-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EnOil4N7nXKV7imy+4/9dXxccXsuVflNMNoIuoSsep4MDm3qnuhORE8CXJeXPxCM qT28ZdVsCh7o6Q4Mlloo8g== 0000931467-95-000012.txt : 19951004 0000931467-95-000012.hdr.sgml : 19951004 ACCESSION NUMBER: 0000931467-95-000012 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19951002 SROS: NYSE SROS: PSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DDL ELECTRONICS INC CENTRAL INDEX KEY: 0000026987 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 330213512 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-15784 FILM NUMBER: 95578075 BUSINESS ADDRESS: STREET 1: 7320 SW HUNZIKER ROAD #300 CITY: TIGARD STATE: OR ZIP: 97223-2302 BUSINESS PHONE: 5036201789 MAIL ADDRESS: STREET 1: 7320 SW HUNZIKER ROAD #300 CITY: TIGARD STATE: OR ZIP: 97223-2302 FORMER COMPANY: FORMER CONFORMED NAME: DATA DESIGN LABORATORIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DATA DESIGN LABORATORIES DATE OF NAME CHANGE: 19880817 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COOK WILLIAM E CENTRAL INDEX KEY: 0000940403 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 14775 S W PEACHTREE DRIVE CITY: TIGARD STATE: OR ZIP: 97224 BUSINESS PHONE: 5035903588 MAIL ADDRESS: STREET 1: DDL ELECTRONICS INC STREET 2: 1270 NW 167TH PLACE CITY: BEAVERTON STATE: OR ZIP: 97006 SC 13D/A 1 AMENDMENT NO. 1 TO SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* DDL Electronics, Inc. --------------------- (Name of Issuer) Common Stock --------------------- (Title of Class of Securities) 233167 10 5 ----------- (CUSIP Number) William E. Cook, 14775 Peachtree Drive, Tigard, Oregon 97224, (503) 590-3588 ---------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 31, 1995 ------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box ____. Check the following box if a fee is being paid with the statement: ____. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies should be sent. *The remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 Schedule 13D CUSIP No. 233167 10 5 Page 2 of 3 Pages 1. Name of reporting person S.S. or I.R.S. identification no. of above person William E. Cook 2. Check the appropriate box if a member of a group* (a) ____ (b) ____ 3. SEC use only ___________________________________________________________________________ 4. Source of funds* PF 5. Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) _____ 6. Citizenship or place of organization U.S. Citizen 7. Number of shares beneficially owned by each reporting person with sole voting power 880,262 8. Number of shares beneficially owned by each reporting person with shared voting power Not applicable 9. Number of shares beneficially owned by each reporting person with sole dispositive power 880,262 10. Number of shares beneficially owned by each reporting person with shared dispositive power Not applicable 11. Aggregate amount beneficially owned by each reporting person 880,262 12. Check box if the aggregate amount in Row (11) excludes certain shares* ____ Not applicable 13. Percent of class presented by amount in Row (11) 5.53% 3 CUSIP No. 233167 10 5 Page 3 of 3 Pages 14. Type of reporting person* IN *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 4 Item 1. Security and Issuer This schedule relates to shares of common stock, $.01 par value, of DDL Electronics, Inc., a Delaware corporation (the "Company"), whose principal executive offices are located at 7320 S.W. Hunziker Road, Suite 300, Tigard, Oregon 97223. Item 2. Identity and Background (a) The name of the person filing this schedule is William E. Cook. (b) Mr. Cook's address is 14775 Peachtree Drive, Tigard, Oregon 97224. (c) Mr. Cook's present principal occupation is to acquire, own, hold, and dispose of investments for his own account. (d) During the past five years, Mr. Cook has not been convicted in any criminal proceeding. (e) During the past five years, Mr. Cook has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Cook is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration Mr. Cook has financed, and will continue to finance, the exercise of the options described in Item 6 with personal funds. Item 4. Purpose of Transaction The purpose of this transaction is to exercise the options described in Item 6 until Mr. Cook has exercised all such options before they terminate under the 1991 Option Agreement (described below), as superseded by the 1993 Option Agreement (described below), the agreements under which the Company granted such options to Mr. Cook, and then to dispose of all or substantially all of the shares acquired thereby primarily through open market sales. Except as set forth above, Mr. Cook does not have any plans or proposals which relate to or would result in any of the matters described in subparagraphs (a) through (j) of this Item 4. Item 5. Interest in Securities of the Issuer (a) Mr. Cook is the beneficial owner in the aggregate of 880,262 shares of the common stock, $.01 par value, of the Company of which he is the owner and holder of record of 190,800 shares and of which he has the option to purchase 689,462 shares, representing in the aggregate 5.53% of such class. (b) Mr. Cook has the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of 190,800 