Exhibit 10.20

 

IOMEGA CORPORATION

 

Nonstatutory Stock Option Agreement

Granted Under 1997 Stock Incentive Plan

 

1. Grant of Option.

 

This agreement evidences the grant by Iomega Corporation, a Delaware corporation
(the “Company”), on              (the “Grant Date”) to              , an
employee of the Company (the “Participant”), of an option to purchase, in whole
or in part, on the terms provided herein and in the Company’s 1997 Stock
Incentive Plan (the “Plan”), a total of              shares of common stock,
$0.03 1/3 par value per share (the “Common Stock”), of the Company (the
“Shares”) at $         per Share. Unless earlier terminated, this option shall
expire on the tenth anniversary of the Grant Date (the “Final Exercise Date”).

 

It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the “Code”). Except
as otherwise indicated by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.

 

2. Vesting Schedule.

 

(a) Scheduled Vesting. Except as otherwise provided in this agreement, this
option will become exercisable (“vest”) in accordance with the following
schedule:

 

Date

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Amount Which First

Becomes Vested

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Amount Vested on a

Cumulative Basis

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First anniversary of the Grant Date

  25%   25%

Second anniversary of the Grant Date

  25%   50%

Third anniversary of the Grant Date

  25%   75%

Fourth anniversary of the Grant Date

  25%   100%

 

This option shall expire upon, and will not be exercisable after, the Final
Exercise Date. The right of exercise shall be cumulative so that to the extent
the option is not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect to all
shares for which it is vested until the earlier of the Final Exercise Date or
the termination of this option under Sections 3, 4 or 5 hereof or the Plan.

 

(b) Automatic Acceleration Upon Certain Events.

 

(i) Effective immediately prior to the occurrence of an Acquisition Event (as
defined in the Plan), the vesting schedule of this option shall be accelerated
in part so that one-half of the number of shares which would otherwise have
first become exercisable on any date on or after the date of such Acquisition
Event shall become vested. The remaining one-half of such number of shares shall
continue to vest in accordance with Section 2(a) (i.e., on each subsequent
anniversary of the Vesting Date, one-half of the number of shares that would
otherwise have first become exercisable shall become vested), except as
otherwise provided in subparagraph (ii) or (iii) below or as otherwise
determined by the Board of Directors in accordance with the Plan.

 

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(ii) To the extent this option remains outstanding after an Acquisition Event,
then, as of the date which is the second anniversary of the date of the
Acquisition Event, the vesting schedule of this option shall be accelerated so
that all shares which remain unvested shall automatically become vested in full.

 

(iii) To the extent this option remains outstanding after an Acquisition Event,
then, if (x) the Participant’s employment is terminated by the Company or its
successor without Cause (as defined in Section 5(e)) or (y) the Participant
resigns from employment by the Company or its successor for Good Cause (as
defined below), in either case prior to the time that this option is vested in
full, then the vesting schedule of this option shall be accelerated so that all
shares which remain unvested shall automatically become vested in full.

 

(iv) For purposes of this Section, “Good Cause” shall mean a significant
reduction in the Participant’s compensation, position or responsibilities.

 

3. Non-Solicitation; Non-Disclosure.

 

(a) Non-Solicitation of Employees. Participant agrees that during Participant’s
employment with the Company, and for one year following Participant’s
termination of employment with the Company, Participant shall not, directly or
indirectly, in any capacity (including but not limited to, as an individual, a
sole proprietor, partner, stockholder, investor, officer or director of a
corporation, an employee, agent, associate, or consultant of any person, firm or
corporation, or other entity) hire any person from, attempt to hire any person
from, or solicit, induce, persuade, or otherwise cause any person to leave his
or her employment with the Company. Any breach of Participant’s obligations
under this paragraph shall, in addition to all other remedies available to the
Company, result in the immediate release of the Company from any obligations it
would otherwise have to provide further payments or benefits under this
agreement.

 

(b) Non-Solicitation of Customers. Participant agrees that during Participant’s
employment with the Company and for one year following Participant’s termination
of employment with the Company, Participant shall not, directly or indirectly,
in any capacity, solicit the business of any customer of the Company except on
behalf of the Company, or attempt to induce any customer of the Company to cease
or reduce its business with the Company; provided that following the termination
of Participant’s employment with the Company he or she may solicit a customer of
the Company to purchase goods or services that do not compete directly or
indirectly with those then offered by the Company. Any breach of Participant’s
obligations under this paragraph shall, in addition to all other remedies
available to the Company, result in the immediate release of the Company from
any obligations it would otherwise have to provide further payments or benefits
under this agreement.

 

(c) Non-Disclosure. Participant agrees that, except in the ordinary and proper
course of performing his or her duties for the Company, Participant shall not
disclose to others any proprietary, confidential or secret information,
including but not limited to inventions, intellectual property, information
relating to the Company’s products, research, technology, development, services,
clients, customers, suppliers, employees, business, operation, activities,
procedures, plans, or proposals.

