Exhibit 3.16
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (this "Agreement") is made as of April 18,
1997 between Food Extrusion, Inc., a Nevada corporation (the "Company"), and
Xxxxx X. Xxxxx (the "Executive").
WHEREAS, the Company's Board of Directors adopted a resolution on April
4, 1997 (the "Resolution") approving an employment agreement between Company and
Executive (the "Employment Agreement");
WHEREAS, the Resolution and the Employment Agreement provide for the
granting of a stock option to Executive subject to the terms set forth herein.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. The Company hereby evidences and confirms the grant to the
Executive on the date hereof (the "Date of Grant") the option (the "Option") to
purchase 2,000,000 shares of Company Common Stock (the "Shares") at an option
price of $2.00 per share (the "Option Price"). The Option shall expire on April
18, 2007 (the "Expiration Date"), subject to earlier cancellation or termination
as provided herein.
2. Subject to the other provisions contained herein regarding
the exercisability of the Option, this Option shall become exercisable only as
provided in this Section 2.
(a) Except as otherwise provided in paragraph (b),
this Option shall become exercisable with respect to: 666,667
of the Shares as of the date hereof; an additional 666,667
Shares on April 15, 1998; and the final 666,666 Shares on
April 15, 1997.
(b) Notwithstanding the foregoing, the Option shall
immediately vest and become exercisable in full upon the
Executive's termination of employment by reason of death or
permanent disability or termination of Executive's employment
without Cause or for Good Reason (as such terms are defined in
the Employment Agreement). For purposes hereof, a permanent
disability means the Executive's inability to carry out his
obligations under the Employment Agreement by reason of any
medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months.
3. In the event of a termination of the Executive's employment
with the Company while any portion of the Option remains unexercised, the
Executive's rights to exercise the Option shall be exercisable only as follows:
(a) Termination Without Cause or for Good Reason. If
the Executive's employment is involuntarily terminated by the
Company other than for Cause or if terminated by Executive for
Good Reason, the Executive may, until 12 months following the
date of such termination, exercise the Option with respect to
all or any of the Shares whether or not vested as of the time
of termination. For purposes hereof, the provisions of the
Employment Agreement shall apply in determining whether the
Executive's employment has been involuntarily terminated by
the Company other than for Cause or terminated by Executive
for Good Reason.
(b) Death or Permanent Disability. If the Executive's
employment terminates by reason of death or permanent
disability, his Option may be exercised during the 12-month
period following such termination.
(c) Termination in Other Circumstances. If the
Executive's employment terminates in circumstances not
described in clauses (a) or (b), the Executive may, within 60
days following such termination, exercise the Option with
respect to such number of Shares as to which the Option is
exercisable (or would be exercisable if his employment had not
terminated) on the date of exercise, as determined pursuant to
Section 2.
Notwithstanding the foregoing, the Option shall in no event be exercisable in
whole or in part after the Expiration Date.
4. (a) Except as provided in paragraph (b), the
Option is not transferable by the Executive other than by
reason of Executive's death, and is exercisable, during the
Executive's lifetime, only by the Executive.
(b) Notwithstanding the provisions of paragraph
(a):
(i) In the event of the Executive's
incapacity, the Option may be exercised by the
conservator or the agent under a Durable Power of
Attorney executed by Executor;
(ii) Upon the Executive's death, the Option
is transferable by will, by a revocable or
irrevocable trust established by the Executive, or by
a written beneficiary designation executed by the
Executive and delivered to the Company prior to the
Executive's death;
(iii) The Executive may transfer the Option
to the Executive's spouse and/or issue or trusts for
the benefit of the Executive, the Executive's spouse,
and/or the Executive's issue.
5. In the event of any change in the outstanding Company
Common Stock by reason of any stock dividend, stock split, combination of
shares, recapitalization, or other similar change in the Common Stock of the
Company, or in the event of the merger or consolidation of the Company into or
with any other corporation or the reorganization of the Company, the number of
Shares, the Option Price per Share, and the total number of Shares for which the
Option may be exercised shall be appropriately adjusted by the Company to
preserve the value of this award.
6. If the Company sells shares of its capital stock to any of
its shareholders pursuant to a rights offering, Executive shall have the right
to participate in such rights offering by having the Company grant him an option
to purchase that number of shares of capital stock (the "Rights Shares") that he
could purchase in such offering if all of his Shares subject to the Option,
whether or not vested, were issued and outstanding shares of Common Stock. The
exercise price for the Rights Shares shall be the lesser of the Option Price or
the price to be paid by shareholders in such rights offering. The option to
purchase the Rights Shares shall vest in accordance with Section 2, above and be
subject to the terms and conditions set forth in this Agreement.
7. In order to exercise the Option, in whole or in part, the
Executive shall give written notice to the Company, specifying the number of
Shares to be purchased and the purchase price to be paid, and accompanied by the
payment of the purchase price. Such purchase price may be paid in cash, a
certified check, or a bank check payable to the Company, or in whole shares of
Common Stock evidenced by negotiable certificates, valued at their fair market
value on the date of exercise, or in a combination of the foregoing.
Alternatively, the Option may be exercised, in whole or in part, by delivering a
properly executed exercise notice together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
necessary to pay the purchase price, and such other documents as the Company may
require. Upon receipt of payment, the Company shall deliver to the Executive (or
to any other person entitled to exercise the Option) a certificate or
certificates for such Shares. If certificates representing shares of Common
Stock are used to pay all or part of the purchase price of the Option, separate
certificates shall be delivered by the Company representing the same number of
shares as each certificate so used and an additional certificate shall be
delivered representing the additional shares to which the Executive is entitled
as a result of exercise of the Option.
8. The Option shall be exercised only with respect to full
Shares; no fractional Shares shall be issued.
9. As a condition to the issuance of Shares under the Option,
the Executive agrees to remit to the Company at the time of exercise any taxes
required to be withheld by the Company under the applicable laws or other
regulations of any governmental authority, whether federal, state or local, and
whether domestic or foreign. The Company shall promptly remit such taxes to the
applicable governmental authority.
10. If the Executive so requests in writing, shares purchased
upon exercise of the Option may be issued in the name of the Executive and
another person jointly with the right of survivorship, or in the name of a
revocable trust of which the Executive is the grantor.
11. The Option does not qualify as an incentive stock option
under Section 422 of the Internal Revenue Code.
12. This Option shall be binding upon and inure to the benefit
of any successor or assignee of the Company and to any executor, legatee, or
distributee or transferee entitled by law or the provisions of this Agreement to
the Executive's rights hereunder.
13. This Agreement is entered into, and shall be construed and
enforced, under the laws of the State of California, and shall not be modified
except by written agreement signed by the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
Food Extrusion, Inc.,
a Nevada corporation
By:/s/Xxxxxxxx Xxxxxx By:/s/Xxxxxx X. XxXxxx
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Its:President Its:Chairman of the Board
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