shares of common stock, $.01 par value, of the Company and, upon exercise of all of the options to purchase 880,262 shares of such common stock, he will also have the sole power to vote or direct the vote and sole power to dispose or direct the disposition of such shares of common stock acquired thereby. Mr. Cook is not the beneficial owner of any shares of stock in which he shares the power to 5 vote or to direct the vote or shares the power to dispose or direct the disposition. (c) Mr. Cook effected the following transactions in the shares of common stock, $.01 par value, of the Company during the past 60 days: (1) On August 1, 1995, he exercised options to purchase 50,000 shares of such common stock at $.50 per share, and (2) On July 26, 1995, he sold 12,500 shares of such common stock at $1.625 per share, on July 27, 1995, 2,000 shares at $1.625 per share, on July 31, 1995, 30,000 shares at $1.875 per share, on August 1, 1995, 1,000 shares at $2.00 per share, on August 2, 1995, 7,700 shares at $2.00 per share, on August 4, 1995, 1,500 shares at $1.875 per share, on August 8, 1995, 15,500 shares at $2.00 per share, on August 18, 1995, 15,000 shares at $1.875 per share, and on September 14, 1995, 10,000 shares at $2.00 per share (all of which sales were open market sales). (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. On December 3, 1991, Mr. Cook and the Company entered into a General Nonstatutory Stock Option Agreement (the "1991 Option Agreement"), by the terms of which the Company granted to him options to purchase 596,992 shares of its common stock at $.50 per share. Certain antidilution provisions of the 1991 Option Agreement required that the Company grant additional options to Mr. Cook upon the occurrence of specific events. The Company, pursuant to these provisions, granted to Mr. Cook an additional 493,287 options. In 1993, the Company terminated the 1991 Option Agreement and in its place adopted the 1993 Stock Incentive Plan and 1993 Nonemployee Director Stock Option Plan. It also entered into a separate stock option agreement with Mr. Cook which incorporated the antidilution provisions contained in the 1991 Option Agreement (the "1993 Option Agreement"). The Company granted to Mr. Cook an additional 4,183 options under the 1993 Option Agreement. In summary, the Company granted to Mr. Cook 1,094,462 options. Mr. Cook as of the date of this schedule has exercised 405,000 options under the 1991 Option Agreement, as superseded by the 1993 Option Agreement, and has sold 214,200 shares acquired thereby. Item 7. Material to Be Filed as Exhibits (a) 1993 Stock Incentive Plan and 1993 Non-Employee Directors Stock Option Plan (incorporated by reference to Exhibits 4.7 and 4.8 to the Issuer's Registration Statement on Form S-8, Commission File No. 33-74400). (b) DDL Electronics, Inc. Stock Option Agreement 1993 Stock Incentive Plan between DDL Electronics, Inc. and Mr. Cook dated January 10, 1994. (c) Schedule 13D filed by Mr. Cook on January 21, 1994. 6 Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. September 30, 1995 /s/ William E. Cook - ----------------------------- ------------------------------------- Date Signature William E. Cook ------------------------------------- Name/Title The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of this filing person), evidence of the representative's authority to sign on behalf of such person shall be filed with the statement, provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name of any title of each person who signs the statement shall be typed or printed beneath his signature. Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001). 7 EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE - ------- ----------- ---- 99.1 DDL Electronics, Inc. Stock Option Agreement 1993 Stock Incentive Plan between DDL Electronics, Inc. and William E. Cook dated January 10, 1994 99.2 Schedule 13D filed by William E. Cook on January 21, 1994
EX-99.1 2 1 Option Grant Date: January 10, 1994 Number of Shares: 1,431 shares Exercise Price: $.50 per share Vesting Schedule: * in ____ equal annual installments commencing on the first anniversary of the Option Grant Date Term: * Insert term into paragraph 3 below DDL ELECTRONICS, INC. STOCK OPTION AGREEMENT 1993 STOCK INCENTIVE PLAN This Stock Option Agreement (this "Agreement") is made effective as of the Option Grant Date set forth above by and between DDL Electronics, Inc., a Delaware corporation (the "Company"), and the optionee named below ("Optionee"). The parties agree as follows: 1. Governing Plan. Optionee has received a copy of the DDL Electronics, Inc. 1993 Stock Incentive Plan (the "1993 Plan"). This Agreement is subject in all respects to the applicable provisions of the 1993 Plan which are incorporated herein by reference, and in the case of any conflict between the provisions of the 1993 Plan and this Agreement, the provisions of the 1993 Plan shall be controlling. 