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EXHIBIT 10.4
OPTION AGREEMENT
VALUEVISION INTERNATIONAL, INC.
TO
XXXXXX XXXXXXXX
OPTION AGREEMENT made as of the 28th day of July, 1999, between
ValueVision International, Inc., a Minnesota corporation ("ValueVision"), Xxxxxx
Xxxxxxxx, an employee of ValueVision ("Employee").
WHEREAS, ValueVision desires, by affording Employee an opportunity to
purchase its shares of Common Stock, $0.01 par value ("Shares"), as hereinafter
provided, to carry out the resolutions of the Board of Directors of ValueVision
granting a non-qualified stock option to Employee as partial compensation for
his efforts on behalf of ValueVision as an employee.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. ValueVision hereby irrevocably grants to Employee
the right and option, hereinafter called the Option, to purchase all or any part
of an aggregate of three hundred fifty thousand (350,000) Shares (such number
being subject to adjustment as provided in paragraph 7 hereof) on the terms and
conditions herein set forth.
2. Purchase Price. The purchase price of the Shares covered by the
Option shall be $24.00, which is equal to the last price on the NASDAQ System of
one share of ValueVision's Common Stock on the last trade date prior to the date
hereof day first written above.
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3. Exercise of Option. The right to exercise the Option in whole or in
part, shall be effective, except as otherwise specifically limited herein, as
follows: on and after July 28, 1999, Employee may purchase up to 116,666 Shares;
and on and after July 28, 2000, Employee may purchase up to an additional
116,667 Shares; and on and after July 28, 2001, Employee may purchase up to an
additional 116,667 Shares. Each of the rights to purchase Shares granted in the
preceding sentence shall expire five (5) years after the right to purchase the
Shares became effective, except as otherwise specifically limited herein. The
purchase price of Shares acquired through exercise of any part of the Option
shall be paid in full in cash at the time of exercise. Employee, as holder of
the Option, shall not have any of the rights of a Shareholder with respect to
the Shares covered by the Option except to the extent that one or more
certificates for such Shares shall be delivered to him upon the due exercise of
all or any part of the Option.
4. Non-Transferability. 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 Employee, only by Employee. More particularly
(but without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged, or hypothecated in
any way, shall not be assignable by operation of law, and shall not be subject
to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation, or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment, or similar
process upon the Option shall be null and void and without effect.
5. Exercise Upon Termination. If Employee ceases to serve as an
employee of ValueVision, while the Option remains in effect, whether as a result
of resignation or termination,
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with or without cause, the Option may only be exercised (to the extent that
Employee shall have been entitled to do so on the last day in which he served as
an employee of ValueVision) by Employee at anytime within ninety (90) days of
the day in which he ceased to serve as an employee of ValueVision. Upon the
expiration of such ninety (90) day period, or, if earlier, upon the expiration
date of the Option as set forth in Paragraph 3 hereof, the Option shall become
null and void.
6. Exercise Upon Death. If Employee dies while the Option remains in
effect, with or without cause, the Option may be exercised (to the extent that
Employee shall have been entitled to do so on the day of his death) by the
legatee or legatees of Employee under his will, or by his personal
representatives or distributees, at anytime within ninety (90) days after his
death. Upon the expiration of such ninety (90) day period, or, if earlier, upon
the expiration date of the Option as set forth in Paragraph 3 hereof, the Option
shall become null and void.
7. Changes in Capital Structure. If all or any portion of the Option
shall be exercised subsequent to any Share dividend, split-up, recapitalization,
merger, consolidation, combination or exchange of Shares, separation,
reorganization, or liquidation occurring after the date hereof, as a result of
which Shares of any class shall be issued in respect of outstanding Shares, or
Shares shall be changed into the same or a different number of Shares of the
same or another class or classes, the person or persons so exercising the Option
shall receive, for the aggregate price paid upon such exercise, the aggregate
number and class of Shares which, if Shares (as authorized at the date hereof)
had been purchased at the date hereof for the same aggregate price (on the basis
of the price per Share set forth in paragraph 2 hereof) and had not been
disposed of, such person or persons would be holding, at the time of such
exercise, as a result of such purchase and all such shared dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of Shares,
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separations, reorganizations, or liquidations; provided, however, that no
fractional Share shall be issued upon any such exercise, and the aggregate price
paid shall be appropriately reduced on account of any fractional Share not
issued.
8. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, the Option may only be exercised by written notice to
ValueVision. Such notice shall state the election to exercise the Option and the
number of Shares in respect of which it is being exercised, and shall be signed
by the person or person so exercising the Option. Such notice shall either: (a)
be accompanied by payment of the full purchase price of such Shares, in which
event ValueVision shall deliver a certificate or certificates representing such
Shares as soon as practicable after the notice shall be received; or (b) fix a
date (not less than five (5) nor more than ten (10) business days from the date
such notice shall be received by ValueVision) for the payment of the full
purchase price of such Shares against delivery of a certificate or certificates
representing such Shares. Payment of such purchase price shall, in either case,
be made by wire transfer or certified or cashier's check payable to the order of
ValueVision. All Shares that shall be purchased upon the exercise of the Option
as provided herein shall be fully paid and non-assessable.
9. Immediate Acceleration of Options Upon Change in Control.
Notwithstanding any provision contained herein, or any other agreement relating
hereto to the contrary, the Option granted hereby will become exercisable
immediately in accordance with section 4.d. of that certain Employment Agreement
dated July 28, 1999 between Valuevision and Employee, unless and to the extent
that the exercise of the Option would result in the application of the
provisions of Section 280G of the Internal Revenue Code of 1986, as amended.
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10. Investment Certificate and Registration. Prior to the receipt of
the certificates pursuant to the exercise of the Option granted hereunder,
Employee shall agree to hold the Shares acquired by exercise of the Option for
investment and not with a view to resale or distribution thereof to the public,
and shall deliver to ValueVision a certificate to that effect. Nothing in this
Agreement shall require ValueVision to register the Option or the Shares
purchased upon the exercise of said Option.
11. General. ValueVision shall at all times during the term of the
Option reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Option Agreement. This Option shall be
construed in accordance with the laws of the State of Minnesota.
[signatures on following page]
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IN WITNESS WHEREOF, ValueVision and Employee have executed this
Agreement as of the date first written above.
VALUEVISION INTERNATIONAL, INC.
By /s/ Xxxx XxXxxxxxx
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Xxxx XxXxxxxxx,
Chief Executive Officer
Employee:
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
