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EXHIBIT 4.13
EXHIBIT "A"
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, made as of the 30th day of May 1996, by and between Pollution
Research and Control Corp., a California corporation having its principal
executive offices at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (the
"Grantor), and Liviakis Financial Communications, Inc., a California
corporation having its principal executive offices at 0000 "X" Xxxxxx, Xxxxx X,
Xxxxxxxxxx, Xxxxxxxxxx 00000 (the "Optionee").
WITNESSETH:
WHEREAS, the Optionee has agreed to perform services for the Grantor;
and
WHEREAS, the Grantor is desirous that Optionee exert its utmost
efforts on behalf of the Grantor.
NOW, THEREFORE, in consideration of the Optionee's service to the
Grantor, and for other good and valuable consideration, the Grantor hereby
grants to the Optionee options to purchase common stock of the Grantor, $.001
par value ("Common Stock"), on the following terms and conditions:
1. Option.
The Grantor hereby grants to the Optionee a non-qualified stock option
(not qualified as described in Section 422 of the Internal Revenue Code of
1986, as amended, the "Code") to purchase, prior to 5:00 p.m. Glendale time on
May 29, 2000, as set forth in Paragraph 3 hereof, up to an aggregate of one
million five hundred thousand (1,500,000) fully paid and nonassessable shares
of Common Stock (the "Shares"), subject to the terms and conditions set forth
below.
2. Exercise Prices.
The exercise prices shall be allocated as set forth below:
750,000 options to purchase shares at ninety-four cents ($.94)
per Share;
375,000 options to purchase shares at one dollar and
twenty-five cents ($1.25) per Share; and
375,000 options to purchase shares at two dollars ($2.00) per
Share;
The Grantor shall pay all original issue or transfer taxes on the exercise of
this option and all other fees and expenses incurred by the Grantor in
connection herewith.
3. Exercise of Option.
All of the options granted hereby shall first become exercisable on
November 30, 1996. Subject to the provisions of Paragraph 4 hereof, such
options shall be exercisable in whole or in
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part at any time and from time to time from the date on which they are first
exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000.
In order to exercise the option granted hereunder in whole or in
part, the Optionee shall deliver to the Grantor a written notice substantially
in the form of Notice of Exercise of Option to Purchase Shares attached
hereto, delivery to be effected by personal delivery, by overnight courier or
by registered or certified mail, return receipt requested, addressed to the
Grantor at its principal office. Such notice shall specify the number of
Shares which Optionee is purchasing under the option herein granted and shall
be accompanied by either:
(i) payment (in the form of cash or certified or bank cashier's
check) for the Shares so being purchased at the exercise price so specified in
the form of Notice of Exercise of Option to Purchase Shares and therefor as
specified in Paragraph 2 above; or
(ii) Optionee's written direction to the Grantor to retain as
consideration for the option exercise that number of Shares (rounded upward to
the next highest full Share) so being purchased which have an aggregate value
equal to the product derived by multiplying (a) the number of Shares so being
purchased by (b) the exercise price so specified in the form of Notice of
Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2
above, such Shares to be valued for such purposes at the mean between the high
and low prices at which Shares trade in the principal market in which Shares
trade on the trading day preceding the date on which such notice is delivered
to the Grantor.
As soon as practicable thereafter but in any event within five (5)
business days after Grantor shall cause to be delivered to the Optionee
certificates issued in the Optionee's name evidencing (x) in the case payment
of the exercise price pursuant to (i) above the full number of Shares as to
which this option was exercised by the Optionee or (y) in the case of payment
of the exercise price pursuant to (ii) above the number of Shares remaining
after subtracting from the full number of Shares as to which this option was
exercised by Optionee that number of Shares which Grantor is to retain pursuant
to (ii) above. Optionee shall be considered to be the holder and owner of the
Shares to be evidenced by such certificates as of the close of business on the
date Grantor received the notice of exercise accompanied by payment, as
contemplated herein, without regard to the date of actual issuance of the
certificate(s) representing such Shares,
4. Divisibility and Non-Assignability of the Option.
(a) The Optionee may exercise the option herein granted in whole
or in part at any time and from time to time, subject to the provisions of
Paragraph 3 above, with respect to any whole number of Shares included therein,
but in no event may an option be exercised as to less than ten thousand
(10,000) Shares at any time, except for the remaining Shares covered by the
option of less than ten thousand (10,000).