2. Grant of Option. The Company hereby grants to Optionee a nonstatutory stock option (the "Option") to purchase the number of shares of the Company's Common Stock set forth above. The Exercise Price for such Option shall be paid in cash, unless otherwise determined by the Board of Directors or Committee administering the 1993 Plan. 3. Term and Termination. The Option shall expire on the earliest of (i) ninety (90) days from the date on which Optionee ceases to be an employee or consultant of the Company or its subsidiaries for any reason; or (ii) the ____ anniversary of the Option Grant Date. If Optionee ceases for any reason to be an employee or consultant of the Company or its subsidiaries, that portion of the Option which has not yet become exercisable shall be terminated, unless the Board of Directors or Committee administering the 1993 Plan in its discretion accelerates the vesting of the Option (in which case it may impose whatever conditions it considers appropriate on the accelerated portion).* 4. Non-Assignability. Options granted under the 1993 Plan may not be sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred or alienated in any manner, either voluntarily or involuntarily or by the operation of law, other than by will or laws of descent and distribution, and may be exercised during the lifetime of the Optionee only by such Optionee. 5. Governing Law. This Agreement shall be governed by, interpreted under and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choice of laws, of the State of California applicable to agreements made and to be performed wholly within the State of California. * See Attached Amendment 2 IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement effective as of the date first written above. DDL ELECTRONICS, INC. OPTIONEE By: /s/ Alan Steel /s/ William E. Cook ------------------------ ----------------------------- Signature Signature Alan R. Steel William E. Cook - --------------------------- ----------------------------- Printed Name Printed Name Vice President 1270 N.W. 167th Place, Beaverton, OR 97006 - --------------------------- ------------------------------------------ Title Street Address, City, State, Zip Code 3 DDL ELECTRONICS, INC. STOCK OPTION AGREEMENT 1993 STOCK INCENTIVE PLAN Amendment to Stock Option Agreement for antidilution options granted pursuant to the 1991 Nonstatutory Stock Option Agreement: 1. Number of Shares. This Stock Option Agreement covers the indicated number of shares plus options granted in the future pursuant to the antidilution provisions of the 1991 Nonstatutory Stock Option Agreement between the Company and Optionee. 2. Term and Termination. Notwithstanding the provisions of this paragraph, antidilution options will have the name vesting, exercise and termination terms as stated in the related 1991 Nonstatutory Stock Option Agreement. IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement effective as of the date first written above. DDL ELECTRONICS, INC. OPTIONEE By: /s/ Alan Steel /s/ William E. Cook ------------------------ ----------------------------- Signature Signature Alan R. Steel William E. Cook - --------------------------- ----------------------------- Printed Name Printed Name Vice President 1270 N.W. 167th Place, Beaverton, OR 97006 - --------------------------- ------------------------------------------ Title Street Address, City, State, Zip Code EX-99.2 3 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. __)* DDL Electronics, Inc. (formerly Data-Design Laboratories, Inc.) --------------------------------------------------------------- (Name of Issuer) Common Stock --------------------- (Title of Class of Securities) 233167 10 5 ----------- (CUSIP Number) William E. Cook, 1270 N.W. 167th Place, Beaverton, OR 97006 (503/645-3807) -------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 30, 1992 --------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box ____. Check the following box if a fee is being paid with the statement: __x__. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies should be sent. *The remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). This Schedule 13D contains 017 sequentially numbered pages. The exhibit index appears at sequentially numbered page 005. 2 Schedule 13D 1. Name of reporting person S.S. or I.R.S. identification no. of above person William E. Cook, President of DDL Electronics, Inc. 1270 N.W. 167th Place, Beaverton, OR 97006 2. Check the appropriate box if a member of a group* (a) ____ (b) ____ 3. SEC use only ___________________________________________________________________________ 4. Source of funds* PF 5. Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) _____ Not Applicable 6. Citizenship or place of organization USA 7. Number of shares beneficially owned by each reporting person with sole voting power 1,093,814 8. Number of shares beneficially owned by each reporting person with shared voting power Not Applicable 9. Number of shares beneficially owned by each reporting person with sole dispositive power 1,093,814 10. Number of shares beneficially owned by each reporting person with shared dispositive power Not Applicable 11. Aggregate amount beneficially owned by each reporting person 1,093,814 12. Check box if the aggregate amount in Row (11) excludes certain shares* ____ Not Applicable 3 13. Percent of class presented by amount in Row (11) 7.6% 14. Type of reporting person* IN *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 