 

(d) Remedies. Participant agrees and acknowledges that if Participant violates
the non-solicitation or non-disclosure provisions of this Section 3 (i)
Participant’s right to exercise this option

 

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and any other options granted by the Company shall terminate immediately, (ii)
the Company may pursue any and all remedies available at law or in equity,
including but not limited to specific performance, injunctive relief and
damages, and (iii) in addition to any remedies described in (ii), the
Participant shall pay to the Company an amount equal to Participant’s gain
resulting from any exercise of the option computed as the difference between the
option price and the market price on the date of exercise multiplied by the
number of shares exercised.

 

4. Non-Competition.

 

(a) Confidential/Proprietary Information. Participant acknowledges and agrees
that in Participant’s position at the Company, Participant will have access to,
knowledge of and use of the Company’s trade secrets, proprietary information,
business operations, business know-how, employee information, and customer
information. Participant acknowledges that such information is critical to the
successful operation of Company’s business, that it would be impossible for
Participant to discard all knowledge of such information upon separation of
employment from the Company, and that it would be unfair to the Company for such
information to be used by an Participant in a business that competes or attempts
to compete with the Company. Participant recognizes and agrees that the Company
operates and competes on a worldwide basis and that it is appropriate that this
covenant not to compete extends worldwide.

 

(b) Participant acknowledges and agrees that Participant’s employment with the
Company and any stock option grants made to Participant from the Company are
consideration for this agreement not to compete.

 

(c) Participant agrees that during Participant’s employment with the Company and
for one year following the termination of Participant’s employment with the
Company for whatever reason, Participant will not directly or indirectly
anywhere in the world, engage in any business or enterprise or perform services
for any entity, whether as owner, partner, officer, director, employee,
consultant, investor, lender or otherwise, except as the holder of not more than
1% of the outstanding stock of a publicly-held company, that actually or
potentially competes with the Company. For the purposes of this section only and
not for purposes of any antitrust related market definition or analysis, an
entity (which includes but is not limited to a person, partnership, joint
venture, or corporation) will be considered to compete with the Company if such
entity (or in the case of a multi-billion dollar, multi-division corporation,
the division thereof for which services are proposed to be performed by
Participant) or any of its affiliates engages directly or indirectly in the
removable media storage device market segment as all or part of its business.
Examples of such entities include: Syquest, Castlewood, Imation, Sony, HP
Storage Division, Seagate Removable Storage Division, and their affiliates.
These examples are provided for illustration purposes and are not intended to be
an all-inclusive list or to limit the preceding terms in any way. Any breach of
Participant’s obligations under this paragraph shall, in addition to all other
remedies available to the Company, result in the immediate release of the
Company from any obligations it would otherwise have to provide further payments
or benefits under this agreement.

 

(d) Participant agrees and acknowledges that if Participant violates the
non-competition provisions of this Section 4 (i) Participant’s right to exercise
this option and any other options granted by the Company shall terminate
immediately, (ii) the Company may pursue any and all remedies available at law
or in equity, including but not limited to specific performance, injunctive
relief and damages, and (iii) in addition to any remedies described in (ii), the
Participant shall pay to the Company an amount equal to Participant’s gain
resulting from any exercise of the option computed as the difference between the
option price and the market price on the date of exercise multiplied by the
number of shares exercised.

 

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(e) If any restriction set forth in this Section 4 is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad of a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

 

5. Exercise of Option.

 

(a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office,
accompanied by payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share or for
fewer than ten whole shares.

 

(b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 5, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an
“Eligible Participant”).

 

(c) Termination of Relationship with the Company. If the Participant ceases to
be an Eligible Participant for any reason, then, except as provided in Sections
3 or 4 or in paragraphs (d) and (e) of this Section 5, the right to exercise
this option shall terminate three months after such cessation (but in no event
after the Final Exercise Date), provided that this option shall be exercisable
only to the extent that the Participant was entitled to exercise this option on
the date of such cessation.

 

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22 (e)(3) of the Code) prior to the
Final Exercise Date while he or she is an Eligible Participant and the Company
has not terminated such relationship for “cause” as specified in paragraph (e)
below, this option shall be exercisable, within the period of one year following
the date of death or disability of the Participant by the Participant, provided
that this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability
plus any Pro Rata Shares (as defined below), and further provided that this
option shall not be exercisable after the Final Exercise Date. “Pro Rata Shares”
means the number of shares that would have first become exercisable on the next
anniversary of the Grant Date times a fraction, the numerator of which is the
number of days elapsed from the most recent anniversary of the Grant Date until
the date of death or disability and the denominator of which is 365.

 

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date,
is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. “Cause” shall mean willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The Participant shall be
considered to have been discharged for “Cause” if the Company determines, within
30 days after the Participant’s resignation, that discharge for cause was
warranted.

 

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6. Withholding.

 

No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.

 

7. Nontransferability of Option.

 

This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.

 

8. Provisions of the Plan.

 

This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this agreement.

 

IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take effect as
a sealed instrument.

 

       

IOMEGA CORPORATION

Dated:

 

 

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By:

 

 

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PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a copy of the
Company’s 1997 Stock Incentive Plan and Prospectus.

 

       

PARTICIPANT:

DATED:

 

 

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Signature

       

Name:

 

 

 

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Address:

 

 

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