Exhibit 10.3
PROFILE NATIONAL BUSINESS DIRECTORY, INC.
NONSTATUTORY OPTION AGREEMENT
Between:
Profile National Business Directory, Inc. (the "Company") and Xxxxxxx X. Xxxxx
(the "Employee"), dated March 31, 1997.{Amended 8/31/98 for stock split}
The Company hereby grants to the Employee an option (the "Option") to
purchase Fifty Thousand (50,000) {Two Hundred Thousand (200,000)}shares (the
"Shares") of the Company's common stock under the terms and conditions set forth
below. The terms and conditions applicable to the Option are as follows:
1. Nonstatutory Option. The Option shall be a Nonstatutory Option, and
is not intended to qualify as an incentive stock option within the meaning of
ss.422 of the Internal Revenue Code.
2. Exercise Price. The exercise price to purchase shares of the stock
shall be $1.00 {$0.25} per share, which is the approximate Fair Market Value of
the stock on the date of this Agreement.
3. Period of Exercise. The Option will expire at 5:00 p.m. on the date
(the "Expiration Date") five years from the date of this Agreement. The Option
may be exercised only while the Employee is actively employed by the Company and
as provided in Section 6, dealing with termination of employment.
4. Vesting of Options. The Option will vest as follows:
(a) Prior to completion of the closing for the purchase of the
assets of World Web Wonders, Inc. by the Company, scheduled to be
effective March 1, 1997 (the "Closing Date"), the option may not be
exercised.
(b) As of the Closing Date, the option may be exercised for
five thousand (5,000) {Twenty Thousand (20,000)}shares.
(c) On and after the first anniversary of the effective date
of this Agreement, the option may be exercised for not in excess of
twenty thousand (20,000) {Eighty Thousand (80,000)}shares;
(d) On or after the second anniversary of the effective date
of this Agreement, the Option may be exercised for not in excess of
thirty-five thousand (35,000) {One Hundred Forty Thousand
(140,000)}shares;
(e) On and after the third anniversary of the effective date
of this Agreement, the Option may be exercised at any time and from
time to time within its terms in whole or in part, but it shall not be
exercisable after the Expiration Date.
5. Transferability. This Option is not transferable except by will or
the laws of descent and distribution and may be exercised during the lifetime of
the Employee only by the Employee, or if exercised following the Employee's
death, by the Employee's legal representative upon presenting evidence of
authority to act on behalf of Employee's estate acceptable to the Company.
6. Termination of Employment. In the event that employment of the
Employee with the Company is terminated, the Option may be exercised (to the
extent exercisable at the date of termination) by the Employee within three
months after the date of termination; provided, however, that:
a. If the Employee's employment is terminated because Employee
is disabled within the meaning of Internal Revenue Code ss. 422, the
Employee shall have one year rather than three months to exercise the
Option (to the extent exercisable at the date of termination).
b. If the Employee dies, the Option may be exercised (to the
extent exercisable by the Employee at the date of death) by the legal
representative of Employee or by a person who acquired the right to
exercise such option by bequest or inheritance or by reason of the
death of the Employee, but the Option must be exercised within one year
after the date of the Employee's death.
c. If the Employee's employment is terminated for cause, this
Option shall terminate immediately.
d. Notwithstanding the foregoing, in no event (including
disability or death of the Employee) may this Option be exercised after
the Expiration Date.
7. No Guarantee of Employment. This Agreement shall in no way restrict
the right of the Company to terminate Employee's employment at any time, subject
to the terms of the Employment Agreement between the Company and Employee of
even date herewith.
8. Method of Exercise. The Option may be exercised, subject to the
terms and conditions of this Agreement, by written notice to the Company. The
notice shall be in the form attached to this Agreement and will be accompanied
by payment (in such form as the Company may specify) of the full purchase price
of the shares to be issued, and in the event of an exercise
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under the terms of paragraphs 6(a) and 6(b) hereof, appropriate proof of the
right to exercise the Option. The Company will issue and deliver certificates
representing the number of shares purchased under the Option, registered in the
name of the Employee (or other purchaser under paragraphs 6(a) and 6(b) hereof)
as soon as practicable after receipt of the notice. The Employee does not have
any rights or privileges as a stockholder with respect to any Shares to be
issued upon exercise of the Option until the date of payment therefor to the
Company.
9. Withholding; Taxable Income. In any case where withholding is
required or advisable under federal, state or local law in connection with any
exercise by Employee hereunder, the Company is authorized to withhold
appropriate amounts from amounts payable to Employee, or may require Employee to
remit to the Company an amount equal to such appropriate amounts.
Employee acknowledges and understands that under the provisions of the
Internal Revenue Code as presently in effect, the Employee will have taxable
compensation income at the date of exercise of the Option equal to the
difference between the purchase price under the Option and the then Fair Market
Value of the Stock. Employee specifically agrees that as a condition to
permitting exercise, the Company may require that appropriate arrangements for
withholding be made with the Employee as provided above.
10. Adjustment in Capitalization. In the event of any change in the
outstanding common stock of the Company by reason of a stock dividend or split,
recapitalization, reclassification, or other similar corporate change, the
aggregate number of Shares subject to the Option will be appropriately adjusted
by the Board of Directors of the Company, whose determination is final and
conclusive, except that fractional shares will be rounded to the nearest whole
share. In any such case, the number and kind of shares that are subject to the
Option and the Option exercise price per share will be proportionately adjusted
without any change in the aggregate Option price to be paid upon exercise of the
Option.
