Exhibit 4.4
OPTION AGREEMENT
This OPTION AGREEMENT is dated June 13, 1997 ("this Agreement"), by and
between Celestial Seasonings, Inc., a Delaware corporation ("the Company") and
Xx Xxxxxx ("Xxxxxx"), and amends and restates the Common Stock Subscription
Agreement dated July 11, 1991 among Celestial Holdings, Inc. ("Holdings"),
Xxxxxx and Vestar/Celestial Investment Limited Partnership (the "Vestar
Partnership") (the "Subscription Agreement") insofar as the Subscription
Agreement relates to certain options granted by Holdings to Xxxxxx.
RECITALS
A. Pursuant to the Subscription Agreement, Holdings granted Xxxxxx an
option to acquire 18,250 shares of Holdings' Class A Common Stock, par value
$.01 per share ("Holdings Common"), at an exercise price of $21.63 per share
(the "First Option"), and an option to acquire 18,250 shares of Holdings Common
at an exercise price of $30 per share (the "Second Option").
B. For federal and state income tax purposes, the First Option and the
Second Option constituted property held by Xxxxxx and were not compensatory
options.
C. On July 19, 1993, Holdings was merged into the Company (the "Merger"),
and, in connection with the Merger, each share of Holdings Common was converted
into the right to receive 2.62 shares of the Company's Common Stock, par value
$.01 per share (the "CTEA Common").
D. As a result of the Merger, the First Option became the right to acquire
47,815 shares of CTEA Common at a price of approximately $8.26 per share, and
the First Option became the right to acquire 47,815 shares of CTEA Common at a
price of approximately $11.45 per share.
E. Following the distribution of its CTEA Common to its limited partners in
1994, the Vestar Partnership was dissolved.
X. Xxxxxx and the Company, as the successor to Holdings, wish to amend and
restate the Subscription Agreement insofar as the Subscription Agreement relates
to the First Option and the Second Option so as to clarify the rights and
obligations of the parties.
The parties therefore agree as follows:
1. Grant of Option. Subject to the terms and conditions of this Agreement,
the Company hereby confirms the grant to Xxxxxx of an option to acquire 47,815
shares of CTEA Common at an exercise price of $8.26 per share and an option to
acquire 47,815 shares of CTEA Common at an exercise price of $11.45 per share
(collectively, the "Option"). The number of shares of CTEA Common and the
exercise price for such shares are subject to adjustment as provided in this
Agreement. The Company agrees that all CTEA Common issued upon exercise of the
Option shall be duly issued, fully paid and nonassessable.
2. Exercise of Option. The Option may be exercised, by written notice to
the Company in the form attached as Exhibit A hereto, at any time and from time
to time after the date of this Agreement. The Option shall not be exercisable in
any event after the close of business on July 11, 2031, and the Option shall
expire at such time. At the time of exercise of all or part of the Option,
Xxxxxx shall pay the full exercise price for the shares of CTEA Common being
acquired, by delivering to the Company a certified bank check for the full
exercise price. Promptly following receipt of such notice and check, the Company
shall deliver to Xxxxxx one or more stock certificates evidencing the CTEA
Common being acquired, each containing a legend substantially in the form set
forth below:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES LAWS OR BLUE SKY LAWS ("BLUE SKY LAW") AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION
UNDER THE ACT AND UNDER APPLICABLE BLUE SKY LAW OR UNLESS SUCH SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION
THEREUNDER.
Xxxxxx shall be considered the record owner of the CTEA Common being acquired
for all purposes as of the close of business on the date upon which a duly
executed notice of exercise and a certified bank check for the full exercise
price is received by the Company (the "Exercise Date").
