**Exhibit 10.18**

 

**OMTOOL, LTD.**

**1997 STOCK OPTION PLAN**

**NOTICE OF ISO STOCK OPTIONAGREEMENT**

 

 
| [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:             | ISO    |   |   |   |
| Vesting Start  Date:    |   |   |   |   |
| Last Date to  Exercise: |   |   |   |   |

 

Vesting:

Subjectto the terms of the Plan set forth on the following pages, shares vestaccording to the following vesting schedule:

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

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

**Occurs** | ** ** | **Last Date to Exercise**         | ** ** |
|---------------------------------------------|------------|-----------------------------------------|------------|-----------------------------------|------------|-----------------------------------|------------|
|                                        |       |                                    |       |                              |       |                              |       |
| 3 month  anniversary of Vesting Start Date  |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 6 month  anniversary of Vesting Start Date  |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 9 month  anniversary of Vesting Start Date  |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 12 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 15 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 18 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 21 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 24 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 27 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 30 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 33 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 36 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 39 month anniversary  of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 42 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 45 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |
| 48 month  anniversary of Vesting Start Date |       | 6.25%                                   |       | Quarterly                         |       | 10th anniversary from  Grant Date |       |

 

INWITNESSOF, the Company and the Employee have caused this instrument to beexecuted as of date first above written.

 

 
|   |   |
|--------|--------|
|   |   | By: |   |   |
| [NAME] |   | Name: |
|   |   | Title: |
|        |        |  |  |  |

 

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                                                **1.**                                      **Grant Under 1997 StockPlan****.** This option is granted pursuant to and is governed by the Company’s 1997Stock Plan (the “Plan”) and, unless the context otherwise requires, terms usedherein shall have the same meaning as in the Plan.  Determinations made in connection with thisoption pursuant to the Plan shall be governed by the Plan as it exists on thisdate.

 

                                                **2.**                                      **Grant as Incentive StockOption; Other Options****.** This option is intended to qualify as anincentive stock option under Section 422 of the Internal Revenue Code of1986, as amended (the “Code”).  Thisoption is in addition to any other options heretofore or hereafter granted tothe 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 the Employee has continued to be employedby the Company or any Related Corporation on the following dates, the Employee mayexercise this option for the number of shares of Common Stock set opposite theapplicable 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 foregoing rights are cumulative and(subject to Sections 4 or 5 hereof if the Employee ceases to be employed by theCompany and all Related Corporations) may be exercised on or before the datewhich is 10 (ten) years from the date this option is granted.

 

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

 

**                                               ****(a)**                                  **Termination Other Than forCause****.** Ifthe Employee ceases to be employed by the Company and all Related Corporations,other than by reason of death or disability as defined in Section 5 ortermination for Cause as defined in Section 4(c), no further installments ofthis option shall become exercisable, and this option shall terminate (and mayno longer be exercised) after the passage of three months from the Employee’slast day of employment, but in no event later than the scheduled expirationdate.  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 theemployment of the Employee is terminated for Cause (as defined in Section4(c)), this option shall terminate upon the Employee’s receipt of writtennotice of such termination and shall thereafter not be exercisable to anyextent whatsoever.

 

**                                               ****(c)**                                  **Definition of Cause****. **“Cause”shall mean conduct involving one or more of the following: (i) thesubstantial and continuing failure of the Employee, after notice thereof, torender services to the Company or Related Corporation in accordance with theterms or requirements of his or her employment; (ii) disloyalty, grossnegligence, willful misconduct, dishonesty or breach of fiduciary duty to theCompany or Related Corporation; (iii) the commission of an act ofembezzlement or fraud; (iv) deliberate

 

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disregard of the rules or policies of the Company orRelated Corporation which results in direct or indirect loss, damage or injuryto the Company or Related Corporation; (v) the unauthorized disclosure ofany trade secret or confidential information of the Company or RelatedCorporation; or (vi) the commission of an act which constitutes unfaircompetition with the Company or Related Corporation or which induces anycustomer or supplier to breach a contract with the Company or RelatedCorporation.

 

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

 

**                                               ****(a)**                                  **Death****.**  If theEmployee dies while in the employ of the Company or any Related Corporation,this option may be exercised, to the extent otherwise exercisable on the dateof his or her death, by the Employee’s estate, personal representative orbeneficiary to whom this option has been assigned pursuant to Section 9,at any time within 180 days after the date of death, but not later thanthe scheduled expiration date.

 

**                                               ****(b)****                                 ****Disability****.**  If theEmployee ceases to be employed by the Company and all Related Corporations byreason of his or her disability (as defined in the Plan), this option may beexercised, to the extent otherwise exercisable on the date of the terminationof his or her employment, at any time within 180 days after suchtermination, but not later than the scheduled expiration date.

 

**                                               ****(c)****                                 ****Effect of Termination****. **At theexpiration of the 180-day period provided in paragraphs (a) or (b) of thisSection 5 or the scheduled expiration date, whichever is the earlier, thisoption shall terminate (and shall no longer be exercisable) and the only rightshereunder shall be those as to which the option was properly exercised beforesuch termination.