4 Item 1. Security and Issuer. This Statement relates to shares of Common Stock, $.01 par value, of DDL Electronics, Inc., formerly Data-Design Laboratories, Inc., a Delaware corporation (the "Company"), whose principal executive offices are located at 1270 N.W. 167th Place, Beaverton, Oregon 97006. Item 2. Identity and Background. (a) The name of the person filing this Statement is William E. Cook. (b) Mr. Cook's address is DDL Electronics, Inc., 1270 N.W. 167th Place, Beaverton, OR 97006. (c) The present principal occupation of Mr. Cook is President and Chief Executive Officer of DDL Electronics, Inc. DDL Electronics, Inc. performs electronic manufacturing and printed circuit board fabrication services in Beaverton, Oregon, Chatsworth, California and in Northern Ireland. Mr. Cook is also a director of the Company. (d) During the last five years, Mr. Cook has not been convicted in a criminal proceeding. (e) During the last five years, Mr. Cook has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Cook is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration. Mr. Cook currently anticipates that any exercise of the options described in Item 6 would be financed through the use of personal funds. Since the options are exercisable at a price of $.50 per shares, and since the options cover 1,093,814 shares of the Company's Common Stock, Mr. Cook would require the sum of $546,907 to exercise all such options. Item 4. Purpose of Transaction. Mr. Cook currently anticipates that any shares of the Company's Common Stock obtained through the exercise of the options described in Item 6 would be acquired for investment purposes. Except with respect to the possible exercise of such options, Mr. Cook does not have any plans or proposals that relate to or would result in the matters described in paragraphs (a)-(j) of Item 4 to Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) Mr. Cook is deemed to beneficially own an aggregate of 1,093,814 shares of Common Stock, $.01 par value, of the Company, representing 7.6% of the class. All such shares relate to an option granted to Mr. Cook to purchase an aggregate of 1,093,814 shares of the Company's Common Stock. 5 (b) Not applicable at this time. Upon exercise, Mr. Cook intends to retain the sole power to vote and dispose of all shares of the Company's Common Stock then owned by Mr. Cook. (c) No transactions in the Company's Common Stock have been affected by Mr. Cook in the past 60 days. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. On December 3, 1991, Mr. Cook was granted an option to purchase 596,992 shares of the Company's Common Stock. Such option has been increased to 1,093,814 shares of Common Stock pursuant to anti-dilution provisions of the related General Nonstatutory Stock Option Agreement (the "Agreement"). One- half of the originally granted options become exercisable on December 3, 1991, 25% on June 30, 1992 and 25% on June 30, 1993. Anti-dilution options became exercisable retroactively or prospectively in the same proportion when issued. None of these options have been exercised to date. One-half of the options terminate on December 3, 1996, 25% on June 30, 1997 and 25% on June 30, 1998. In the future, additional options may be granted pursuant to the Agreement, which options will have the exercise and termination characteristics described in this Item 6. Item 7. Material to Be Filed as Exhibits. (a) General Nonstatutory Stock Option Agreement dated December 3, 1991 by and between the Company and William E. Cook. Signature --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. 1/10/94 /s/ William E. Cook - ----------------------------- ------------------------------------- Date Signature 6 EXHIBIT INDEX ------------- SEQUENTIALLY NUMBERED PAGE WHERE EXHIBIT CAN BE FOUND OR IS INCORPORATED BY EXHIBIT NUMBER DESCRIPTION REFERENCE - -------------- ----------- --------------------- 1 General Nonstatutory Stock Option 006 Agreement dated December 3, 1991, by and between Data-Design Laboratories, Inc. (now known as DDL Electronics, Inc.), a Delaware corporation, and William E. Cook. 7 EXHIBIT A DATA-DESIGN LABORATORIES, INC. GENERAL NONSTATUTORY STOCK OPTION AGREEMENT This Stock Option Agreement ("Agreement") is made effective as of the 3rd day of December, 1991, by and between Data-Design Laboratories, Inc., a Delaware corporation ("Company"), and William E. Cook ("Optionee"). STATEMENT OF BACKGROUND FACTS The Board of Directors of the Company ("Board") has, pursuant to its duly adopted Resolutions of December 3, 1991, established the Data-Design Laboratories, Inc. General Nonstatutory Stock Option Plan ("Plan") and has granted full authority to the Compensation Committee of the Board ("Committee") to make grants under the Plan. Solely to induce the Optionee to agree to employment by the Company pursuant to the terms of an Employment Agreement dated December 3, 1991 ("Employment Agreement"), the Committee, by action taken on December 3, 1991 ("Grant Date"), granted to the Optionee an option under the Plan ("Option") to purchase shares of the common stock of the Company ("Common Stock") in the amounts and on the terms and conditions set forth herein. This Agreement, the form of which was approved by the Committee, is intended to memorialize the terms and conditions upon which the Committee granted the Option to the Optionee. In consideration of the foregoing and of the mutual covenants set forth herein and other good and valuable consideration, the parties hereto agree as set forth below. AGREEMENT 1. The Option. ---------- (a) The Optionee may, at the Optionee's option and subject to the terms and conditions set forth herein, purchase under the Plan all or any part of an aggregate of 596,992 shares of Common Stock ("Option Shares"), representing 9% of the Company's currently issued and outstanding shares of Common Stock, at the 8 price per share set forth in Section 2(a) below and subject to adjustment as provided in Section 2(c) below. 