Document:

Exhibit 10.54

 

EXECUTIVE

NONSTATUTORY STOCK OPTION

ACCEPTANCE LETTER

 

We are pleased to notify
you that FOCUS ENHANCEMENTS, INC., a Delaware corporation (the “Company”)
hereby grants to you a nonstatutory option (“Option”) under the Focus
Enhancements, Inc. 2002 Non-Qualified Stock Option Plan (the “Plan”) to
purchase all or any part of the shares (although no fractional shares may be
purchased) of the Common Stock of the Company (the “Optioned Shares”) as
described in your Notice of Grant of Stock Options and Option Agreement which
this letter is incorporated into and made part of (the Notice and this Letter,
collectively, the “Acceptance Letter”). 
A Nonstatutory Stock Option shall mean an option not described in Section 422
of the Internal Revenue Code of 1986, (the “Code”).

 

This Option cannot be
exercised unless you first sign this document in the place provided and return
it to the Secretary of the Company, Gary Williams.  However, your signing and delivering this
letter will not bind you to purchase any of the shares subject to the
Option.  Your obligation to purchase
shares can arise only when you exercise this Option in the manner set forth in
Paragraph 1 below.

 

EXCEPT AS EXPRESSLY SET
FORTH IN THIS ACCEPTANCE LETTER, THIS OPTION IS SUBJECT TO AND MAY BE
EXERCISED ONLY IN ACCORDANCE WITH THE PLAN. 
ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS LETTER.  A COPY OF THE PLAN IS ATTACHED AND IS
AVAILABLE FOR YOUR INFORMATION FROM THE COMPANY.

 

1.             Term
of Option and Exercise of Option. 
Subject to the provisions of the Plan and the terms and conditions of
this Acceptance Letter, this Option can be exercised by you during a period of
ten (10) years from the Grant Date.

 

Any portion of this
Option that you do not exercise shall accumulate and can be exercised by you at
any time prior to the expiration of ten (10) years from the Grant Date.

 

This Option may be
exercised by delivering to the Secretary of the Company full consideration for
an amount equal to the total option price of such shares, and a written notice
in a form satisfactory to the Company, signed by you specifying the number of
options you then desire to exercise.

 

Upon receipt of your
notice to exercise options, the Company will advise you of any additional
amount which may be due for federal and state taxes on the difference between
your option price and the current fair market value of the Company’s stock on
the exercise date.

 

Certificates for shares
so purchased will be issued as soon as practicable, but no fractional shares
shall be delivered.  As a holder of an
Option, you shall have the rights of a shareholder with respect to the shares
subject to this Option only after such shares shall have been issued to you
upon the exercise of this Option.

 

 

The Company shall not be
obligated to deliver any shares hereunder for such period as may be required by
it with reasonable diligence to comply with applicable federal or state
statutes, laws and regulations.

 

2.             Vesting
of Options.  If you continue to serve
the Company as an employee, officer, director, agent, advisor or consultant,
including services as a member of the board of advisors of the Company (such
service is described herein as maintaining or being involved in a “Business
Relationship” with the Company), then the Option shall vest in accordance with
the Notice of Grant of Stock Options.

 

The foregoing
notwithstanding, this Option shall become immediately exercisable with respect
to all the Option Shares purchasable hereunder if while the Optionee continues
to maintain a Business Relationship with the Company in the event of a change
of control as defined herein.  For
purposes of this agreement a “change in control” shall mean: (x) a merger or
consolidation of the Company with or into, or the acquisition of the Company
by, another entity (y) the sale of all or substantially all of the stock or
assets of the Company in a transaction or series of related transactions such
that the stockholders of the Company immediately prior to such event do not
immediately after giving effect to such event beneficially own voting
securities representing in the aggregate more than 50% of the combined voting
power of the voting securities of the surviving entity or the entity purchasing
such stock or assets (the “Surviving Entity”) or the members of the Board of
Directors of the Company immediately prior to such event do not immediately
after giving effect to such event constitute a majority of the Board of
Directors of the Surviving Entity.

 

3.             Termination
of Business Relationship.  Except as
set forth in this Letter and the Plan, if your Business Relationship with the
Company is terminated for any reason other than death or permanent disability,
this Option may be exercised within ninety (90) days of such event to the
extent that it was vested on the date of termination, but in no event may this
Option be exercised after ten (10) years from the Grant Date. 

