February 2, 1999
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made as of February 2, 1999 by
and between Xxxxxx Natural Corporation, a Delaware corporation (the "Company"),
and Xxxx X. Blower ("Holder").
Preliminary Recitals
A. Holder is an employee of the Company or one of its subsidiaries or
affiliates.
B. Pursuant to the Xxxxxx Natural Corporation Stock Option Plan (the
"Plan"), the Company desires to xxxxx Xxxxxx an incentive stock option to
purchase shares of the Company's common stock, par value $.005 per share (the
"Common Stock").
NOW, THEREFORE, the Company and Holder agree as follows:
1. Grant of Incentive Stock Option. The Company hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase up to 12,500 shares of Common Stock, at the purchase price
of $4.25 per share, such ISO to be exercisable and exercised as hereinafter
provided.
2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's employment with the Company and its subsidiaries and affiliates
(the "Xxxxxx Natural Group") unless the employment is terminated by a member of
the Xxxxxx Natural Group for Cause (as defined below) or unless the employment
is terminated by reason of the death or Total Disability (as defined below) of
Holder. If the Holder's employment is terminated by a member of the Xxxxxx
Natural Group for Cause, the ISO shall expire as of the date employment
terminates. If the Holder's employment terminates due to his death or Total
Disability, then the ISO may be exercised by Holder or the person or persons to
which Holder's rights under this Agreement pass by will, or if no such person
has such right, by his executors or administrators, within six months after the
date of death or Total Disability, but no later than the expiration date
specified in Section 3(c) below. "Cause" means the Holder's act of fraud or
dishonesty, knowing and material failure to comply with applicable laws or
regulations, failure to satisfactorily perform his duties of employment,
insubordination or drug or alcohol abuse, as determined by the Committee of the
Xxxxxx Natural Corporation Stock Option Plan (the "Committee"). "Total
Disability" means the complete and permanent inability of Holder to perform all
of his duties of employment with the Company, as determined by the Committee
upon the basis of such evidence, including independent medical reports and data,
as the Committee deems appropriate or necessary.
3. Exercise of Option
(a) Subject to the other terms of this Agreement regarding the
exercisability of the ISO, including without limitation, paragraph (b) below,
and provided that Holder is employed by a member of the Xxxxxx Natural Group on
the relevant date, the ISO may only be exercised in respect of the number of
shares listed in column A from and after the exercise dates listed in column X,
Xxxxxx "X" Xxxxxx "X"
Number of Shares Exercise Date
2,500 February 2, 2000
2,500 February 2, 2001
2,500 February 2, 2002
2,500 February 2, 2003
2,500 February 2, 2004
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Total Shares 12,500
(b) Holder's right to exercise the ISO in accordance with the exercise
schedule set forth in paragraph (a) above shall, in respect of each exercise
date, be subject to Holder having achieved for the most recently completed
calendar year prior to such respective exercise date, his/her respective sales
and/or performance goals, as the case may be, determined for such period by
Xxxxxx Beverage Company. Consequently, failure by Holder to achieve his/her
sales and/or performance goals for any applicable calendar year shall result in
the forfeiture in each case by Holder of the ISO in respect of that number of
shares listed in Column A of paragraph (a) that would otherwise become
exercisable on the closest date after the end of such calendar year reflected
alongside that number of shares in Column B. For example, if the sales achieved
by Holder in the calendar year ended December 31, 2001, amounts to 95,000 cases
out of an agreed sales goal of 100,000 cases, then the number of shares that
Holder will become entitled to exercise on the next exercise date listed in
Column B that is, after January 1, 2002, shall be forfeited.
(c) Subject to paragraph (b) above, this ISO may be exercised, to the
extent exercisable by its terms, from time to time, in whole or in part, at any
time prior to the expiration thereof. Any exercise shall be accompanied by a
written notice to the Company specifying the number of shares as to which this
ISO is being exercised (the "Option Shares"). Notations of any partial exercise
or installment exercise, shall be made by the Company on Schedule A hereto.
(d) Notwithstanding anything else herein to the contrary, this ISO shall
expire six years from the date indicated above.
(e) The Holder hereby agrees to notify the Company in writing in the event
shares acquired pursuant to the exercise of this ISO are transferred, other than
by will or by the laws of descent and distribution, within two years after the
date indicated above or within one year after the issuance of such shares
pursuant to such exercise.
4. Payment of Purchase Price Upon Exercise. At the time of any exercise of
the ISO the purchase price of the ISO shall be paid in full to the Company in
either of the following ways or in any combination of the following ways:
(a) By check or other immediately available funds.
