Notwithstanding any other provision in this Nonstatutory Stock Option Agreement,
in no event may anyone exercise the Option, in whole or in part, after its
original expiration date.
          4. Manner of Exercising Option.
          Subject to the terms and conditions of this Nonstatutory Stock Option
Agreement, the Option may be exercised online with E*Trade at
www.etrade.com/stockplans or by such other means as the Committee shall approve.
In accordance with present practice, when your stock option is granted, a letter
or email will be sent to you from E*Trade with instructions on how to activate
your account with E*Trade so that you can view and exercise your stock options
online. If you are a director or officer of the Company, then you must contact
E*Trade Executive Support at 1-800-775-2793 in order to exercise your options.
          5. Exercisability of Option After Termination of Employment.
          (a) During the lifetime of the Optionee, the Option may be exercised
only while the Optionee is employed (as defined in paragraph 5 of the Plan) by
the Company or a parent or subsidiary thereof, and only if the Optionee has been
continuously so employed since the date of this Nonstatutory Stock Option
Agreement, except that:
     (i) if the Optionee is not an Outside Director (as defined in paragraph
2.1(s) of the Plan), the Option shall continue to be exercisable for three
months after termination of the Optionee’s employment but only to the extent
that the

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Option was exercisable immediately prior to the Optionee’s termination of
employment, and if the Optionee is an Outside Director, the Option shall
continue to be exercisable after the Optionee ceases to be a director of the
Company but only to the extent that the Option was exercisable immediately prior
to the Optionee’s ceasing to be a director;
     (ii) in the event the Optionee is disabled (within the meaning of Section
22(e)(3) of the Code) while employed, the Optionee or his or her legal
representative may exercise the Option within one year after the termination of
the Optionee’s employment; and
     (iii) if the Optionee’s employment terminates after a declaration pursuant
to paragraph 6(b) of this Nonstatutory Stock Option Agreement, the Optionee may
exercise the Option at any time permitted by such declaration.
          (b) In the event of the Optionee’s death while employed by the Company
or a parent or subsidiary thereof, or within three months after his or her
termination of employment, the legal representative, heirs or legatees of the
Optionee’s estate or the person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option within one year after the death
of the Optionee.
          (c) Neither the transfer of the Optionee between any combination of
the Company, its parent and any subsidiary of the Company, nor a leave of
absence granted to the Optionee and approved by the Committee, shall be deemed a
termination of employment. The terms “parent” and “subsidiary” as used herein
shall have the meaning ascribed to “parent corporation” and “subsidiary
corporation,” respectively, in Sections 424(e) and (f) (or successor provisions)
of the Code.
          6. Acceleration of Option.
          (a) Disability or Death. If paragraph 5(a)(ii) or 5(b) of this
Nonstatutory Stock Option Agreement is applicable, the Option, whether or not
previously exercisable, shall become immediately exercisable in full if the
Optionee shall have been employed continuously by the Company or a parent or
subsidiary thereof between the date the Option was granted and the date of such
disability or, in the event of death, a date not more than three months, prior
to such death.
          (b) Dissolution, Liquidation, Merger. In the event of (i) a proposed
merger or consolidation of the Company with or into any other corporation,
regardless of whether the Company is the surviving corporation, unless
appropriate provision shall have been made for the protection of the Option by
the substitution, in lieu of the Option, of an option to purchase appropriate
voting common stock (the “Survivor’s Stock”) of the corporation surviving any
such merger or consolidation or, if appropriate, the parent corporation of the
Company or such surviving corporation, or, alternatively, by the delivery of a
number of shares of the Survivor’s Stock which has a Fair Market Value as of the
effective date of such merger or consolidation