 

4.             Death
or Permanent Disability.  If you die
or are permanently disabled while employed by the Company, this Option shall be
immediately and automatically accelerated and become fully vested and all
unexercised options shall be exercisable in whole or in part by the duly
authorized executor of your last Will or by the duly authorized administrator
or special administrator of your estate as the case may be within a period of
one (1) year, or for such longer period as the board may fix, but in no
event after ten (10) years from the Grant Date.  Your estate shall mean yourself or your legal
representative or any person who acquires the right to exercise an option, as
the case may be, by reason of your death or permanent disability.

 

5.             Non-transferability
of Option.  This Option shall not be
transferable except by Will or the laws of descent and distribution, and this
Option may be exercised during your lifetime only by you.  Any purported transfer or assignment of this
Option shall be void and of no effect, and shall give the Company the right to
terminate this Option as of the date of such purported transfer or assignment.

 

6.             Method
of Exercise.  This Option may be
exercised with respect to all or any part of any vested options by giving the
Company written notice of such exercise This written notice

 

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must be accompanied by payment, which may be (a) in United States
dollars in cash or by check, (b) in whole or in part shares of the Common
Stock of the Company already owned by the person or persons exercising the
option or (c) through the delivery of an assignment to the Company of a
sufficient amount of the proceeds from the sale of shares at the time of such
exercise.

 

As soon as practical
after receipt of such notice, and payment of any taxes due, the Company shall,
without transfer or issue tax or other incidental expense to you or your
successor, transfer and deliver thereto at the office of the Company or such
other place as may be mutually agreeable a certificate or certificates for such
shares of its common stock; provided, however, that the time of such delivery
may be postponed by the Company for such period as may be required for it with
reasonable diligence to comply with applicable registration requirements under
the Securities Exchange Act of 1934, as amended, any applicable listing
requirements of any national securities exchange, and requirements under any
other laws or regulations applicable to the issuance or transfer of such
shares.

 

7.             Adjustments
Upon Changes in Capitalization.  In
the event of any change in the outstanding Common Stock of the Company by
reason of stock dividends, recapitalization, mergers, consolidations, split-up,
combinations or exchanges of shares and the like, the aggregate number or class
of shares subject to this Option immediately prior to such event shall be
appropriately adjusted by the Board of Directors in accordance with the terms
of the Plan, and such adjustment shall be conclusive.

 

8.             Tax
Status.  Your treatment of shares
purchased pursuant to the exercise of the Option thereafter may have
significant tax consequences.  The
Company may withhold from your wages or other remuneration the appropriate
amount of federal, state and local taxes attributable to your exercise of any
installment of this Option.  You may wish
to consult your tax advisor with respect to the tax consequences to you upon
exercise of the Option or sale of the stock that you acquire pursuant to this
Option.

 

9.             No
Exercise of Option if Engagement or Employment Terminated for Cause. If
your Business Relationship is terminated for “Cause,” this Option shall
terminate on the date of such termination and this Option shall thereupon not
be exercisable to any extent whatsoever. 
“Cause” is conduct, as determined by the Board of Directors,
involving one or more of the following:  (i) gross
misconduct by you that is materially injurious to the Company; or (ii) the
commission of an act of embezzlement, fraud or deliberate disregard of the rules or
polices of the Company that results in material economic loss, damage or injury
to the Company; or (iii) the unauthorized disclosure of any trade secret or
confidential information of the Company or any third party who has a business
relationship with the Company or a violation of any noncompetition covenant or
assignment of inventions obligation with the Company; or (iv) the
commission of an act (other than voluntary resignation)  that induces any customer or prospective
customer of the Company to break a contract with the Company or to decline to
do business with the Company; or (v) the conviction of you of a felony
involving any financial impropriety or which would materially interfere with
your ability to perform your services or otherwise be injurious to the Company;
or (vi) your failure to follow any material policy or material
instructions of the Company, your supervisor or the Company’s CEO provided such
are

 

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lawful and not a violation of public policy. In making such
determination, the Board of Directors shall act fairly and in good faith.

 

In signing below, you
hereby agree to the terms of this Acceptance Letter and the Plan and
acknowledge receipt of a copy of the Plan.