2. Exercise of Option. ------------------ (a) Option Price and Vesting. The Option shall vest and be exercisable at $.50 per share ("Option Price") (such price being equal to the lowest closing price of the Company's Common Stock during the thirty (30) day period immediately preceding the date hereof) as to the percentage of the Option Shares on and after the start dates and on or before the termination dates set forth below ("Exercise Periods"): Exercise Periods % of Option ---------------- Shares Start Termination ----------- ----- ----------- 50% December 1, 1991 December 3, 1996 25% June 30, 1992 June 30, 1997 25% June 30, 1993 June 30, 1998 Notwithstanding the foregoing, in the event that, prior to December 3, 1992, the Optionee's employment with the Company is terminated as a result of either of his voluntary resignation (as defined in Section 4(b) of the Employment Agreement) or an involuntary termination for Cause (as defined in Section 4(c) of the Employment Agreement), then the 50% vested portion of the Option shall be automatically reduced to the lower vested percentage ("Revised Percentage") calculated as follows: (50%) times (No. of days the Optionee was employed by the Company divided by 365) In the event the Revised Percentage becomes applicable but the Optionee has previously exercised his Option as to a larger percentage than the Revised Percentage, then the Company or its designee shall have the right and option, exercisable within 30 days of the Optionee's employment termination, to repurchase the Option Shares attributable to the difference between the Revised Percentage and the percentage previously exercised by the Optionee at the original Option Price. (b) Option Exercise. The Option may be exercised when installments vest as indicated by the start dates in Section 2(a) above with respect to all or part of the Option Shares covered by such vested installments, 2 9 subject, however, to further restrictions contained in this Agreement. In the event that the Optionee shall exercise the Option for less than the full number of Option Shares included within the vested installment at the time of exercise, the Optionee shall be entitled to exercise the Option (in one or more subsequent increments) for the balance of the Option Shares included in such vested installment. In no event shall the Optionee be entitled to exercise the Option for fractional shares of Common Stock or for a number of shares exceeding the maximum number of Option Shares. The Optionee acknowledges that the Optionee has no right whatsoever to exercise the Option granted hereunder with respect to any Option Shares unless and until the right to exercise the Option with respect to such Option Shares has vested as provided above. (c) Option Adjustments. (i) Except as provided otherwise in subparagraphs (ii), (iii) and (iv) below, if the outstanding shares of Common Stock of the Company are increased, decreased, changed into or exchanged for a different number or kind of shares of the Company through reorganization, recapitalization (other than as a result of the conversion, exchange or exercise of the Company's currently outstanding securities or options or the sale of new shares of Common Stock or new securities convertible into shares of Common Stock), reclassification, stock dividend, stock split or reverse stock split, an appropriate and proportionate adjustment shall be made in the number or kind of shares and the per share Option Price thereof subject to this Option; provided, however, that no such adjustment need be made if, upon the advice of counsel, the Board or the Committee determines that such adjustment may result in the receipt of federally taxable income to the Optionee, to holders of other derivative securities of the Company or holders of Common Stock or other classes of the Company's securities. (ii) If, at any time or from time to time after the date hereof and until December 2, 1994, any holder of the Company's currently outstanding 7% Convertible Subordinated Debentures due 2001 or the Company's 8 1/2% Convertible Subordinated Debentures due 2008 (together, the "Debentures") converts or exchanges any of such Debentures into shares of Common Stock of the Company, securities convertible into shares of Common Stock of the Company ("Convertible 3 10 Securities") and/or preferred stock participating in the profits of the Company on a basis which is substantially similar to