Exhibit 10.2
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is entered into effective
as of January 22, 2001 (the "Date of Grant"), by and between Xxxxx Xxxxxx (the
"Optionee") and Travelzoo Inc, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Optionee and the Company have entered into a contribution
agreement of even date herewith (the "Contribution Agreement"), according to
which the Optionee has agreed to contribute 1,000 shares of common stock of
Silicon Channels Corporation, a California corporation, to the Company in
exchange for shares of the Company's common stock, par value $.01 (the "Common
Stock") plus a stock option to purchase shares of the Common Stock (the
"Option"); and
WHEREAS, on January 19, 2001, an independent committee of disinterested
directors of the Company unanimously approved the Contribution Agreement and the
grant of the Option to the Optionee; and
WHEREAS, the Company has reserved such number of shares of the Company's
Common Stock as may from time to time be issuable upon exercise of the Option.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing recitals and the promises
and covenants contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties
represent, covenant and agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee, and the
Optionee hereby accepts, an Option, as modified by the Stock Split, to purchase
from the Company 2,158,349 shares of the Company's Common Stock (the "Option
Shares") at an exercise price of $1.00 per share (the "Exercise Price"), subject
to the terms and conditions set forth in this Agreement.
This Option is not intended to be and shall not be treated as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended.
2. Vesting Schedule. This Option shall vest and shall be exercisable, in
whole or in part, immediately upon execution of this Agreement.
3. Term of Option. This Option may be exercised at any time from the Date
of Grant in accordance with the terms of this Agreement. This Option shall
terminate ten (10) years from the Date of Grant subject to the restrictions and
limitations of Section 6 below.
4. Method of Exercise.
(a) This Option shall be exercisable by delivery of a written exercise
notice which shall state the Optionee's election to exercise the Option, the
number of Option Shares with respect to which the Option is being exercised, and
such other warranties, representations and agreements regarding Optionee's
investment intent with respect to such shares of Common Stock as may be required
by the Company to comply with applicable securities laws (the "Exercise
Notice"). The Exercise Notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to any one of the Company's Directors.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all exercised shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by the aggregate Exercise Price.
(b) Payment of the aggregate Exercise Price for Option Shares being
purchased may be made (i) in cash or by check, or (ii) by any other means of
exercise authorized from time to time by the Company's Board of Directors.
(c) No shares of Common Stock shall be issued pursuant to the exercise
of the Option unless such issuance and such exercise shall comply with all
relevant provisions of law and the requirements of any stock exchange upon which
the Common Stock may then be listed. Assuming such compliance, for income tax
purposes the shares of Common Stock shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
shares.
5. Investment Representation. The Optionee hereby represents and warrants
to the Company that the Optionee, by reason of the Optionee's relationship to
the Company and Optionee's access to all financial and other information
regarding the Company or Optionee's business or financial experience (or the
business or financial experience of the Optionee's professional advisors who are
unaffiliated with and who are not compensated by the Company or any affiliate or
selling agent of the Company, directly or indirectly), has the capacity to
protect the Optionee's own interests in connection with the transactions
contemplated under this Agreement.
6. Death of Optionee. In the event of Optionee's death while this Option
remains exercisable, the Optionee's legal representative or representatives or
the persons entitled to do so under the Optionee's last will and testament or
under applicable intestate laws shall have the right to exercise this Option at
any time within a period of one (1) year after death, but not after such death
if such death occurs after ten (10) years from the Date of Grant.
7. Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split or similar change affecting the
Common Stock, a substitution or proportionate adjustment shall be made in the
kind, number and exercise price of shares of Common Stock subject to the
unexercised portion of the Option. The terms of such substitution or adjustment
shall be as reasonably determined by the Company's Board of Directors.
8. Non-Transferability of Option. Without the express written consent of
the Board of Directors of the Company, this Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during Optionee's lifetime only by Optionee. The terms of this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee.
9. Securities Laws Requirements. This Option shall not be exercisable to
any extent, and the Company shall not be obligated to transfer any Option Shares
to Optionee upon exercise of such Option, if such exercise, in the opinion of
counsel for the Company, would violate the Securities Act of 1933 (the "Act")
(or any other federal or state statutes having similar requirements as may be in
effect at that time). Further, the Company may require as a condition of
transfer of any Option Shares pursuant to any exercise of the Option that
Optionee furnish a written representation that he is purchasing or acquiring the
Option Shares for investment and not with a view to resale or distribution to
the public. The Optionee hereby represents and warrants that he understands that
the Option Shares are "restricted securities," as defined in Rule 144 under the
Act, and that any resale of the Option Shares must be in compliance with the
registration requirements of the Act, or an exemption therefrom, and with the
requirements of any applicable "Blue Sky" law. Each certificate representing
Option Shares shall bear the legends set forth below and any other legends that
may be required by the Company or by any federal or state securities laws:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES THEREUNDER,
AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES
EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER. SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF
THESE SHARES.
