**Exhibit 10.20**

 

**OMTOOL, LTD.**

**1997 STOCK OPTION PLAN**

**NOTICE OF Non Qual STOCK OPTION AGREEMENT**

 

 
| [DATE]                  |             |   |
|-------------------------|------------------|--------|
|                    |             |   |
|                    |             |   |
|                    |             |   |
| [NAME]                  | Omtool, Ltd.     |   |
| [ADDRESS]               | 8 Industrial Way |   |
| [CITY,  STATE ZIP CODE] | Salem, NH 03079  |   |

 

**[NAME]** (the “Employee”), you have been grantedan option to purchase Common Stock, $0.01 par value (“Common Stock”), ofOmtool, Ltd., a Delaware corporation (the “Company”) subject to terms as andconditions as set forth on the following page(s):

 
| Grant Number:           |     |   |   |   |
|-------------------------|----------|--------|--------|--------|
| Date of Grant:          |     |   |   |   |
| Shares Granted:         |     |   |   |   |
| Option Price:           |     |   |   |   |
| Grant Type:             | Non Qual |   |   |   |
| Vesting Start  Date:    |     |   |   |   |
| Last Date to  Exercise: |     |   |   |   |

 

Vesting:

Subject to the terms of the Plan as set forth on thefollowing pages, shares vest according to the following vesting schedule:

 
| **Date of  Vest**                     | ** ** | **Shares  Vesting Over**

**the  Period** | ** ** | **Vesting  in Period**

**Occurs** | ** ** | **Last  Date to**

**Exercise**   | ** ** |
|---------------------------------------|------------|-------------------------------------------|------------|------------------------------------|------------|-----------------------------------|------------|
|                                  |       |                                      |       |                               |       |                              |       |
| 1st Anniversary of Vesting Start Date |       | 25%                                       |       | End of  period                     |       | 10th anniversary from  Grant Date |       |
| 2nd Anniversary of Vesting Start Date |       | 25%                                       |       | End of  period                     |       | 10th anniversary from  Grant Date |       |
| 3rd Anniversary of Vesting Start Date |       | 25%                                       |       | End of  period                     |       | 10th anniversary from  Grant Date |       |
| 4th Anniversary of Vesting Start Date |       | 25%                                       |       | End of  period                     |       | 10th anniversary from  Grant Date |       |

 

In the event of a Change of Control, as defined below,any shares subject to the option granted that are still outstanding and not yetvested and exercisable shall become 100% vested and exercisable immediatelyprior to the Change in Control and shall be exercisable for the remainingduration of the option. A “Change in Control” is defined as any event in which(a) the Company is to be merged or consolidated with or acquired by anotherentity in a merger or other reorganization in which the holders of theoutstanding voting stock of the Company immediately preceding the consummationof such event shall, immediately following such event, hold, as a group, lessthan a majority of the voting securities of the surviving or successor entity,or (b) all or substantially all of the Company’s capital stock or assets aresold or transferred to another entity.

 

IN WITNESS WHEREOF, the Company and the Employee havecaused this instrument to be executed as of the date first above written.

 

 
|   |   |
|--------|--------|
|   |   | By: |   |   |
| [NAME] |   | Name: |
|   |   | President and CEO |
|        |        |  |  |  |

 

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                                                **1.**                                      **Grant Under 1997 StockPlan****.** This option is granted pursuant to andis governed by the Company’s 1997 Stock Plan (the “Plan”) and, unless thecontext otherwise requires, terms used herein shall have the same meaning as inthe Plan. Determinations made in connection with this option pursuant to thePlan shall be governed by the Plan as it exists on this date.

 

                                                **2.**                                      **Grant as Incentive StockOption; Other Options****.**Thisoption is not intended to qualify as an incentive stock option underSection 422 of the Internal Revenue Code of 1986, as amended (the “Code”).This option is in addition to any other options heretofore or hereafter grantedto the Employee by the Company or any Related Corporation (as defined in thePlan), but a duplicate original of this instrument shall not effect the grantof another option.

 

                                                **3.**                                      **Vesting of Option ifEmployment Continues****.**If theEmployee has continued to be employed by the Company or any Related Corporationon the following dates, the Employee may exercise this option for the number ofshares of Common Stock set opposite the applicable date.

 

Notwithstanding the foregoing, in accordance with and subject to theprovisions of the Plan, the Committee may, in its discretion, accelerate thedate that any installment of this Option becomes exercisable. The foregoingrights are cumulative and (subject to Sections 4 or 5 hereof if the Employeeceases to be employed by the Company and all Related Corporations) may beexercised on or before the date which is 10 (ten) years from the date thisoption is granted.

