Exhibit 99.7
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FORM OF STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, entered into as of November 25, 1997 and
amended on March 18, 1998, between REFAC Technology Development
Corporation, a Delaware Corporation ("REFAC"), and ___________(1) (the
"Optionee"), an employee of Human Factors Industrial Design, Inc. ("HFID").
WHEREAS, REFAC and HFID have entered into that certain Agreement
and Plan of Merger (the "Merger Agreement"), dated as of November 25, 1997,
by and among REFAC, HFID Acquisition Corporation ("New HFID"), HFID and the
Principal Stockholders (as defined in the Merger Agreement) of HFID,
pursuant to which New HFID will be merged with and into HFID (the
"Merger"), and, as a result of which Merger, HFID shall operate as a
subsidiary of REFAC;
WHEREAS, in connection with the Merger, the Optionee has entered
into that certain Employment Agreement, dated as of November 25, 1997 (the
"Employment Agreement"), pursuant to which the Optionee is entitled to
receive the stock option evidenced hereby;
WHEREAS, the Board of Directors of REFAC has determined that it
is in its and its stockholders' best interests to grant to the Optionee an
option to purchase shares of REFAC's common stock, par value $.10 per share
("Stock") in the amount and on the terms and conditions set forth herein;
and
WHEREAS, the Board of Directors of REFAC has determined that it
is in its and its stockholders' best interests that the Option granted
hereby shall not be subject to the terms and provisions of REFAC's 1990
Stock Option and Incentive Plan.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
parties hereto have agreed and do hereby agree as follows:
Section 1. GRANT OF OPTION. The Optionee is hereby granted an
option (the "Option") to purchase an aggregate of ______1 shares of Stock,
subject to adjustment as provided in Section 3 hereof, on the terms and
conditions herein set forth.
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(1) Same agreement entered into with Xxxx X. Xxxxxxxxx, Xxxxxxxxxxx X.
Xxxxxx, Xxxx X. Xxxx III, Xxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxxxx and
Xxxx Xxxxxx for 30,000, 7,500, 7,500, 30,000, 45,000, 3,750, 3,750,
3,750, 3,750 and 3,750 shares of common stock, respectively.
Section 2. EXERCISE PRICE. The exercise price per share of the
Stock subject to the Option shall be equal to $9.50.
Section 3. EFFECT OF CERTAIN CHANGES. If there is any change in
the Stock through the declaration of extraordinary dividends, stock
dividends, recapitalization, stock splits, or combinations or exchanges of
such shares, or other similar transactions, the number of shares of Stock
subject to the Option and the exercise price per share of the Option shall
be proportionately adjusted by the committee (the "Committee") established
by the Board of Directors of REFAC to administer REFAC's executive
incentive programs to reflect such change in the issued shares of Stock.
Section 4. TERM AND EXERCISABILITY OF OPTION.
(a) Term of Option. Unless the Option is previously cancelled
pursuant to this Agreement, the term of the Option and of this Agreement
shall commence March 18, 1998 (the "Date of Grant") and terminate on the
tenth anniversary of the Date of Grant (such tenth anniversary, the
"Expiration Date"). Upon the termination of the Option, all rights of the
Optionee hereunder shall cease.
(b) Exercisability of Option. The Option shall be exercisable
as to twenty percent (20%) of the aggregate number of shares covered hereby
on the Date of Grant. Subject to Section 7 hereof, the Option will become
exercisable as to sixteen percent (16%) of the aggregate number of shares
of Stock covered hereby on each of the first five (5) anniversaries of the
Date of Grant. Subject to Section 7 hereof, the right of the Optionee to
purchase shares with respect to which this Option has become exercisable as
herein provided may be exercised in whole or in part at any time or from
time to time, prior to the tenth anniversary of the Date of Grant.
Section 5. PAYMENT OF PURCHASE PRICE; WITHHOLDING TAXES.
(a) Payment of Purchase Price. Payment of the exercise price
for any shares of Stock being purchased hereunder (the "Purchase Price")
must be made in cash, by certified or bank check or by delivering to REFAC
previously acquired shares of Stock (none of which shares may be subject to
any claim, lien, security interest, community property right or other right
of spouses or present or former family members, pledge, option, voting
agreement or other restriction or encumbrance of any natures whatsoever).
If the Optionee pays by delivering shares of Stock, the Optionee must
include with the notice of exercise the certificates for such shares, duly
endorsed for transfer. REFAC will value the shares of Stock delivered by
the Optionee at their Fair Market Value (as defined below) on the date of
receipt and, if the value of such shares exceeds the Purchase Price, will
return to the Optionee cash in an amount equal to the value, so determined,
of any fractional portion of a share of Stock exceeding the Purchase Price
and will issue a certificate for any whole shares of Stock exceeding the
Purchase Price.
(b) Withholding Taxes. At the time the Optionee gives notice of
exercise of the Option, the Optionee shall include with such notice payment
in cash or by certified or bank check in an amount equal to all Federal,
state, local, employment or other withholding taxes due, if any, at the
time of exercise of the Option or shall give other assurance to REFAC
satisfactory to the Committee of the payment of such withholding taxes.
(c) Fair Market Value. For purposes of this Agreement, the
"Fair Market Value" of the Stock as of a particular date shall be (i) the
closing sales price of the Stock on a national securities exchange for the
last preceding date on which there was a sale of such Stock on such
exchange, or (ii) if the Stock is then traded on an over-the-counter
market, the average of the closing bid and asked prices for the Stock in
such over-the-counter market for the last preceding date on which there was
a sale of such Stock in such market, or (iii) if the Stock is not then
listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee in its discretion may determine.