3. Transfer of the Option and the CTEA Common. Xxxxxx hereby acknowledges
that the Option has not been registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws, and accordingly, the Option
may not be sold, transferred, assigned, pledged or hypothecated without
registration under the Act and any applicable state securities law or without
exemption therefrom which is satisfactory to the Company. Xxxxxx hereby
acknowledges that the shares of CTEA Common which Xxxxxx may acquire by
exercising the Option must be acquired for investment without a view to
distribution, within the meaning of the Act, and shall not be sold, transferred,
assigned, pledged or hypothecated in the absence of an effective registration
statement for such shares under the Act and applicable state securities laws or
an exemption therefrom which is satisfactory to the Company. Xxxxxx also agrees
that the Option and the shares of CTEA Common which Xxxxxx may acquire by
exercising the Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state.
4. Adjustments. In the event of any change in the number of shares of CTEA
Common outstanding by reason of any stock dividend, split-up, merger,
recapitalization, combination, conversion, exchange of shares or other change in
the corporate or capital structure of the Company which could have the effect of
diluting or otherwise affecting Xxxxxx'x rights hereunder, the number and kind
of shares of CTEA Common subject to the Option and the exercise price therefor
shall be appropriately adjusted.
5. No Rights as Stockholder. Xxxxxx shall not be or have any of the rights
or privileges of a stockholder of the Company with respect to shares of CTEA
Common acquirable upon exercise of the Option until the close of business on the
Exercise Date. No adjustment shall be made to the Option for any dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights on the CTEA Common.
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6. Notices. Any notice hereunder to the Company shall be addressed to:
Celestial Seasonings, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Secretary, and any notice hereunder to Xxxxxx shall be addressed to
Xxxxxx at Xxxxxx'x last address on the records of the Company, subject to the
right of either party to designate at any time hereafter in writing some other
address. Any notice shall be deemed to have been duly given when delivered
personally, by courier or by facsimile (receipt verified) or three business days
after being enclosed in a properly sealed envelope, addressed as set forth
above, and deposited (with first class postage prepaid) in the United States
mail.
7. Counterparts. This Agreement may be executed in one or several
counterparts, each of which shall constitute one and the same instrument.
8. Binding Effect; Amendment; Entire Agreement. This Agreement shall be
binding upon and inure to the benefit of any successors to the Company and the
heirs, personal representatives, successors and assigns of Xxxxxx. This
Agreement may not be modified, amended, altered or supplemented except by a
writing signed by the Company and Xxxxxx. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement.
9. Governing Law. The validity, construction, interpretation,
administration and effect of this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Delaware.
10. Further Assurances. The parties will execute and deliver such documents
and take such action reasonably deemed necessary or desirable to more
effectively complete and evidence the issuance of the Option and the sale and
transfer of any CTEA Common upon exercise of the Option pursuant to this
Agreement.
* * * * *
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IN WITNESS WHEREOF, the Company and Xxxxxx have executed this
Agreement as of the date first above written.
CELESTIAL SEASONINGS, INC.
By:
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Its:
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XXXXXX
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Xx Xxxxxx
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EXHIBIT A
Form of Letter to be Used on
Exercise of Option
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Date
Celestial Seasonings, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Dear Ladies and Gentlemen:
I wish to exercise the stock option granted on July 11, 1991 and evidenced
by my Option Agreement dated as of June 13, 1997 to the extent of ________
shares of the Common Stock of Celestial Seasonings, Inc. (the "CTEA Common"), at
the exercise price of $___ per share. I represent and warrant that the shares of
CTEA Common I am acquiring are being acquired for investment without a view to
distribution, within the meaning of the Securities Act of 1933, as amended (the
"Act"), and may not be sold, transferred, assigned, pledged or hypothecated in
the absence of an effective registration statement for such shares under the Act
and applicable state securities laws, or an exemption therefrom which is
satisfactory to Celestial Seasonings, Inc. My check in the amount of $________
in payment of the entire exercise price for these shares accompanies this
letter.
Please issue a certificate for these shares in the following name:
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Name
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Street Address
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City/State/Zip
Very truly yours,
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Xx Xxxxxx
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Social Security Number