that of Common Stock ("Participating Preferred"), then the number of Option Shares which the Optionee shall be entitled to purchase pursuant to this Option shall be increased by that number of shares of Common Stock equaling: nine percent (9%) of the lesser of (a) the number of shares of Common Stock into which any such Debentures are actually converted or exchanged plus the number of shares of Common Stock into which any new Convertible Securities which are actually issued by the Company in conjunction with such Debenture conversion or exchange are themselves convertible plus the number of shares of Participating Preferred actually issued in conjunction with such Debenture exchange or conversion, or (b) two (2) times the number of shares of Common Stock into which the Debentures that are actually converted or exchanged were originally convertible pursuant to the terms of such Debentures as in effect on the date hereof. In addition, in the event that, in connection with such Debenture exchange or conversion, equity or debt securities are issued ("PIK Securities"), whose dividends or interest are payable, as a whole or in part, by shares of Common Stock, then if, when and to the extent shares of Common Stock ("PIK Shares") are actually issued in respect of PIK Securities between the date of the issuance of the PIK Securities and the date the Optionee makes his Final Exercise (as defined in subparagraph (iii) below), the number of Option Shares which the Optionee shall be entitled to purchase pursuant to this Option shall be increased by nine percent (9%) of the number of such PIK Shares which are issued; provided, however, that the adjustment to the number of Option Shares under all provisions of this subparagraph (ii) shall in no event exceed two (2) times the number of shares of Common Stock into which the Debentures that are actually converted or exchanged were originally convertible pursuant to the terms of such Debentures as in effect on the date hereof. (iii) If, at any time or from time to time, any holder of an option to purchase Common Stock which is outstanding on the date hereof (other than the Option granted pursuant to this Agreement) with an exercise price of less than $1.00 per share ("Recent 4 11 Options") exercises such option, then the number of Option Shares which the Optionee shall be entitled to purchase pursuant to this Option shall be increased by that number of shares of Common Stock equaling nine percent (9%) of the number of shares of Common Stock actually issued upon the exercise of such Recent Options. In addition, at the time the Optionee exercises his final vested installment ("Final Exercise") (whether such final installment be the last 25% installment vesting June 30, 1993 or, because of an employment termination prior to June 30, 1993, some prior vested installment), the number of Option Shares which the Optionee shall be entitled to purchase pursuant to this Option shall be increased by that number of shares of Common Stock subject to "Unexercised, In-The-Money Recent Options" on the date of Final Exercise. "Unexercised, In-The-Money Recent Options" shall mean those Recent Options outstanding on the date of Final Exercise which (a) have not yet been exercised, (b) have not been cancelled due to the recipient's employment termination or otherwise, and (c) have an exercise price which is equal to or lower than the closing price of the Company's Common Stock on the business day immediately preceding the date of Final Exercise. (iv) Notwithstanding the foregoing, upon the date of termination of the Optionee's employment with the Company for any reason, the provisions set forth in subparagraphs (ii) and (iii) of this Section 2 shall no long remain in effect, and the Optionee shall no longer be entitled to the protection afforded by such provisions; provided, however, that in the event that Cook's employment is involuntarily terminated by the Company without Cause (as defined in Section 4(c) of the Employment Agreement), the provisions of subparagraph (ii) of this Section 2 shall remain in effect until ninety (90) days after the date of the Optionee's employment termination at which time the specific protections of subparagraph (ii) shall terminate. (v) Example #1. Facts: No Recent Options have been exercised and no stock splits or similar "automatic adjustment" events have occurred. In 1993 and while the Optionee is employed by the Company, an exchange offer is consummated with some but not all of the holders of 5 12 the Debentures. As a result of that exchange transaction, the holders of Debentures which are currently convertible into 2,500,000 shares of Common Stock of the Company exchange their Debentures for: - 1,000,000 shares of Common Stock; - Warrants for 7,000,000 shares of Common Stock; and - Non-convertible promissory notes of the Company for a specified amount. As a result of the provisions of paragraph (ii) above, the Optionee's number of Option Shares would equal: 596,992 plus (9% of 5,000,000) Example #2: No exchange has been made as to the Debentures and no stock splits or comparable events have occurred. The Optionee fully exercises his final vested installment of 25% in June 1998. Of the Recent