(b) The Optionee may not give, grant, sell, exchange, transfer
legal title, pledge, assign or otherwise encumber or dispose of the options
herein granted or any interest therein, and the options herein granted, or any
of them, shall be exercisable only by the Optionee or its legal successors.
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5. Stock as Investment.
By accepting this option, the Optionee agrees that it is Optionee's
intention to purchase Shares hereunder for investment and without any view
towards the resale or distribution thereof. In the event Shares to be issued
upon exercise of this Option have not been registered at the time of proposed
issuance under the Securities Act of 1933, as amended (the "Securities Act"),
the Optionee shall deliver to the Grantor at the time of such issuance a
written representation that Optionee is acquiring such Shares in good faith for
investment purposes only and not for resale or distribution. Grantor may place
a "stop transfer" order with respect to such Shares with its transfer agent and
place an appropriate restrictive legend on the stock certificate(s) evidencing
such Shares, in order to prevent transfers unless such Shares are registered
under the Securities Act or an exemption from the registration requirements of
the Securities Act is applicable.
6. Conditions to Issuance of Shares.
The Grantor shall issue and deliver certificates for Shares purchased
upon the exercise of any option granted hereunder, provided each of the
following conditions is satisfied, which conditions the Grantor hereby
undertakes and agrees to satisfy or cause to be satisfied: (a) the issuance of
such Shares shall have been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or counsel to the
Grantor shall have given an opinion that such issuance is exempt from the
registration requirements of such Act; (b) approval, to the extent required,
shall have been obtained from any state regulatory body having jurisdiction
thereof; and (c) permission for the listing of such Shares, if required, shall
have been given by NASDAQ or any national securities exchange on which Shares
are at the time of issuance listed.
7. Registration Rights.
(a) If, at any time during the exercise period hereof and the
three (3) years following any exercise hereunder, the Grantor proposes to file
a registration statement with respect to any class of securities (other than
pursuant to a registration statement on Forms S-4 or S-8 or any successor form)
under the Securities Act, the Grantor shall notify the Optionee at least twenty
(20) days prior to the filing of such registration statement and will offer to
include in such registration statement all or any portion of the Shares. In a
written notice to be delivered to the Grantor within twenty (20) days after
receipt of any such notice from Grantor, the Optionee shall state the number of
Shares that it wishes to register for resale and distribution publicly under
the proposed registration statement. The Grantor will use its best efforts,
through its officers, directors, auditors and counsel in all matters necessary
or advisable, to file at least one (1) such registration statement by January 3
1, 1997. The Grantor will also use its best efforts, through its officers,
directors, auditors and counsel in all matters necessary or advisable, to
include within the coverage of each such registration statement (except as
hereinafter provided) the Shares that Optionee has advised Grantor that
Optionee wishes to register pursuant to such registration statement for resale
and distribution, to prosecute each such registration statement diligently to
effectiveness, and to cause such registration statement to become effective as
promptly as practicable. In that regard, the Grantor makes no representation
or warranties as to its ability to have any registration statement declared
effective.
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All registrations requested pursuant to this Paragraph 7 (a) are
referred to herein as "Piggyback Registrations." In the event the Grantor is
advised by the staff of the SEC, NASDAQ or any self-regulatory or state
securities agency that the inclusion of the Shares will prevent, preclude or
materially delay the effectiveness of a registration statement filed, the
Grantor, in good faith, may amend such registration statement to exclude the
Shares without otherwise affecting the Optionee's rights to any other
registration statement herein.
(i) Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Grantor, and if the
underwriter thereof advises the Grantor in writing that in its opinion the
number of Shares requested to be included in such registration statement
exceeds the number that can be sold in such offering without materially
adversely affecting the distribution of such securities by the Grantor, then
the Grantor will include in such registration statement first, the securities
that the Grantor proposes to sell and second, the securities requested to be
included in such registration statement by selling securityholders, such right
to inclusion being apportioned pro rata among the Optionee and the other
holders of any other securities requesting registration according to the market
value of Shares and other securities requested to be registered.