 

                                                **4.**                                      **Termination of Employment****.**

 

**                                               ****(a)**                                  **Termination Other Than forCause****.**If the Employee ceases to be employed bythe Company and all Related Corporations, other than by reason of death ordisability as defined in Section 5 or termination for Cause as defined inSection 4(c), no further installments of this option shall become exercisable,and this option shall terminate (and may no longer be exercised) after thepassage of three months from the Employee’s last day of employment, but in noevent later than the scheduled expiration date. In such a case, the Employee’sonly rights hereunder shall be those which are properly exercised before thetermination of this option.

 

**                                               ****(b)**                                  **Termination for Cause****.**If the employment of the Employee is terminated forCause (as defined in Section 4(c)), this option shall terminate upon theEmployee’s receipt of written notice of such termination and shall thereafternot be exercisable to any extent whatsoever.

 

**                                               ****(c)**                                  **Definition of Cause****.**“Cause” shall mean conduct involving one or more ofthe following: (i) the substantial and continuing failure of the Employee,after notice thereof, to render services to the Company or Related Corporationin accordance with the terms or requirements of his or her employment; (ii) disloyalty,gross negligence, willful misconduct, dishonesty or breach of fiduciary duty tothe Company or Related Corporation; (iii) the commission of an act ofembezzlement or fraud; (iv) deliberate disregard of the rules or policiesof the Company or Related Corporation which results in direct or indirect loss,damage or injury to the Company or Related Corporation; (v) theunauthorized disclosure of any trade secret or confidential information of theCompany or Related Corporation; or (vi) the commission of an act whichconstitutes unfair competition with the Company or Related Corporation or whichinduces any customer or supplier to breach a contract with the Company orRelated Corporation.

 

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                                                **5.**                                      **Death; Disability****.**

 

**                                               ****(a)**                                  **Death****.** If the Employee dies while in the employ of theCompany or any Related Corporation, this option may be exercised, to the extentotherwise exercisable on the date of his or her death, by the Employee’sestate, personal representative or beneficiary to whom this option has beenassigned pursuant to Section 9, at any time within 180 days after thedate of death, but not later than the scheduled expiration date.

 

**                                               ****(b)****                                 ****Disability****.** If the Employee ceases to be employed by the Companyand all Related Corporations by reason of his or her disability (as defined inthe Plan), this option may be exercised, to the extent otherwise exercisable onthe date of the termination of his or her employment, at any time within180 days after such termination, but not later than the scheduledexpiration date.

 

**                                               ****(c)****                                 ****Effect of Termination****.**At the expiration of the 180-day period provided inparagraphs (a) or (b) of this Section 5 or the scheduled expiration date,whichever is the earlier, this option shall terminate (and shall no longer beexercisable) and the only rights hereunder shall be those as to which theoption was properly exercised before such termination.

 

                                                **6.**                                      **Partial Exercise****.**This option may be exercised in part at any time andfrom time to time within the above limits, except that this option may not beexercised for a fraction of a share unless such exercise is with respect to thefinal installment of stock subject to this option and cash in lieu of afractional share must be paid, in accordance with Paragraph 13(G) of the Plan,to permit the Employee to exercise completely such final installment. Anyfractional share with respect to which an installment of this option cannot beexercised because of the limitation contained in the preceding sentence shallremain subject to this option and shall be available for later purchase by theEmployee in accordance with the terms hereof.

 

                                                **7.**                                      **Payment of Price****.**(a) The option price shall be paid in thefollowing manner:

 

(i)                                     in cash or by check;

 

(ii)                                  subject to Section 7(b) below, bydelivery of shares of the Company’s Common Stock having a fair market value (asdetermined by the Committee) equal as of the date of exercise to the optionprice;

 

(iii)                               by delivery of an assignment satisfactoryin form****and substance to the Company of asufficient amount of the proceeds from the sale of the Option Shares and aninstruction to the broker or selling agent to pay that amount to the Company;or

 

(iv)                              by any combination of the foregoing.

 

**                                               ****(b)**                                  **Limitations on Payment byDelivery of Common Stock****.** If theEmployee delivers Common Stock held by the Employee (“Old Stock”) to theCompany in full or partial payment of the option price, and the Old Stock sodelivered is subject to restrictions or limitations imposed by agreement betweenthe Employee and the Company, an equivalent number of Option Shares shall besubject to all restrictions and limitations applicable to the

 

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Old Stock to the extent that the Employee paid for theOption Shares by delivery of Old Stock, in addition to any restrictions orlimitations imposed by this Agreement. Notwithstanding the foregoing, theEmployee may not pay any part of the exercise price hereof by transferringCommon Stock to the Company unless such Common Stock has been owned by theEmployee free of any substantial risk of forfeiture for at leastsix months.