Further, if the Company decides, in its sole discretion, that the listing
or qualification of the Option Shares under any securities or other applicable
law is necessary or desirable, the Option shall not be exercisable, in whole or
in part, unless and until such listing or qualification, or a consent or
approval with respect thereto, shall have been effected or obtained free of any
conditions not acceptable to the Company.
10. No Obligation to Register Option Shares. The Company shall be under no
obligation to register the Option Shares pursuant to the Act or any other
federal or state securities laws.
11. Market Stand-Off. In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective registration
statement filed under the Act, for such period as the Company or its
underwriters may request (such period not to exceed 180 days following the date
of the applicable offering), the Optionee shall not, directly or indirectly,
sell, make any short sale of, loan, hypothecate, pledge, offer or grant any
option or other contract for the purchase of, purchase any option or other
contract for the sale of, or otherwise dispose of or transfer, or agree to
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engage in any of the foregoing transactions with respect to, any Option Shares
acquired under this Agreement without the prior written consent of the Company
or its underwriters.
12. Protections Against Violations of Agreement. No purported sale,
assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the Option Shares by the Optionee in
violation of the provisions of this Agreement or the Certificate of
Incorporation of the Company, will be valid, and the Company will not transfer
any of said Option Shares on its books nor will any of said Option Shares be
entitled to vote, nor will any dividends be paid thereon, unless and until there
has been full compliance with said provisions to the satisfaction of the
Company. The foregoing restrictions are in addition to and not in lieu of any
other remedies, legal or equitable, available to enforce said provisions.
13. Withholding Requirements. The Company's obligations under this
Agreement shall be subject to all applicable tax and other withholding
requirements, and the Company shall, to the extent permitted by law, have the
right to deduct any withholding amounts from any payment or transfer of any kind
otherwise due to Optionee.
14. Taxation Upon Exercise of Option. Optionee understands that, upon
exercising the Option, he may recognize income for tax purposes, both federal
and state, in an amount equal to the excess of the then fair market value of the
Option Shares over the Exercise Price. However, the timing of this income
recognition may be deferred for up to six months if Optionee is subject to
Section 16 of the Securities Exchange Act of 1934, as amended. If Optionee is an
employee, the Company will be required to withhold from Optionee's compensation,
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income. The Optionee shall satisfy
his tax withholding obligation arising upon the exercise of this Option out of
Optionee's compensation or by payment to the Company.
15. Entire Agreement and Waiver. This Agreement contains the entire
agreement between the parties hereto related to the subject matter hereof and
supersedes all prior and contemporaneous agreements, arrangements, negotiations
and understandings between the parties hereto relating thereto. There are no
other agreements, understandings, statements, promises or inducements, oral or
otherwise, contrary to the terms of this Agreement. No representations,
warranties, covenants or conditions, express or implied, whether by statute or
otherwise, other than as set forth herein, have been made by any party hereto.
No waiver of any term, provision or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
shall constitute a waiver of any other provision hereof, whether or not similar,
nor shall such waiver constitute a continuing waiver, and no waiver shall be
binding unless executed in writing by the party making the waiver.
16. Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the laws of the State of California, without
giving effect to the principles of conflicts of laws thereof.
17. Counterparts. This Agreement may be executed in several counterparts,
and all counterparts so executed shall constitute one Agreement, binding on all
of the parties hereto, notwithstanding that all of the parties are not signatory
to the original or the same counterpart.
18. Amendment. This Agreement may be altered or amended only by an
instrument in writing signed by each of the parties hereto, and such alteration
or amendment shall be binding upon the parties, and all other persons or
entities.
19. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted herefrom.
20. Notices. All notices and other communications under this Agreement
("Notices") shall be in writing and shall be deemed to have been duly given (i)
on the date of service if served personally on the party to whom notice is to be
given, or (ii) when dispatched, during the normal business hours of the
addressee, by customary means of telefacsimile, on the date dispatched or, if
dispatched after the recipient's normal business hours, at the opening of
business on the next business day, or (iii) on the third business day after
mailing if mailed to the party to whom notice is to be given, by first class
mail registered or certified, postage prepaid; provided, however, that Notices
to the Company concerning the exercise of the Option shall be deemed to have
been duly given only on the date actually received by the Company. Notices to
(i) the Company shall be addressed to any one of the Company's Directors at the
Company's corporate headquarters, and (ii) the Optionee at his address in the
Company's records.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first above written.
OPTIONEE: TRAVELZOO INC.,
a Delaware corporation
/s/ Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx Xxxxx Xxxxxx
President
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