Notwithstanding the above, if any such underwriter shall advise the
Grantor in writing that the distribution of the Shares being included in the
registration statement concurrently with the securities being registered by the
Grantor would materially adversely affect the distribution of such securities
by the Grantor, then the Optionee shall delay its offering and sale for such
period ending on the earliest of (a) 180 days following the effective date of
the Grantor's registration statement, (b) the earliest date that, in the
opinion of such underwriter, such adverse effect would no longer be caused, or
(c) such date as the Grantor, managing underwriter and Optionee shall otherwise
agree. In the event of such delay, the Grantor shall file such supplements and
post-effective amendments and take any such other actions as may be necessary
or appropriate to permit such Optionee to make its proposed offering and sale
for a period of at least ninety (90) days commencing immediately following the
end of such period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Grantor, the underwriter and the Optionee. Notwithstanding the foregoing, the
Grantor shall not be required to include Shares within the coverage of a
registration statement being filed pursuant to this Paragraph 7(a)(i) if, in
the opinion of counsel for both the Grantor and Optionee, all of the Shares
proposed to be registered may be immediately transferred pursuant to the
provisions of Rule 144 under the Securities Act.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
securities of the Grantor, and the underwriter thereof advises the Grantor in
writing that in its opinion the number of Shares requested to be included in
such registration statement exceeds the number which can be sold in such
offering without materially adversely affecting the distribution of such
securities, then the Grantor will include in such registration statement the
securities requested to be included in such registration statement by selling
securityholders on a pro rata basis, with such rights to inclusion being
apportioned among the Optionee and the other holders of any other securities
requesting registration according to the market value of Shares and other
securities requested by them, respectively, to be registered. Notwithstanding
the foregoing, the Grantor shall not be required
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to include Shares within the coverage of a registration statement being filed
pursuant to this Paragraph 9(a)(ii) if, in the opinion of counsel for both
the Grantor and Optionee, all of the Shares proposed to be registered may be
immediately transferred pursuant to the provisions of Rule 144 under the
Securities Act.
(b) If at any time after November 30, 1996 and prior to the third
(3rd) anniversary of the earlier of the expiration of the option herein granted
and the purchase of the final Shares remaining subject to such option Shares
issued or issuable upon exercise of the option herein granted are not then
registered under one or more Piggyback Registrations and then covered by a
prospectus complying with the requirements of the Securities Act, the Optionee
may by written notice to the Grantor require Grantor to file a registration
statement under the Securities Act covering such Shares as Optionee may
specify in such notice. Optionee shall be entitled so to require Grantor to
file a registration statement pursuant to this Paragraph 7(b) on only one (1)
occasion. The Grantor will file such a registration statement within ninety
(90) days of receipt of such notice; and thereafter will prosecute such
registration statement diligently to effectiveness; will cause such
registration statement to become effective as promptly as practicable; will
promptly file all such supplements and post-effective amendments to such
registration statement and take any such other actions as may be necessary or
appropriate to make available to Optionee on as continuous a basis as soon as
practicable a prospectus meeting the requirements of the Securities Act through
the earliest of (a) the date on which the final Shares have been sold and
distributed by Optionee, (b) the date on which, in the opinion of counsel for
both the Grantor and Optionee, all of the Shares which Optionee then holds may
be immediately transferred pursuant to the provisions of Rule 144 under the
Securities Act, and (c) May 29, 2003. In that regard, the Grantor makes no
representations or warranties as to its ability to have any registration
statement or post-effective amendment thereto declared effective.
(c) In the event of any registration of a security pursuant to
this Paragraph 7, the Grantor shall indemnify the Optionee and its officers and
directors against all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus (and as amended or supplemented)
relating to such registration, or caused by any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
are made unless such statement or omission was made in reliance upon and in
conformity with information furnished to the Grantor by the Optionee
expressly for use therein. The Optionee shall also indemnify the Grantor, its
officers and directors and each underwriter of the Shares so registered with
respect to losses, claims, damages and Shares so registered with respect to
losses, claims, damages and liabilities caused by an untrue statement or
omission made in reliance upon and in conformity with information furnished by
the Optionee to the Grantor in writing expressly for use in such registration
statement or prospectus.
(d) All expenses of any registration referred to in this Paragraph
7, except the fees and disbursement of counsel to the Optionee, underwriting
commissions or discounts and any transfer or other taxes applicable to the
transfer of Shares by the Optionee, shall be borne by the Grantor.
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(e) Following the exercise of options hereunder, the Optionee
shall promptly advise the Grantor when Optionee no longer holds any shares
acquired through the exercise of options granted hereunder, and upon the
request of the Grantor, the Optionee shall advise the Grantor from time to time
of the number of Shares then held by Optionee which were acquired through the
exercise of options granted hereunder.
