EXHIBIT 10.15
XXXXX XxxXXXXXX INCORPORATED
AGREEMENT TO GRANT STOCK OPTION
TO: Xxxx XxXxxxx
We are please to inform you that Xxxxx XxxXxxxxx Incorporated (the
"Corporation") hereby agrees to grant to you a stock option (the "Option") under
the Stock Option Plan of the Corporation in effect on the date of such grant
(the "Plan"). The grant of the Option will be conditioned upon your first
achieving gross production of at least $750,000 during any twelve consecutive
months (the "Current Production Goal") prior to June 16, 1999 (the "Goal
Deadline"). The option will entitle you to purchase a number of shares of the
Common Stock of the Corporation, equal to $25,000 divided by the Denominator
[the lower of $24.00, as proportionately adjusted to reflect any subdivision,
combination, reclassification or other recapitalization of the Company's common
stock into a greater or lesser number of shares (the "Ceiling Price"), or the
fully diluted net book value per share as of the date the Current Production
Goal is reached]. No fractional options shall be granted; round the result to
the nearest whole number divisible by 25. The minimum number of options which
can be earned under this agreement is 1,050. The maximum number of options
which can be earned under this agreement is 1,450.
For example, if the fully diluted net book value per share is $17.18 as of the
date the Current Production Goal is reached, then would earn options on 1,450
shares. ($25,000/$17.18 = 1,455, rounded down to 1,450). If the fully diluted
net book value per share is $24.00 as of the date the Current Production Goal is
reached, then you would earn options on 1,050 shares. ($25,000/$24.00 = 1,042,
rounded up to 1050.)
The per share exercise price of the Option will be the book value per share of
the Corporation's Common Stock on the rate of grant of the Option (which is
expected to be on or near the date you achieve the Current Production Goal). In
the event that book value per share on the date of grant is higher then the
Denominator, at such time as you exercise all or any portion of the Option, the
Corporation will make a cash payment to you (the "Equalization Payment") in an
amount equal to the difference between the Denominator and book value per share
on the date grant for each share purchased. The Equalization Payment will be
treated as ordinary income to you. (In the event that, prior to the Goal
deadline, the Option has not yet been granted, and a change of control of the
Corporation occurs that would result, under the Stock Option Plan of the
Corporation then available for option grants, in acceleration of vesting of
outstanding options, then, prior to such change of control, the Corporation
shall grant the Option, and the Option shall be vested and exercisable, whether
or not the Current Production Goal has been achieved, all subject to the terms
of such Stock Option Plan.)
The other terms of the Option will be as set forth in the Plan and in the
Option Letter Agreement evidencing the Option. It is anticipated that certain
of the terms to which the Option will be subject will be as follows:
Exercise: During your lifetime only you will be able to exercise the
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Option. The Option may also be exercised in the event of your death by the
personal representative of your estate or the beneficiary thereto. The
Administrator of the Plan may, in its sole discretion at the time of exercise,
determine that the exercise of the Option is subject to your prior execution of
a Shareholders Agreement, in the form in use at the time of the exercise,
whereby under certain circumstances you grant to the Corporation a right of
first offer to purchase the shares acquired by you upon exercise of the Option.
Payment for Shares: The Option may be exercised by the delivery of cash, a
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personal check (unless at the time of exercise, the Administrator of the Plan
determines otherwise), or a bank certified or cashier's check.
Nature of the Option: The Company will use its best efforts to provide that
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the Option is treated as an incentive stock option or its equivalent.
Termination: The Option will terminate two (2) years from the date of
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grant thereof or upon the earlier cessation of your relationship with the
Corporation or a related corporation, unless cessation is due to death or total
disability, in which case the Option shall terminate three (3) months after
cessation of such relationship.
Transfer of Option: The Option will not be transferable except by will
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or by applicable laws of descent and distribution.
The effective date of this Agreement is the 16th day of June, 1994.
Very truly yours,
XXXXX XxxXXXXXX INCORPORATED
By
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Xxxxxx X. Xxxxxxx, Xx.
Secretary