 

	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (signature)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  (print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

4Exhibit 10.55

 

FOCUS
ENHANCEMENTS, INC.

EXECUTIVE

RESTRICTED STOCK

AGREEMENT

 

We are pleased
to notify you that FOCUS ENHANCEMENTS, INC., a Delaware corporation (the “Company”)
hereby grants to you a restricted stock award (“Award”) under the Focus Enhancements, Inc.
2004 Stock Incentive Plan (the “Plan”) to receive the shares of the Common
Stock of the Company (the “Award Shares”) as described in your Notice of Award
of Restricted Stock and this Restricted Stock Agreement.

 

EXCEPT AS
EXPRESSLY SET FORTH IN THIS RESTRICTED STOCK AGREEMENT, THE AWARD IS SUBJECT TO
AND MAY BE EXECUTED ONLY IN ACCORDANCE WITH THE PLAN.  ONLY CERTAIN PROVISIONS OF THE PLAN ARE
SUMMARIZED IN THIS RESTRICTED STOCK AGREEMENT. 
THE TERMS OF THE PLAN ARE INCORPORATED HEREIN BY REFERENCE.  IN THE EVENT OF ANY CONFLICT BETWEEN THE
PROVISIONS IN THIS RESTRICTED STOCK AGREEMENT AND THE PLAN, THE PROVISIONS IN
THE PLAN SHALL GOVERN.  A COPY OF THE
PLAN IS ATTACHED AND IS AVAILABLE FOR YOUR INFORMATION FROM THE COMPANY.

 

1.             Grant
of Award.  Subject to the terms of
this Restricted Stock Agreement and the Plan, the Company hereby grants to you
the Award for that number of shares of restricted stock set forth in the Notice
of Award of Restricted Stock.

 

2.             Nontransferability
of Award and Shares.  The Award shall
not be transferable (including by sale, assignment, pledge or hypothecation)
other than by will or the laws of intestate succession.  The designation of a beneficiary does not
constitute a transfer.  You shall not
sell, transfer, assign, pledge or otherwise encumber the shares subject to the
Award until all vesting requirements have been met.

 

3.             Shareholder
Rights.  Except as provided in Section 2,
you shall have all of the rights of a stockholder of the Company, including the
right to vote the shares and receive dividends and other distributions provided
that distributions in the form of stock shall be subject to the same
restrictions as the underlying restricted stock.

 

4.             Vesting
and Earning of Award.

 

(a)                                  If you continue to
serve the Company as an employee, officer, or director (such service is
described herein as maintaining or being involved in a “Service Relationship”
with the Company), then the Award shall vest in accordance with the Notice of
Award of Restricted Stock.

 

The foregoing
notwithstanding, this Award shall become immediately vested with respect to all
the Award Shares hereunder if while you continue to maintain a Service
Relationship with the Company a change of control as defined herein occurs.  For purposes of this Restricted Stock
Agreement a “change in control” shall mean: (i) any “person,” as such term
is used in Sections 13(d) and 14(d) of

 

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the Exchange
Act (other than the Company or any trustee or other fiduciary holding
securities under an employee benefit plan of the Company), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities; (ii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors, and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii) or (iv) of
this definition) whose election by the Board of Directors or nomination for
election by the Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof; (iii) the shareholders of the Company approve a
merger or consolidation of the Company with any other entity, other than (1) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no “person” (as hereinabove defined) acquires more than
50% of the combined voting power of the Company’s then outstanding securities;
or (iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets.

 

(b)                                 The Committee has sole
authority to determine whether and to what degree the Award has vested and been
earned and is payable and to interpret the terms and conditions of this
Restricted Stock Agreement and the Plan.

 

5.             Termination
of Employment.  In the event that
your Service Relationship with the Company is terminated for any reason, other
than death or disability as set forth in Section 6, and you have not yet
earned all or part of the Award pursuant to Section 4, then the Award, to
the extent not earned as of your termination date, shall be forfeited
immediately upon such termination, and you shall have no further rights with
respect to the Award or the Award Shares underlying that portion of the Award
that have not yet been earned and vested. 
You expressly acknowledge and agree that the termination of your Service
Relationship with the Company shall result in forfeiture of the Award and the
Award Shares to the extent the Award has not been earned and vested as of the
date of his termination of service or employment.