Options (which, as of December 3, 1991, covered 309,000 shares of Common Stock), options covering 109,000 shares have been cancelled due to employee terminations and options covering 200,000 shares are "in the money" (i.e., the closing price of the Company's shares on the business day before the date of Final Exercise exceeded the option or strike price of the Recent Options). No outstanding Recent Options are not "in the money" and no Recent Options have been exercised. At the time of the Optionee's final exercise as to the last 25% installment of his Option, and as a result of the provisions of paragraph (iii) above, the Optionee's number of Option Shares would equal: 596,992 plus (9% of 200,000). (d) Manner of Exercise. The Option shall be exercised by giving to the Company written notice thereof during any applicable Exercise Period, and specifying in such notice the number of Option Shares with respect to which such Option is being exercised. 3. Termination of Option Because of Employment Termination. The Option shall terminate before the applicable start dates set forth in Section 2 above in the following circumstances: (a) Death or Disability. If the Optionee's employment by the Company is terminated by reason of the 6 13 death or "disability" (as defined in the Employment Agreement) of the Optionee, then: (i) the Exercise Periods shall end on the applicable termination dates specified in Section 2(a) above; and (ii) the Optionee or legal representative (in the case of disability) or the Optionee's executor or administrator, or the person or persons to whom the Option's rights under this Option shall pass by will or by the applicable laws of descent and distribution (in the case of death), may exercise the unexercised portion (or any lesser amount) of the Option, only to the extent that it was vested and therefore exercisable by the Optionee under Section 2 on the date of such employment termination. (b) Other Termination. If the Optionee's employment by the Company is terminated for any reason other than death or disability as provided above, then: (i) the Exercise Periods shall end on the applicable termination dates set forth in Section 2(a) hereof; and (ii) the Option shall be exercisable only to the extent that it was vested and therefore exercisable by the Optionee under Section 2 on the date of such termination of employment. 4. Termination of Option Because of Other Grants. In the event that the Committee approves the grant of any new options to purchase shares of Common Stock under the Plan to any person commencing employment with the Company subsequent to the date hereof (a "New Employee"), the grant of options to whom was recommended to the Committee by the Optionee because of the need for additional management in the turn-around team, the Optionee shall be required to surrender for cancellation options covering that number of shares subject to the Option equal to the number of shares approved by the Committee to be granted to any such New Employee. Upon cancellation of any such Option Shares, such shares shall be available for grant to any such New Employee by the Committee. It is understood that options under the Plan will be granted solely to induce the New Employee to agree to employment by the Company pursuant to the terms of an employment agreement. 7 14 5. Accelerated Vesting. Upon the occurrence of an "Acceleration Event" prior to June 30, 1993, the shares of Common Stock subject to installments of the Option which have not yet vested pursuant to Section 2(a) hereof will automatically vest on the closing date of such Acceleration Event. For purposes of this paragraph, "Acceleration Event" means: (a) a sale of all or substantially all of the Company's assets; (b) a sale to one person or entity, or two or more persons or entities acting in concert, (other than to TBM Associates, Inc. and/or Alan Patricof Associates or an affiliate of or fund managed by either of them, or in connection with the conversion or exchange of the Debentures) of equity securities of the Company representing more than 25% of the aggregate voting power of all outstanding equity securities of the Company; (c) the dissolution or liquidation of the Company; or (d) a merger, consolidation or other reorganization of the Company (other than a reincorporation of the Company or a reorganization described in Section 368(a)(1)(F) of the Internal Revenue Code) with one or more other corporations as a result of which the Company goes out of existence or becomes a subsidiary of another corporation shall own, directly or indirectly, more than 50% of the aggregate voting power of all outstanding equity securities of the Company). 6. Delivery of Certificates. As soon as practicable after any proper exercise of the Option in accordance with the provisions of this Agreement, the Company shall deliver to the Optionee at the main office of the Company, or such other place as shall be mutually acceptable, a certificate or certificates representing such shares of Common Stock to which the Optionee is entitled upon exercise of the Option. 