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equal to the product of (A) the excess of (x) the Event Proceeds per Common
Share (as hereinafter defined) covered by the Option as of such effective date,
over (y) the Option exercise price per Common Share, times (B) the number of
Common Shares covered by the Option, or (ii) the proposed dissolution or
liquidation of the Company (such merger, consolidation, dissolution or
liquidation being herein called an “Event”), the Committee shall declare, at
least ten days prior to the actual effective date of an Event, and provide
written notice to the Optionee of the declaration, that the Option, whether or
not then exercisable, shall be canceled at the time of, or immediately prior to
the occurrence of, the Event (unless it shall have been exercised prior to the
occurrence of the Event) in exchange for payment to the Optionee, within ten
days after the Event, of cash equal to the amount (if any), for each Common
Share covered by the canceled Option, by which the Event Proceeds per Common
Share (as hereinafter defined) exceeds the exercise price per Common Share
covered by the Option. At the time of the declaration provided for in the
immediately preceding sentence, the Option shall immediately become exercisable
in full and the Optionee shall have the right, during the period preceding the
time of cancellation of the Option, to exercise the Option as to all or any part
of the Common Shares covered thereby. The Option, to the extent it shall not
have been exercised prior to the Event, shall be canceled at the time of, or
immediately prior to, the Event, as provided in the declaration, and this Plan
shall terminate at the time of such cancellation, subject to the payment
obligations of the Company provided in this paragraph 6(b). For purposes of this
paragraph, “Event Proceeds per Common Share” shall mean the cash plus the fair
market value, as determined in good faith by the Committee, of the non-cash
consideration to be received per Common Share by the stockholders of the Company
upon the occurrence of the Event.
          7. Limitation on Transfer. During the lifetime of the Optionee, only
the Optionee or his or her guardian or legal representative may exercise the
Option. The Optionee shall not assign or transfer the Option otherwise than by
will or the laws of descent and distribution, and the Option shall not be
subject to pledge, hypothecation, execution, attachment or similar process. Any
attempt to assign, transfer, pledge, hypothecate or otherwise dispose of the
Option contrary to the provisions hereof, and the levy of any attachment or
similar process upon the Option, shall be null and void.
          8. Stockholder Rights Before Exercise. The Optionee shall have none of
the rights of a stockholder of the Company with respect to any share subject to
the Option until the share is actually issued to him or her upon exercise of the
Option.
          9. Adjustment For Changes in Capitalization. The Option is subject to
adjustment for changes in capitalization as provided in paragraph 16 of the
Plan.
          10. Tax Withholding. The parties hereto recognize that the Company or
a parent or subsidiary thereof may be obligated to withhold federal and state
income taxes and social security or other taxes upon the Optionee’s exercise of
the Option. The Optionee agrees that, at the time he or she exercises the
Option, if the Company or a parent or subsidiary thereof is required to withhold
such taxes, he or she will promptly pay in cash upon demand to the Company, or
the parent or subsidiary having such obligation, such amounts as shall be
necessary to satisfy such obligation; provided, however, that in lieu of all or
any part of such a cash

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payment, the Committee may, but shall not be required to, (or, in the case of an
Optionee who is an Outside Director (as defined in the Plan), the Committee
shall) permit the Optionee to elect to cover all or any part of the required
withholdings through a reduction of the number of Common Shares delivered to the
Optionee or through a subsequent return to the Company of shares delivered to
the Optionee.
          11. Interpretation of this Nonstatutory Stock Option Agreement. All
decisions and interpretations made by the Committee with regard to any question
arising hereunder or under the Plan shall be binding and conclusive upon the
Company and the Optionee. In the event that there is any inconsistency between
the provisions of this Nonstatutory Stock Option Agreement and the Plan, the
provisions of the Plan shall govern.
          12. Discontinuance of Employment. This Nonstatutory Stock Option
Agreement shall not give the Optionee a right to continued employment with the
Company or any parent or subsidiary thereof, and the Company or any such parent
or subsidiary thereof employing the Optionee may terminate his or her employment
and otherwise deal with the Optionee without regard to the effect it may have
upon him or her under this Nonstatutory Stock Option Agreement.
          13. General. The Company shall at all times during the term of this
Option reserve and keep available such number of Common Shares as will be
sufficient to satisfy the requirements of this Nonstatutory Stock Option
Agreement. This Nonstatutory Stock Option Agreement shall be binding in all
respects on the Optionee’s heirs, representatives, successors and assigns. This
Nonstatutory Stock Option Agreement is entered into under the laws of the State
of Minnesota and shall be construed and interpreted thereunder.

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ADDENDUM I
TO
TERMS AND CONDITIONS
     Paragraph 6, entitled “Acceleration of Option,” is amended to add new
subparagraph (c) which provide as follows:
     (c) Change in Control. The Option, whether or not previously exercisable,
shall become immediately exercisable in full upon the occurrence of any “Change
in Control”. A “Change in Control” shall be deemed to have occurred upon the
occurrence of either of the following events:
(i) any person, as defined in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934 (the “Exchange Act”), becomes the “beneficial owner” (as
defined in Rule 13d-3 promulgated pursuant to the Exchange Act), directly or
indirectly, of securities of the Company having 25% or more of the voting power
in the election of directors of the Company, excluding, however, Optionee (or a
group of persons, including Optionee, acting in concert); or
(ii) the occurrence within any period, commencing immediately after an Annual
Meeting of Stockholders and continuing to and including the Annual Meeting of
Stockholders occurring on or about the third anniversary date of the
commencement of such period, of a change in the Board of Directors of the
Company with the result that the Incumbent Members (as defined below) do not
constitute a majority of the Company’s Board of Directors. The term “Incumbent
Members” shall mean the members of the Board on the date of the commencement of
such period, provided that any person becoming a director during such period
whose election or nomination for election was approved by a majority of the
directors who, on the date of such election or nomination for election,
comprised the Incumbent Members shall be considered one of the Incumbent Members
in respect of such period.