EXHIBIT 10.1
PHOENIX GOLD INTERNATIONAL, INC.
GRANT NSO-15
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of February 16, 1999 between PHOENIX GOLD
INTERNATIONAL, INC., an Oregon corporation (the "Company"), and XXXXX X. XXXXXXX
(the "Optionee").
Optionee has been granted a nonstatutory stock option to purchase shares
of the Company's Common Stock, without par value per share (the "Common Stock"),
in the amount indicated below. This option is granted outside of the Company's
Amended and Restated 1995 Stock Option Plan (the "Plan"). Nonetheless, certain
of the terms and conditions of the Plan are incorporated into this Option
Agreement by reference.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained in this Option Agreement, the parties agree as follows:
1. GRANT. The Company grants to Optionee, upon the terms and conditions
set forth below, the right and option (the "Option") to purchase 1,400 shares of
Common Stock at an exercise price of $3.125 per share (the "Exercise Price").
The Option is a Nonstatutory Stock Option and is not intended to qualify as an
Incentive Stock Option under Section 422 of the Code.
2. TERM OF OPTION. Subject to reductions in the term of the Option as
provided in this Option Agreement, the Option shall continue in effect until
February 15, 2004, and may be exercised during such term only in accordance with
the provisions of the Plan and this Option Agreement.
3. VESTING SCHEDULE. The Option may be exercised, in whole or in part, in
accordance with the following schedule: (a) on the first anniversary of the date
hereof, one-third of the shares purchasable under the Option may be purchased,
in whole or in part, at any time thereafter until the Option expires; and (b)
continuing on each of the second and third anniversaries of the date hereof, an
additional one-third of the shares purchasable under the Option may be purchased
at any time thereafter until the Option expires.
4. EXERCISE OF OPTION.
A. RIGHT TO EXERCISE. The Option is exercisable during its term in
accordance with the vesting schedule set forth above in Section 3 and the
applicable provisions of this Option Agreement. In the event that the Optionee's
service with the Company terminates during the term of the Option, the
exercisability of the Option shall be governed by the applicable provisions of
the Plan, as if the Option had been granted under the Plan, and this Option
Agreement.
15
B. METHOD OF EXERCISE. The Option is exercisable by delivery of an
exercise notice, which notice shall state the election to exercise the Option,
the number of shares of Common Stock in respect of which the Option is being
exercised (the "Exercised Shares"), and such other representations and
agreements as may be required by the Company pursuant to the provisions of the
Plan. In addition, Optionee agrees to execute, as a condition of Option
exercise, such agreements respecting the Exercised Shares as the Committee, in
its reasonable discretion, determines to be required under the terms of
agreements to which the Company is a party or otherwise advisable and in the
best interests of the Company. The exercise notice shall be signed by Optionee
and shall be delivered in person or by certified mail to the Secretary of the
Company. The exercise notice shall be accompanied by payment of the aggregate
Exercise Price as to all the Exercised Shares. The Option shall be deemed to be
exercised upon receipt by the Company of such fully executed exercise notice
accompanied by such aggregate Exercise Price. For income tax purposes the
Exercised Shares shall be considered transferred to Optionee on the date the
Option is exercised with respect to such Exercised Shares.
5. CONDITIONS. The obligations of the Company under this Option
Agreement shall be subject to the approval of such state or federal authorities
or agencies as may have jurisdiction in the matter. The Company will use its
best efforts to take such steps as may be required by state or federal law or
applicable regulations, including rules and regulations of the Securities and
Exchange Commission and any national securities exchange on which the Common
Stock may then be listed, in connection with the issuance or sale of any shares
acquired pursuant to this Option Agreement or the listing of such shares on any
such exchange. The Company shall not be obligated to issue or deliver shares of
Common Stock under this Option Agreement if, upon advice of its legal counsel,
such issuance or delivery would violate state or federal securities laws.
6. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of Optionee:
(a) cash; or
(b) check; or
(c) delivery of such documentation as the Committee and Optionee's
broker shall require to effect an exercise of the Option and delivery to the
Company of the sale or margin loan proceeds required to pay the aggregate
Exercise Price of the Exercised Shares; or
(d) surrender of other shares of Common Stock which have a Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.
7. RESTRICTION ON TRANSFER. The Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution or, with
the consent of the Committee, pursuant to a qualified domestic relations order
(a "QDRO") as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, and may be exercised during the lifetime of
Optionee only by Optionee or Optionee's guardian or legal representative or
Optionee's permitted assignee or transferee pursuant to a QDRO. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and permitted assigns of Optionee.
16
8. Legends. All certificates representing any of the shares of Common
Stock subject to the provisions of this Option Agreement may, in the sole
discretion of the Committee, have endorsed thereon the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED."
(b) Any legend required to be placed thereon by applicable Blue Sky
laws of any state.
(c) Any legend required to be placed thereon by any applicable
shareholder agreement.
9. EMPLOYMENT; SERVICE. Nothing in the Plan or in this Option
Agreement shall (a) confer upon the Optionee any right with respect to
employment with the Company or any affiliate of the Company or (ii) interfere in
any way with the right of the Company or any affiliate of the Company to
terminate the Optionee's employment (or service as a Director, in accordance
with applicable corporate law, or service as a Consultant) at any time for any
reason, with or without cause.
10. THE PLAN. Although the Option has been granted outside of the
Plan, the parties desire that the Option be subject to the terms and conditions
of the Plan as if it had been granted under the Plan.
11. DEFINITIONS. Any capitalized term in this Option Agreement which
is not defined herein and which is defined in the Plan shall have the same
definition as in the Plan.
12. GOVERNING LAW. To the extent that federal laws (such as the Code
and the federal securities laws) do not otherwise control, the Plan and this
Option Agreement shall be construed in accordance with the laws of the state of
Oregon.
13. HEADINGS. Headings contained in this Option Agreement are for
reference purposes and shall not affect the meaning or interpretation of this
Option Agreement.
14. GENERAL. Optionee and the Company agree that the Option is granted
under and governed by the terms and conditions of this Option Agreement and
governed by the terms and conditions of the Plan as set forth in Section 10.
Optionee has reviewed the Plan and this Option Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option Agreement and fully understands all provisions of the Plan and Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions relating to the
Plan and Option Agreement.
17
OPTIONEE: PHOENIX GOLD INTERNATIONAL, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------- -----------------------------
Signature Xxxxx X. Xxxxxxxx, President
XXXXX X. XXXXXXX By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------- -----------------------------
Print Name Xxxxxxx X. Xxxxxxx, Executive
Vice President
---------------------------------
Social Security Number
18
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase shares of Common
Stock as set forth in this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement, and further agrees that any joint or community property interest
shall be similarly bound. The undersigned hereby appoints the undersigned's
spouse as attorney-in-fact for the undersigned with respect to any amendment or
exercise of rights under the Plan or this Option Agreement.
/s/ Xxxxxx Xxxxxxx
-------------------------------------
Spouse of Optionee
XXXXXX XXXXXXX
-------------------------------------
Print name
February 28, 1999
-------------------------------------
Date signed
19
