EXHIBIT 4.19
STOCK OPTION AGREEMENT
EFFECTIVE DATE: Xxxxx 00, 0000
XXXXX: Tempe, Arizona
PARTIES: RECONDITIONED SYSTEMS, INC., an Arizona corporation
(the "Company"), and Xxxxx X. Xxxx ("Optionee")
RECTIALS:
Pursuant to resolutions of the Board of Directors of the
Company duly adopted at a quarterly meeting on May 11, 2001, Optionee is
entitled to receive a bonus for his services in connection with his role as
Chairman of the Board, options to acquire up to 2,500 shares of the Company's no
par value common stock ("Common Stock").
AGREEMENTS:
In consideration of the mutual promises herein contained, the
parties agree as follows:
1. Grant of Option. The Company hereby irrevocably
grants to Optionee the right and option (the "Option") to purchase all or any
part of an aggregate of up to two thousand five hundred shares (2,500) of Common
Stock (the "Shares") on the terms and conditions set forth in this Agreement.
2. Purchase Price. The purchase price of the Shares
acquired pursuant to the exercise of an Option shall be Three dollars and no
cents ($3.00) per Share, which is equal to or greater than the market value
per share on the effective date of this grant. The purchase price shall be paid
in the manner set forth in Paragraph 11.
3. Vesting. Optionee's right to acquire Shares pursuant to
the exercise of the Option as provided herein shall be fully vested as of the
date hereof; provided, however, that Optionee hereby agrees not to sell,
assign, transfer, pledge, hypothecate or otherwise dispose of any Shares
acquired upon exercise of this Option for a period of twelve (12) months
following the Effective Date of this Option.
4. Term of Option. Subject to earlier termination of the
Option as provided in Paragraphs 7, 8 and 9 hereof, shall terminate as of the
date ten (10) years after the Effective Date of Grant.
5. Exercise of the Option. Subject to earlier termination
of the Option as provided in Paragraphs 7, 8 and 9 hereof, and to the lock-up
provisions contained in Paragraph 3 hereof, Optionee may exercise the Option
from time to time as to any part or all of the Shares covered hereby.
6. Nontransferability. The Option shall not be transferable
otherwise than by will or the laws of descent and distribution, and the Option
may be exercised, during the lifetime of Optionee, only by Optionee. More
particularly, but without limiting the generality of the foregoing, and except
as otherwise specified, the Option may not be sold, assigned, transferred,
pledged, hypothecated, or disposed of in any manner, shall not be assignable by
operation of law, and shall not be subject to execution, attachment, or similar
process. Any attempted sale, assignment, transfer, pledge, hypothecation, or
other disposition contrary to the provisions hereof, and the levy of execution,
attachment, or similar process upon the Option, shall be null and void and
without effect.
7. Termination as Chairman. If Optionee's engagement as
Chairman of the Company is terminated (otherwise than by reason of death), the
Option may be exercised at any time within three (3) months after the date of
termination, but not more than ten (10) years from the date hereof. To the
extent the Option has not been exercised by such time, the Option shall
terminate. Nothing in this Agreement shall confer upon Optionee any right to
continue as Chairman of the Company or interfere in any way with the right of
the Company to terminate Optionee's engagement at any time.
8. Death of Optionee. If Optionee dies while Chairman the
Company or within three (3) months after the termination of his engagement as
Chairman of the Company, the Option may be exercised by the legal representative
of his estate, or by any person or persons who shall have acquired the Option
directly from Optionee by bequest or inheritance, at any time within one (1)
year after the date of his death, but not more than ten (10) years from the date
hereof. To the extent the Option has not been exercised by such time, the Option
shall terminate.
9. Dissolution or Liquidation of Company. In the event of
the proposed dissolution or liquidation of the Company, or in the event of a
proposed sale of substantially all of the assets of the Company, or in the event
of a merger or consolidation with another corporation in any manner in which the
Company is not the surviving corporation and the surviving corporation does not
agree to assume the Option granted hereunder, the Option will terminate
immediately before the consummation of such proposed action, unless sooner
terminated as of a date fixed by the Board of Directors, in which event Optionee
shall be given the right to exercise the Option as to all or any part of the
Shares subject to this Agreement.
10. Rights as Stockholders. Optionee shall not by reason of
the Option have any rights as a stockholder of the Company until Optionee shall,
from time to time, have exercised the Option, and, upon each such exercise,
Optionee shall have, with respect to the number of Shares as to which the Option
is then exercised, all rights of a stockholder of record from the date of such
exercise, irrespective of whether certificates to evidence the Shares with
respect to which the Option was exercised shall have been issued on such date.
11. Method of Exercising.
(a) Notice of Exercise/Payment of Purchase Price
Subject to the terms and conditions of this Agreement, the Option may
be exercised by written notice to the Secretary of the Company, at the Company's
main office, or at such other address as the Company, by written notice to
Optionee, may designate from time to time. Such notice shall state the election
to exercise the Option and the number of Shares in respect of which the Option
is being exercised, and shall be signed by the person or persons exercising the
Option. Such notice shall be accompanied by payment of the full purchase price
of such Shares, by cashier's or certified check, or by such other form of
consideration, if any, as may be approved by the Company's Board of Directors.