 

6.             Death
or Permanent Disability.  If your
Service Relationship with the Company is terminated due to death or disability
before the first anniversary of the Award Date, the entire Award is
forfeited.  If your employment with the
Company is terminated due to death or disability after the first anniversary of
the Award Date, a pro-rata portion of the Award Shares, to the extent that the
Award Shares are partially vested on the termination date, will be converted

 

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into Shares and issued to you or your legal
representatives, beneficiaries, or heirs, as the case may be.  In determining the pro-rata portion of the
Award Shares that are vested on the termination date, the Committee will
consider the number of months worked by you during the 12-calendar month period
immediately preceding the next anniversary of the Award Date under the
following formula:

 

	
  Number of Award Shares scheduled to vest on the next
  anniversary of the Award Date

  	
   

  	
  multiplied by

  	
   

  	
  [Number of calendar months worked by you during the
  12-month period immediately prior to the next anniversary of the Award Date]
  divided by 12

  

 

You will be deemed
to have worked a calendar month if you have worked any portion of that
month.  The Committee’s determination of
vested Award Shares shall be in whole Award Shares only and shall be binding on
you.

 

7.             Settlement
of Award.  The Company shall not be
obligated to deliver any shares hereunder for such period as may be required by
it in order to comply with applicable federal or state statutes, laws and
regulations.

 

8.             No
Acquired Rights.  You agree and
acknowledge that:

 

(a)                                  the Plan is
discretionary in nature and that the Company can amend, cancel, or terminate it
at any time;

 

(b)                                 the grant of this
Award under the Plan is voluntary and occasional and does not create any
contractual or other right to receive future grants of any Awards or benefits
in lieu of any Awards, even if Awards have been granted repeatedly in the past
and regardless of any reasonable notice period mandated under local law;

 

(c)                                  the value of this
Award is an extraordinary item of compensation which is outside the scope of
your employment contract, if any;

 

(d)                                 this Award is not part
of normal or expected compensation or salary for any purposes, including, but
not limited to, calculating termination, severance, resignation, redundancy,
end of service payments, bonuses, long-service awards, pension, retirement
benefits, or similar payments;

 

(e)                                  this Award shall
expire upon termination of your Service Relationship with the Company for any
reason except as may otherwise be explicitly provided in the Plan and this
Restricted Stock Agreement;

 

(f)                                    the future value of
the shares awarded under the Plan is unknown and cannot be predicted with
certainty;

 

(g)                                 no claim or
entitlement to compensation or damages arises from the termination of this
Award or diminution in value of this Award or Award Shares purchased under the
Plan and you irrevocably release the Company from any such claim; and

 

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(h)                                 your participation in
the Plan shall not create a right to further employment with the Company and
shall not interfere with the ability of the Company to terminate your
employment relationship at any time, with or without cause.

 

9.             Tax
Withholding.

 

(a)           The
Company will assess its requirements regarding tax, social security, and other
applicable taxes (“Tax Items”) in connection with the Award. These requirements
may change from time to time as laws or interpretations change. Regardless of
the Company’s actions in this regard, you acknowledge and agree that the
ultimate liability for Tax Items is your responsibility.  You acknowledge and agree that the Company
and/or your employer:

 

(i)            make
no representations or undertakings regarding the treatment of any Tax Items in
connection with any aspect of the Award, including the subsequent sale of Award
Shares acquired under the Plan; and

 

(ii)           do
not commit to structure the terms of the Award or any aspect of the Award to
reduce or eliminate your liability for Tax Items.

 

(b)           Prior
to the settlement of the Award, you must pay or make adequate provisions for
the withholding of Tax Items.  You
authorize the Company to collect the Tax Items by withholding from the delivery
of the Award Shares a whole number of shares with a value equal to or in excess
of the minimum withholding obligation for Tax Items. The amount withheld in
excess of the minimum withholding obligation for Tax Items should not exceed
the Fair Market Value of one share of Common Stock on the vesting date.  The Company or your employer will remit the
total amount withheld for Tax Items to the appropriate tax authorities. You
shall pay to the Company or your employer any amount of any Tax Items that the
Company or your employer may be required to withhold as a result of
participation in the Plan that cannot be satisfied by the means previously
described.