 

                                                **6.**                                      **Partial Exercise****. **Thisoption may be exercised in part at any time and from time to time within theabove limits, except that this option may not be exercised for a fraction of ashare unless such exercise is with respect to the final installment of stocksubject to this option and cash in lieu of a fractional share must be paid, inaccordance with Paragraph 13(G) of the Plan, to permit the Employee to exercisecompletely 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) Theoption price shall be paid in the following 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

 

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Option Shares and an instruction to the broker orselling 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 the Employee delivers Common Stock held bythe Employee (“Old Stock”) to the Company in full or partial payment of theoption price, and the Old Stock so delivered is subject to restrictions orlimitations imposed by agreement between the Employee and the Company, anequivalent number of Option Shares shall be subject to all restrictions andlimitations applicable to the Old Stock to the extent that the Employee paidfor the Option Shares by delivery of Old Stock, in addition to any restrictionsor limitations imposed by this Agreement. Notwithstanding the foregoing, the Employee may not pay any part of theexercise price hereof by transferring Common Stock to the Company unless suchCommon Stock has been owned by the Employee free of any substantial risk offorfeiture for at least six months.

 

                                                **8.**                                      **Method of ExercisingOption****. **Subject to the terms and conditions ofthis Agreement, this option may be exercised by written notice to the Companyat its principal executive office,  or tosuch transfer agent as the Company shall designate.  Such notice shall state the election toexercise this option and the number of Option Shares for which it is beingexercised and shall be signed by the person or persons so exercising thisoption.  Such notice shall be accompaniedby payment of the full purchase price of such shares, and the Company shalldeliver a certificate or certificates representing such shares as soon aspracticable after the notice shall be received. Such certificate or certificates shall be registered in the name of theperson or persons so exercising this option (or, if this option shall beexercised by the Employee and if the Employee shall so request in the noticeexercising this option, shall be registered in the name of the Employee andanother person jointly, with right of survivorship). In the event this optionshall be exercised, pursuant to Section 5 hereof, by any person or personsother than the Employee, such notice shall be accompanied by appropriate proofof the right of such person or persons to exercise this option.

 

                                                **9.**                                      **Option Not Transferable****. **Thisoption is not transferable or assignable except by will or by the laws ofdescent and distribution.  During theEmployee’s lifetime only the Employee can exercise this option.

 

                                                **10.**                               **No Obligation to ExerciseOption****. **The grant and acceptance of this optionimposes no obligation on the Employee to exercise it.

 

                                                **11.**                               **No Obligation to ContinueEmployment****. **Neither the Plan, this Agreement, nor thegrant of this option imposes any obligation on the Company or any RelatedCorporation to continue the Employee in employment.

 

                                                **12.**                               **No Rights as Stockholderuntil Exercise****. **The Employee shall have no rights as astockholder with respect to the Option Shares until such time as the Employeehas exercised this option by delivering a notice of exercise and has paid infull the purchase price for the shares

 

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so exercised in accordance with Section 8.  Except as is expressly provided in the Planwith respect to certain changes in the capitalization of the Company, noadjustment shall be made for dividends or similar rights for which the recorddate is prior to such date of exercise.

 

                                                **13.**                               **Capital Changes andBusiness Successions****. **The Plan contains provisions covering thetreatment of options in a number of contingencies such as stock splits andmergers.  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 Employeeagrees to notify the Company in writing immediately after the Employeetransfers any Option Shares, if such transfer occurs on or before the later of(a) the date two years after the date of this Agreement or (b) thedate one year after the date the Employee acquired such Option Shares.  The Employee also agrees to provide theCompany with any information concerning any such transfer required by theCompany for tax purposes.

 

                                                **15.**                               **Withholding Taxes****.**  If the Companyor any Related Corporation in its discretion determines that it is obligated towithhold any tax in connection with the exercise of this option, or inconnection with the transfer of, or the lapse of restrictions on, any CommonStock or other property acquired pursuant to this option, the Employee herebyagrees that the Company or any Related Corporation may withhold from theEmployee’s wages or other remuneration the appropriate 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.  The Employee further agrees that, if the Companyor any Related Corporation does not withhold an amount from the Employee’swages or other remuneration sufficient to satisfy the withholding obligation ofthe Company or Related Corporation, the Employee will make reimbursement ondemand, in cash, for the amount underwithheld.

 

                                                **16.**                               **Provision****of****Documentation****to****Employee****.**  By signing this Agreement the Employeeacknowledges receipt of a copy of this Agreement and a copy of the Plan.

 

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

 

**                                               ****(a)**                                  **Notices****.**  All noticeshereunder shall be in writing and shall be deemed given when sent by certifiedor registered mail, postage prepaid, return receipt requested, to the addressset forth below.  The addresses for suchnotices may be changed from time to time by written notice given in the mannerprovided for herein.

 

**                                               ****(b)****                                 ****Entire Agreement;Modification****. **This Agreement constitutes the entireagreement between the parties relative to the subject matter hereof, andsupersedes all proposals, written or oral, and all other communications betweenthe parties relating to the subject matter of this Agreement.  This Agreement may be modified, amended orrescinded only by a written agreement executed by both parties.

 

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**                                               ****(c)**                                  **Severability****. **Theinvalidity, illegality or unenforceability of any provision of this Agreementshall in no way affect the validity, legality or enforceability of any otherprovision.

 

**                                               ****(d)****                                 ****Successors and Assigns****. **ThisAgreement shall be binding upon and inure to the benefit of the parties heretoand their respective successors and assigns, subject to the limitations setforth in Section 9 hereof.

 

**                                               ****(e)**                                  **Governing Law****.**  This Agreementshall be governed by and interpreted in accordance with the laws of theDelaware**,** without giving effect to theprinciples of the conflicts of laws thereof.

 

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