In addition to the foregoing, the purchase price for
the Shares may be paid through a sale and remittance procedure by with Optionee
shall provide concurrent irrevocable written instructions to: (i) a Company
designated brokerage firm to effect the immediate sale of the purchased Shares
and remit to the Company, out of the sale proceeds available on the settlement
date, sufficient funds to cover the purchase price for the Shares acquired
pursuant to exercise of the Option, and (ii) the Company to deliver the
certificates for the purchased Shares directly to the brokerage firm to complete
the sale transaction.
(b) Stock Certificates. Upon the exercise of an
Option, the Company shall deliver a certificate or certificates
representing any Shares acquired hereunder as soon as possible after the
notice and payment shall be received. Except if issued through the sales and
remittance procedure described in Paragraph 11(a), the certificate or
certificates for the Shares as to which the Option shall have been so
exercised shall be registered in the name of Optionee or in the name of any
other person or entity specified in writing by the Optionee. If an Option
shall be exercised by the legal representative of Optionee's estate, or by
any person or persons who shall have acquired the Option directly form
Optionee as a result of Optionee's death, whether by bequest, inheritance,
or otherwise, such notice shall be accompanied by appropriate proof of
the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of an Option as provided herein shall be
fully paid and nonassessable.
12. Reservation of Shares. The Company shall at all times
during the term of the Option reserve and keep available such number of shares
of Common Stock as will be sufficient to satisfy the requirements of this
Agreement, shall pay all fees, expenses, and taxes necessarily incurred by the
Company in connection therewith, and shall, from time to time, use its good
faith efforts to comply with all laws, rules, and regulations which, in the
opinion of counsel for the Company , shall be applicable thereto.
13. Registration of Shares. The Company shall register the
Shares issuable upon exercise of the Option with the Securities and Exchange
Commission (the "Commission") by filing a Registration Statement on Form S-8
with the Commission.
14. Adjustment of Recapitalization. In the event of any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Company or any merger, consolidation,
spin-off, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of warrants or other rights to purchase
securities or any other corporate transaction or event having an effect
similar to any of the foregoing, appropriate adjustments shall be made by the
Board of Directors of the Company to the number and kind of Shares and the price
per Share subject to this Agreement.
15. Taxes. Optionee agrees, no later than the date as of
which the value of an Option or Shares acquired pursuant to this Agreement
first becomes includible in the gross income of Optionee for federal
income tax purposes, to pay to the Company or make arrangements satisfactory to
the Company regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Option or such Shares. The
obligations of the Company under this Agreement shall be conditional on
such payment or arrangements, and the Company shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to Optionee.
16. Action Taken in Good Faith. No member of the Board of
Directors, nor any officer or employee of the Company acting on behalf of the
Board, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to this Agreement.
17. Miscellaneous.
(a) Waiver. The waiver of any provision
of this Agreement will not be effective unless in writing and executed by the
party against whom enforcement of the waiver is sought.
(b) Entire Agreement.This Agreement
constitutes the entire integrated agreement among the parties pertaining to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. This Agreement may not be
amended except by written instrument executed by the parties.
(c) Arbitration. Any dispute or controversy
arising under or in connection with this Agreement shall be settled
exclusively by arbitration, conducted before a panel of three (3) arbitrators in
Phoenix, Arizona in accordance with the rules of the American Arbitration
Association then in effect. The decision of the arbitrators shall be final and
binding on the parties, and judgment may be entered on the arbitrator's award in
any court having jurisdiction. The costs and expenses of such arbitration,
including but not limited to attorneys' and other professionals' fees, shall be
borne in accordance with the determination or the arbitrators.
(d) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Arizona
without regard to its conflict of law principles.
(e) Severability. If any provisions of this
Agreement is held to be unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall be severable and not affected thereby.
(f) Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.
(g) Delays or Omissions. No delay or
omission to exercise any right, power, or remedy accruing to any party hereunder
or any breach or default under this Agreement shall impair any such right,
power, or remedy, nor shall it be construed as a waiver of or acquiescence to
any single breach or default be deemed a waiver of any other breach or default
occurring before or after the waiver. Any waiver, permit, consent, or approval
of any kind of any breach or default under this Agreement must be in writing and
shall be effective only to the extent specifically stated in such writing. All
remedies either under this Agreement or by law or otherwise afforded to any
party shall be cumulative.
(h) Headings. The headings in this
Agreement have been inserted for convenience only and shall not affect the
meaning or interpretation of any provision in this Agreement.
(i) Assignment. The rights and obligations
of the Company and Optionee hereunder shall inure to the benefit of and shall be
binding on their successors and assigns.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement effective as of the day and year first above written.
COMPANY: OPTIONEE:
RECONDITIONED SYSTEMS, INC.,
An Arizona corporation
By /S/ Xxxx X. Xxxxxxxx /S/ Xxxxx X. Xxxx
____________________________________ ___________________________
Xxxx X. Xxxxxxxx Xxxxx X. Xxxx
Chief Executive Officer