11. Amendment, Modification and Termination of Agreement. The Board of
Directors of the Company may at any time terminate, and from time to time may
amend or modify this Agreement; provided, however, that no amendment,
modification, or termination of this Agreement may in any manner adversely
affect the Option without the consent of the Optionee.
12. Securities Regulations.
12.1 Registration. In the event that the Company deems it
necessary or desirable to register or qualify the Option or any Shares
with respect to which the Option has been granted or exercised under
the Securities Act of 1933, as amended, or any other applicable statute
or regulation, the Optionee will cooperate with the Company and take
such action as is necessary to permit registration or qualification of
the Option or the Shares. The foregoing notwithstanding, the Company
has no obligation to register the Option or any Shares.
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12.2 Investment Intent. Unless the Company has determined that
the following representation is unnecessary, each person exercising any
portion of the Option will be required, as a condition to the issuance
of Shares pursuant to exercise of the Option, to make a representation
in writing (a) that he or she is acquiring the Shares for his or her
own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, (b) that before
any transfer in connection with the resale of the Shares, he or she
will obtain the written opinion of counsel for the Company, or other
counsel acceptable to the Company, that the Shares may be transferred.
The Company may also place a stop transfer order with its transfer
agent with respect to the Shares and require that the certificates
representing the Shares contain legends reflecting the foregoing.
12.3 Restrictions on Issuance of Shares. Notwithstanding the
provisions of Section 8, the Company may delay the issuance of Shares
and the delivery of a certificate for any Shares until one of the
following conditions is satisfied:
(a) The Shares with respect to which the Option has
been exercised are at the time of issuance registered under
applicable federal and state securities laws as now in force
or hereafter amended;
(b) A no-action letter in respect of the issuance of
the Shares has been obtained by the Company from the
Securities and Exchange Commission and any applicable state
securities commissioner; or
(c) Counsel for the Company has given an opinion,
which opinion will not be unreasonably conditioned or
withheld, that the Shares are exempt from registration under
applicable federal and state securities laws as now in force
or hereafter amended.
It is intended that all exercises of the Option will be
effective, and the Company will make reasonable efforts to bring about
compliance with the above conditions within a reasonable time, except
that the Company is under no obligation to cause a registration
statement or a post-effective amendment to any registration statement
to be prepared at its expense solely for the purpose of covering the
issuance of Shares in respect of which the Option may be exercised.
13. Miscellaneous.
13.1 Requirements of Law. The granting of the Option and the
issuance of Shares are subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
13.2 Choice of Law and Venue. This Agreement is made under and
must be governed by the laws of the State of Minnesota, and each of the
parties hereto consents to
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venue any suit or action under or with regard to this Agreement in an
appropriate court with jurisdiction in Hennepin County, Minnesota.
13.3 Notices. All notices, requests and other communications
from either party to the other hereunder must be given in writing and
will be deemed to have been duly given if personally delivered, or sent
by first class, certified mail, return receipt requested, postage
prepaid, to the party at the address as provided below, or to such
other address as such party may hereafter designate by written notice
to the other party:
(a) If the Company, to the address of its then
principal office; and
(b) If to the Optionee, to the address last shown in
the records of the Company, which as of the date of this
Agreement is as follows:
______________________
______________________
______________________
13.4 No Obligation to Exercise. The granting of the Option
imposes no obligation upon the holder thereof to exercise the Option.
13.5 Amendments; Final Agreement. This Agreement contains the
complete and final understanding of the parties with respect to the
subject matter hereof and supersedes all prior understandings and
statements, written and oral. This Agreement may not be amended except
in a written instrument signed by the party against whom enforcement is
sought.
13.6 Counterparts. This Agreement may be executed in
counterparts, each of which is an original and one in the same
instrument.
13.7 Headings. Headings and captions used in this Agreement
are for convenience and do not affect the meaning hereof.
Executed to be effective as of the date first written above
Profile National Business Directory, Inc.
By /s/ Xxxxx X. Xxxx
-----------------------------
Xxxxx X. Xxxx
Its: President
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PROFILE NATIONAL BUSINESS DIRECTORY, INC.
NOTICE OF EXERCISE OF STOCK OPTION ISSUED
To: President
Profile National Business Directory, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
I hereby exercise my Option dated , 1997 to purchase shares of $0.01
par value common stock of the Company at the option exercise price of $1.00 per
share. Enclosed is a certified or cashier's check in the total amount of $ , or
payment in such other form as the Company has specified. I acknowledge that I
may be required to execute a Subscription and Investment Representation
Agreement prior to these shares being issued, and I further acknowledge that I
must agree to be bound by any then existing Shareholders Agreement covering
substantially all of the Company's Shares.
I request that my shares be issued to me as follows:
--------------------------------
(Print your name in the form in which you wish to have the shares registered)
-----------------------------
(Social Security Number)
-----------------------------
(Street and Number)
-----------------------------
(City) (State) (Zip Code)
Dated: ________________, __________.
Signature: _____________________
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