(b) With property consisting of shares of Common Stock. (The shares of
Common Stock to be used as payment shall be valued as of the date of exercise of
the ISO at the Closing Price as defined below. For example, if Holder exercises
the option for 4,000 shares at a total Exercise Price of $8,000, assuming
exercise price of $2.00 per share, and the Closing Price is $5.00, he may pay
for the 4,000 Option Shares by transferring 1,600 shares of Common Stock to the
Company.)
(c) For purposes of this Agreement, the term "Closing Price" means, with
respect to the Company's Common Stock, the last sale price regular-way or, in
case no such sale takes place on such date, the average of the closing bid and
asked prices regular-way on the principal national securities exchange on which
the securities are listed or admitted to trading; or, if they are not listed or
admitted to trading on any national securities exchange, the last sale price of
the securities on the consolidated transaction reporting system of the National
Association of Securities Dealers (NASD"), if such last sale information is
reported on such system or, if not so reported, the average of the closing bid
and asked prices of the securities on the National Association of Securities
Dealers Automatic Quotation System ("NASDAQ") or any comparable system or, if
the securities are not listed on NASDAQ or a comparable system, the average of
the closing bid and asked prices as furnished by two members of the NASD
selected from time to time by the Company for that purpose.
5. Purchase for Investment; Resale Restrictions. Unless at the time of
exercise of the ISO there shall be a valid and effective registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate qualification and
registration under applicable state securities laws relating to the Option
Shares being acquired, Holder shall upon exercise of the ISO give a
representation that he is acquiring such shares for his own account for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company, of such investment intent. Holder further agrees that he will not
sell or transfer any Option Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such proposed sale or transfer will not result in a violation of
the '33 Act, or a registration statement covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action letter from the Securities and Exchange Commission with
respect to the proposed transfer.
6. Nontransferability. This ISO shall not be transferable other than by
will or by the laws of descent and distribution. During the lifetime of Holder,
this ISO shall be exercisable only by Holder.
7. Adjustments. In the event of any change in the outstanding Common Stock
of the Company by reason of any stock recapitalization, merger, consolidation,
combination or exchange of shares, the kind of shares subject to the ISO and
their purchase price per share (but not the number of shares) shall be
appropriately adjusted consistent with such change in such manner as the Board
of Directors of the Company may deem equitable. In the event of a stock dividend
or stock split the kind of shares, their purchase price per share and the number
of shares shall be appropriately adjusted, consistent with such change in such
manner as the Board of Directors may deem equitable. Any adjustment so made
shall be final and binding on Holder. No adjustments shall be made that would
have the effect of modifying an ISO under Internal Revenue Code xx.xx. 422 and
424.
8. No Rights as Stockholder. Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.
9. No Right to Continue Employment. This Agreement shall not confer upon
Holder any right with respect to continuance of employment with any member of
the Xxxxxx Natural Group nor shall it interfere in any way with the right of any
such member to terminate his employment at any time.
10. Compliance With Law and Regulation. This Agreement and the obligation
of the Company to sell and deliver shares of Common Stock hereunder shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required. If at
any time the Board of Directors of the Company shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or federal law,
or (ii) the consent or approval of any government regulatory body, is necessary
or desirable as a condition of or in connection with the issue or purchase of
shares of Common Stock hereunder, this ISO may not be exercised in whole or in
part unless such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors.
11. Tax Withholding Requirements. The Company shall have the right to
require Holder to remit to the Company an amount sufficient to satisfy any
federal, state or local withholding tax requirements prior to the delivery of
any certificate or certificates for Common Stock.
12. Fractional Shares. Notwithstanding any other provision of this
Agreement, no fractional shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate Holder
in any way for such fractional shares.
13. Notices. Any notice hereunder to the Company shall be addressed to it
at its office at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx with a copy to Xxxxxxxx Xxxx, Xxxxxxx Breed Xxxxxx &
Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and any notice hereunder to
Holder shall be addressed to him at __________, subject to the right of either
party to designate at any time hereafter in writing some other address.
14. Amendment. No modification, amendment or waiver of any of the
provisions of this Agreement shall be effective unless in writing specifically
referring hereto, and signed by both parties.
15. Governing Law. This Agreement shall be construed according to the laws
of the State of Delaware and all provisions hereof shall be administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Xxxxxx Natural Corporation has caused this Agreement to
be executed by a duly authorized officer and Holder has executed this Agreement
both as of the day and year first above written.
XXXXXX NATURAL CORPORATION
By:/s/XXXXXX XXXXX
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Title: Chairman
/s/XXXX X. BLOWER
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Xxxx X. Blower