 

10.           Fractional
Award Shares.  In the event that the Award is settled in shares as set
forth in Section 7 and in the event that you are vested in a fractional
portion of an Award Share (a “Fractional Portion”), such Fractional Portion
shall not be converted into a share or issued to you.  Instead, the
Fractional Portion shall remain unconverted until the final vesting date for
the Award Shares; provided, however,
if a subsequent Fractional Portion is received by you prior
to the final vesting date for the Award Shares, it may be added to an existing Fractional
Portion accrued by you  under this Award such that the
resulting sum would be equal to or greater than a whole Share,
then such Fractional Portions shall be converted into one share; provided, further, that following such
conversion, any remaining Fractional Portion shall remain unconverted.  Upon the final vesting date, the value of any
remaining Fractional Portion(s) shall be paid in cash to you at the same time
as the conversion of the remaining Award Shares.

 

11.           Certificates.
As soon as practicable after the Notice of Award of Restricted Stock, the
Company shall issue stock certificates or request its transfer agent to hold
the shares in restricted book entry format with respect to the Award Shares
which will be registered in your name, and shall bear whatever legend or
restriction the Committee shall determine. Such Award Shares shall be held by
the Company or its transfer agent pending vesting. To the extent the

 

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Award Shares become vested, the Company shall
promptly provide you (or in the case of your death,  your designated beneficiary) the certificates
for the appropriate number of shares of Common Stock.

 

12.           Administration.  The authority to construe and interpret this
Restricted Stock Agreement and the Plan, and to administer all aspects of the
Plan, shall be vested in the Committee (as such term is defined in the Plan),
and the Committee shall have all powers with respect to this Restricted Stock
Agreement as are provided in the Plan. 
Any interpretation of the Restricted Stock Agreement by the Committee
and any decision made by it with respect to the Restricted Stock Agreement is
final and binding.

 

13.           Adjustments
Upon Changes in Capitalization.  In
the event of any change in the outstanding Common Stock of the Company by
reason of stock dividends, recapitalization, mergers, consolidations, split-up,
combinations or exchanges of shares and the like, the aggregate number or class
of shares subject to this Award immediately prior to such event shall be
appropriately adjusted by the Board of Directors in accordance with the terms
of the Plan, and such adjustment shall be conclusive.

 

14.           Superseding
Agreement; Binding Effect.  This
Restricted Stock Agreement supersedes any statements, representations or
agreements of the Company with respect to the grant of the Award or any related
rights, and you hereby waive any rights or claims related to any such
statements, representations or agreements. 
This Restricted Stock Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective executors,
administrators, next-of-kin, successors and assigns.

 

15.           Governing
Law.  Except as otherwise provided in
the Plan or herein, this Restricted Stock Agreement shall be construed and
enforced according to the laws of the State of Delaware, without regard to the
conflict of laws provisions of any state.

 

16.           Amendment
and Termination; Waiver.  Subject to
the terms of the Plan, this Restricted Stock Agreement may be modified or
amended only by the written agreement of the parties hereto.  The waiver by the Company of a breach of any
provision of the Restricted Stock Agreement by you shall not operate or be
construed as a waiver of any subsequent breach by you.

 

17.           Notices.  Except as may be otherwise provided by the
Plan, any written notices provided for in this Restricted Stock Agreement or
the Plan shall be in writing and shall be deemed sufficiently given if either
hand delivered or if sent by fax or overnight courier, or by postage paid first
class mail.  Notices sent by mail shall be
deemed received three business days after mailed but in no event later than the
date of actual receipt.  Notice may also
be provided by electronic submission, if and to the extent permitted by the
Committee.  Notices shall be directed, if
to you, at your address indicated by the Company’s records, or if to the
Company, at the Company’s principal office, attention Secretary.

 

18.           Severability.  The provisions of this Restricted Stock
Agreement are severable and if any one or more provisions may be determined to
be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions shall nevertheless be binding and enforceable.

 

5

 

19.           Counterparts;
Further Instruments. This Restricted Stock Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  The parties hereto agree to execute such
further instruments and to take such further action as may be reasonably
necessary to carry out the purposes and intent of this Restricted Stock
Agreement.

 

In signing
below, you hereby agree to the terms of this Restricted Stock Agreement and the
Plan and acknowledge receipt of a copy of the Plan.

 

	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (signature)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  (print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

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