7. Rights in Shares Before Issuance and Delivery. Upon proper exercise of the Option (whether as a whole or in part) and payment of the Option Price required by such exercise, the Optionee shall immediately have all stockholder rights and privileges as to the Option Shares acquired by the Optionee in such exercise 8 notwithstanding any delays in issuance and delivery of the relevant stock certificate(s). 8. Nontransferability of Option. The Option is not transferable otherwise than to a grantor trust, plan or account created by the Optionee solely for estate planning purposes, by will or the laws of descent and distribution or for retirement planning purposes. The Option shall not be otherwise transferred, assigned, pledged, hypothecated, or disposed of in any way, whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Upon any attempt to transfer the Option otherwise than by will or the laws of descent and distribution, or to assign, pledge, hypothecate or otherwise dispose of the Option, or upon the levy of any execution, attachment or similar process thereon, the Option shall become null and void and any subsequent attempted exercise of the Option shall be ineffective against the Company. The terms of the Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 9. Certain Representations and Warranties. The Optionee expressly acknowledges, represents and agrees: (a) that if the Optionee uses Common Stock of the Company to pay the exercise price of the Option, the Optionee has been advised to consult with a competent tax advisor regarding the applicable tax consequences prior to utilizing such Common Stock to exercise an Option; and (b) that if the Optionee is a person subject to the provisions of Section 16 of the Securities Exchange Act of 1934, the Optionee has been advised to consult with a competent federal securities law advisor as to the reporting obligations and potential liability for profits under said Section 16 with respect to the granting and exercise of the Option. 10. No Employment Rights or Obligations. Nothing in the Plan or in this Agreement shall be construed to create or imply any contract of employment between the Company, or any direct or indirect parent or subsidiary corporation of the Company, (the "Participating Companies") and the Optionee. Nothing in the Plan or in this Agreement shall confer upon the Optionee any right to continue in the employ of the Company or any of the Participating Companies or confer upon any of the Participating Companies any right to require continued employment by the Optionee. Except as may be expressly 9 16 provided in a separate written agreement, the Optionee acknowledges and agrees that the employment of the Optionee by such Participating Company is expressly at the will of the Participating Company, and the Participating Company may terminate the Optionee's employment by such Participating Company at any time for any reason or for no reason. Similarly, except as may be expressly provided in a separate written agreement, the Optionee may terminate his employment with a Participating Company at any time for any reason or for no reason. 11. Governing Law. This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choice of laws, and not the laws pertaining to conflicts or choice or laws, of the State of California applicable to agreements made and to be performed wholly within the State of California. 12. Agreement Binding on Successors. The terms of this Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assigns of the Company and the Optionee. 13. Necessary Acts. The Optionee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement, including but not limited to all acts and documents related to the cancellation of options in connection with the issuance of options to New Employees and compliance with federal and/or state securities and/or tax laws. 14. Registration of Shares. The Company will use all commercially reasonable efforts to register the Option Shares on Form S-8 under the Securities Act of 1933 and, if the Company's shares of Common Stock are listed on the New York Stock Exchange at the time of such registration, to list the Option Shares on the New York Stock Exchange. 15. Invalid Provisions. In the event that any provision of this Agreement is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid and unenforceable provision was not contained herein. 10 17 16. Counterparts. For convenience, this Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purpose without the production of any other counterparts. IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement effective as of the date first written above. DATA-DESIGN LABORATORIES, INC. OPTIONEE By: /s/ Alan R. Steel /s/ William E. Cook --------------------------- ----------------------------------- Alan R. Steel, William E. Cook Chief Financial Officer 11 18 By her signature below, the spouse of the Optionee, if such Optionee be legally married as of the date of execution of this Agreement, acknowledges that she has read this Agreement and is familiar with the terms and provisions thereof, and agrees to be bound by all the terms and conditions of said Agreement. ----------------------------------- Spouse's Signature ----------------------------------- Printed Name Dated: _________________________________ 12 -----END PRIVACY-ENHANCED MESSAGE-----