Section 6. TRANSFER OF SHARES.
(a) REFAC shall deliver certificates for the shares of Stock
purchased hereunder as soon as practicable after receiving the payments
required under Section 5 hereof and all other documents as may be required
by law or the terms hereof.
(b) The sale and delivery of any shares purchased hereunder are
subject to approval of any governmental agency which may, in the opinion of
counsel to REFAC, be required in connection with the authorization,
issuance or sale of Stock. REFAC shall use its best efforts to obtain any
such approval. No shares of Stock shall be issued under the Option prior
to compliance with such requirements and with REFAC's listing agreement
with the American Stock Exchange (or other exchange upon which the Stock
may then be listed). The Committee may impose such restrictions on any
shares of Stock acquired pursuant to the exercise of the Option as is
required by applicable Federal securities laws, under the requirements of
any stock exchange or market upon which such shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
shares.
Section 7. TERMINATION OF EMPLOYMENT.
(a) Except as provided in this Section 7, the Option may not be
exercised after the Optionee has ceased to be employed by HFID.
(b) If the Optionee's employment with HFID is terminated by HFID
for Cause (as defined in the Employment Agreement), the Option shall be
cancelled as of the date of such termination of employment.
(c) If the Optionee's employment with HFID is terminated (i) by
reason of the Optionee's death (A) during the term of the Employment
Agreement or (B) within ninety (90) days following the effective date of
termination of the Optionee's employment with HFID for any reason other
than for Cause or (ii) by reason of the Optionee's Disability (as defined
in the Employment Agreement) or retirement, the Option shall be exercisable
by the Optionee (or his beneficiary, if appropriate), to the extent
exercisable on the effective date of such termination of employment for a
period of one (1) year following the effective date of such termination of
employment.
(d) If the Optionee's employment with HFID is terminated for any
reason other than for Cause (as defined in the Employment Agreement) or by
reason of the optionee's death, Disability (as defined in the Employment
Agreement) or retirement, the Optionee shall have the right to exercise the
Option, to the extent exercisable on the effective date of such termination
of employment, for a period of ninety (90) days following the effective
date of such termination of employment.
(e) Notwithstanding anything to the contrary in this Section 7,
the Option shall not be exercisable later than the Expiration Date.
Section 8. RIGHTS OF OPTIONEE.
(a) The Optionee shall have none of the rights of a stockholder
with respect to the shares covered by the Option until the shares are
issued or transferred to such Optionee pursuant to Section 6 hereof.
(b) The Option shall not interfere with or limit in any way the
right of HFID to terminate the Optionee's employment at any time, nor
confer upon the Optionee any right to continue in the employ of HFID.
Section 9. NONTRANSFERABILITY OF OPTION. The Option shall not
be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only
by him or his legal representative.
Section 10. NOTIFICATION.
(a) The Option shall be exercised by written notification of
exercise substantially in the form of Exhibit A hereto and delivered to the
Secretary of REFAC in accordance with subsection (b) of this Section 10.
Such notification shall specify the number of shares of Stock to be
purchased and the manner in which payment is to be made.
(b) Any notification required or permitted hereunder shall be in
writing and must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to REFAC or the Committee, to REFAC, at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or to the Optionee at the
address set forth below, as the case may be, and deposited, postage
prepaid, in the United States mail; provided, however, that a notification
of exercise pursuant to subsection (a) of this Section 10 shall be
effective only upon receipt by REFAC of such notification and all necessary
documentation, including full payment for the Shares. Either party may, by
notification to the other given in the manner aforesaid, change the address
for future notices.
Section 11. CANCELLATION AND REISSUANCE. The Committee shall
have the authority to provide for the cancellation of the Option and the
reissuance of a replacement Option upon such terms as the Committee, in its
sole discretion, deems appropriate, provided that such terms shall not
adversely affect the Optionee in any material way.
Section 12. RESERVATION OF SHARES. REFAC agrees that, until
the exercise or expiration of the Option, at all times there shall be
reserved for issuance and/or delivery upon exercise of this Option such
number of shares of Stock as shall be required for issuance and delivery
upon exercise of the Option.
Section 13. GOVERNING LAW; INTERPRETATION.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
its conflicts of law principles.
(b) The Committee shall have final authority to interpret and
construe this Agreement and to make any and all determinations under them,
and its determination and decisions shall be final, conclusive and binding
upon the Optionee and his legal representative in respect of any questions
arising under this Agreement.
Section 14. MISCELLANEOUS.
(a) This Agreement shall bind and inure to the benefit of REFAC,
its successors and assigns, and the Optionee and his personal
representatives and assigns.
(b) The failure of REFAC to enforce at any time any provision of
this Agreement shall in no way be construed to be a waiver of such
provision or of any other provision hereof.
(c) Amendment. This Agreement may be amended or modified at any
time by an instrument in writing signed by the parties hereto.
IN WITNESS WHEREOF, REFAC has caused this Agreement to be duly
executed by its officer thereunder duly authorized and the Optionee has
hereunto set his hand, all as of the day and year set forth above.
REFAC TECHNOLOGY DEVELOPMENT
CORPORATION
By _______________________________
Name:
Title:
ACCEPTED:
______________________________
Optionee Date
Address:
______________________________
______________________________
______________________________