 

                                                **8.**                                      **Method of ExercisingOption****.**Subjectto the terms and conditions of this Agreement, this option may be exercised bywritten notice to the Company at its principal executive office, or to suchtransfer agent as the Company shall designate. Such notice shall state theelection to exercise this option and the number of Option Shares for which itis being exercised and shall be signed by the person or persons so exercisingthis option. Such notice shall be accompanied by payment of the full purchaseprice of such shares, and the Company shall deliver a certificate orcertificates representing such shares as soon as practicable after the noticeshall be received. Such certificate or certificates shall be registered in thename of the person or persons so exercising this option (or, if this optionshall be exercised by the Employee and if the Employee shall so request in thenotice exercising this option, shall be registered in the name of the Employeeand another person jointly, with right of survivorship). In the event thisoption shall be exercised, pursuant to Section 5 hereof, by any person orpersons other than the Employee, such notice shall be accompanied byappropriate proof of the right of such person or persons to exercise thisoption.

 

                                                **9.**                                      **Option Not Transferable****.**This option is not transferable or assignable exceptby will or by the laws of descent and distribution. During the Employee’slifetime only the Employee can exercise this option.

 

                                                **10.**                               **No Obligation to ExerciseOption****.**Thegrant and acceptance of this option imposes no obligation on the Employee toexercise it.

 

                                                **11.**                               **No Obligation to ContinueEmployment****.**Neitherthe Plan, this Agreement, nor the grant of this option imposes any obligationon the Company or any Related Corporation to continue the Employee inemployment.

 

                                                **12.**                               **No Rights as Stockholderuntil Exercise****.**TheEmployee shall have no rights as a stockholder with respect to the OptionShares until such time as the Employee has exercised this option by deliveringa notice of exercise and has paid in full the purchase price for the shares soexercised in accordance with Section 8. Except as is expressly provided inthe Plan with respect to certain changes in the capitalization of the Company,no adjustment shall be made for dividends or similar rights for which therecord date is prior to such date of exercise.

 

                                                **13.**                               **Capital Changes andBusiness Successions****.**ThePlan contains provisions covering the treatment of options in a number ofcontingencies such as stock splits and mergers. Provisions in the Plan foradjustment with respect to stock subject to options and the related provisionswith respect to successors to the business of the Company are hereby madeapplicable hereunder and are incorporated herein by reference.

 

                                                **14.**                               **Early Disposition****.**The Employee agrees to notify the Company in writingimmediately after the Employee transfers any Option Shares, if such transferoccurs on or before the later of (a) the date two years after the date ofthis Agreement or (b) the date one year after the date the Employeeacquired such Option Shares. The Employee also agrees to provide the Companywith any information concerning any such transfer required by the Company fortax purposes.

 

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                                                **15.**                               **Withholding Taxes****.** If the Company or any Related Corporation in itsdiscretion determines that it is obligated to withhold any tax in connectionwith the exercise of this option, or in connection with the transfer of, or thelapse of restrictions on, any Common Stock or other property acquired pursuantto this option, the Employee hereby agrees that the Company or any RelatedCorporation may withhold from the Employee’s wages or other remuneration theappropriate amount of tax. At the discretion of the Company or RelatedCorporation, the amount required to be withheld may be withheld in cash fromsuch wages or other remuneration or in kind from the Common Stock or otherproperty otherwise deliverable to the Employee on exercise of this option. TheEmployee further agrees that, if the Company or any Related Corporation doesnot withhold an amount from the Employee’s wages or other remunerationsufficient to satisfy the withholding obligation of the Company or RelatedCorporation, the Employee will make reimbursement on demand, in cash, for theamount underwithheld.

 

                                                **16.**                               **Provision****of****Documentation****to****Employee****.** Bysigning this Agreement the Employee acknowledges receipt of a copy of thisAgreement and a copy of the Plan.

 

                                                **17.**                               **Miscellaneous****.**

 

**                                               ****(a)**                                  **Notices****.** All notices hereunder shall be in writing and shallbe deemed given when sent by certified or registered mail, postage prepaid,return receipt requested, to the address set forth below. The addresses forsuch notices may be changed from time to time by written notice given in themanner provided for herein.

 

**                                               ****(b)****                                 ****Entire Agreement;Modification****.**ThisAgreement constitutes the entire agreement between the parties relative to thesubject matter hereof, and supersedes all proposals, written or oral, and allother communications between the parties relating to the subject matter of thisAgreement. This Agreement may be modified, amended or rescinded only by a writtenagreement executed by both parties.

 

**                                               ****(c)**                                  **Severability****.**The invalidity, illegality or unenforceability of anyprovision of this Agreement shall in no way affect the validity, legality orenforceability of any other provision.

 

**                                               ****(d)****                                 ****Successors and Assigns****.**This Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns,subject to the limitations set forth in Section 9 hereof.

 

**                                               ****(e)**                                  **Governing Law****.** This Agreement shall be governed by and interpretedin accordance with the laws of the Delaware**,** withoutgiving effect to the principles of the conflicts of laws thereof.

 

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