8. Adjustments Upon Changes in Capitalization.
(a) In the event of changes in the outstanding Common Stock of the
Grantor by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, consolidations, combinations, exchanges of shares,
separations, reorganizations, liquidations or any similar events or events
having similar consequences, the number and class of Shares as to which the
option may be exercised shall be correspondingly adjusted so that for the same
aggregate exercise price the Optionee shall be entitled to acquire the
securities and other property Optionee would have held if Optionee had
exercised the option granted hereunder for the number of Shares under
consideration prior to the first of such events to occur and continued to hold
such Shares and all other securities and other property issued with respect
thereto in connection with such events. No adjustment shall be made with
respect to cash dividends or non-liquidating dividends payable in property
other than cash, so long as Grantor provides Optionee with written notice of any
such proposed dividend at least fifteen (15) days prior to the record date for
such dividend. Grantor shall also give Optionee prompt written notice of any
event resulting in an adjustment under this Paragraph 8(a), including a
detailed computation of such adjustment.
(b) Any adjustment in the number and kind of Shares and other
securities shall apply proportionately to only the unexercised portion of the
option granted hereunder at the time of the event given rise to the adjustment.
If fractions of a Share would result from any such adjustment, the adjustment
shall be revised to the next higher whole number of Shares so long as such
increase does not result in the holder of the option being deemed to own more
than 5% of the total combined young power or value of all classes of stock of
the Grantor or its subsidiaries, in which case the adjustment shall be revised
to the next lower whole number of Shares.
9. Effect of Mergers, Consolidations or Sales of Assets.
In the event Grantor should propose to merge or consolidate with, or
engage in some other form of business combination with, any other corporation
or entity on a basis in which Grantor is not to be the surviving entity, then
as a condition precedent to proceeding with such merger, consolidation or other
business entity, Grantor agrees to assume and perform all of Grantor's
obligations under the right to acquire the same securities and property for the
option exercise price specified herein as Optionee would have received if
Optionee had exercised the option granted herein immediately prior to such
merger, consolidation or other business combination. To the extent the above
may be inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall
be deemed interpreted so as to comply therewith.
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10. No Rights in Option Stock.
Optionee shall have no rights as a shareholder in respect of Shares
as to which the option granted hereunder shall not have been exercised and
payment made as herein provided.
11. Effect Upon Employment.
This Agreement does not give the Optionee any right to employment by,
or any other relationship with, the Grantor.
12. Binding Effect.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
13. Miscellaneous.
This Agreement shall be construed under the laws of the State of
California applied to agreements made and to be performed entirely within such
State. Headings have been included herein for convenience of reference only
and shall not be deemed a part of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Pollution Research and Control Corp.
By: /s/ XXXXXX X. XXXXXXXX, XX.
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ACCEPTED AND AGREED TO:
LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
By: /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx, President
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NOTICE OF EXERCISE OF OPTION TO PURCHASE SHARES
TO: POLLUTION RESEARCH AND CONTROL CORP.
The undersigned hereby exercises the option for the purchase
of ______________________________ ( _________________) Shares with an exercise
price of ___________________________________ ($___________) according to the
terms and conditions of that certain Non-Qualified Stock Option Agreement,
dated as of May 30, 1996, between Pollution Research and Control Corp. and the
undersigned (the "Agreement") and herewith makes payment of the exercise price
in full in accordance with the terms of said Agreement by (check one):
[ ] (i) payment in the form of cash or certified or bank
cashier's check for the Shares so being purchased at the exercise price
of __________________($______________) therefor as specified in Paragraph 2 of
the Agreement; or
[ ] (ii) these written directions to the Grantor to retain as
consideration for the option exercise that number of the Shares (rounded upward
to the next highest full Share) so being purchased which have an aggregate
value (valued for such purpose at the mean between the high and low prices at
which Shares traded in the principal market in which Shares trade on the
trading day preceding the date on which this Notice is delivered to
Pollution Research and Control Corp.) equal to the product derived by
multiplying (a) the number of Shares so being purchased by (b) the exercise
price therefor as specified in Paragraph 2 of the Agreement.
The undersigned is purchasing such Shares for investment purposes only
and not with a view to the sale or distribution thereof. Kindly issue the
certificate for such Shares in accordance with the instructions given below.
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Signature
Social Security or Taxpayer I.D. Number:
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Instructions for issuance of stock:
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Name
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Xxxxxx Xxxxxxx
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Xxxx Xxxxx Zip Code
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