NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of February 19, 1998, is made by and between
Scoop, Inc., a Delaware corporation hereinafter referred to as "Company," and
Xxxxxxx Xxxx a director of the Company, hereinafter referred to as "Optionee":
WHEREAS, the Company previously granted the Optionee options to
purchase an aggregate of 115,000 shares of its Common Stock pursuant to The 1996
Stock Incentive Plan of Scoop, Inc. (the terms of which are hereby incorporated
by reference and made a part of this Agreement); and
WHEREAS, such options are evidenced by two Non-Qualified Stock Option
Agreements each dated July 31, 1996 between the Optionee and the Company's
predecessor, Scoop, Inc., a California corporation (collectively, the "Prior
Agreements"); and
WHEREAS, the Company's Board has determined that it would be to the
advantage and best interest of the Company and its shareholders to amend certain
terms of the options previously granted to the Optionee as an inducement for the
Optionee to remain in the service of the Company or its Subsidiaries and as an
incentive for increased efforts during such service; and
WHEREAS, the Company and the Optionee desire to set forth the revised
terms of said options in this Agreement and to supercede the Prior Agreements
with this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
SECTION 1.1 - BOARD
"Board" shall mean the Board of Directors of the Company.
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SECTION 1.2 - CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.3 - COMMITTEE
"Committee" shall mean the Compensation Committee of the Board,
or another committee of the Board, appointed as provided in Section 9.1 of the
Plan.
SECTION 1.4 - COMPANY
"Company" shall mean Scoop, Inc., a Delaware corporation.
SECTION 1.5 - DIRECTOR
"Director" shall mean a member of the Board.
SECTION 1.6 - EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.7 - GRANT DATE
"Grant Date" shall mean July 31, 1996.
SECTION 1.8 - OFFICER
"Officer" shall mean an officer of the Company, as defined in
Rule 16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
SECTION 1.9 - OPTION
"Option" shall mean the non-qualified stock option to purchase
Common Stock of the Company granted under this Agreement.
SECTION 1.10 - PLAN
"Plan" shall mean The 1996 Stock Incentive Plan of Scoop, Inc.
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SECTION 1.11 - RULE 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
SECTION 1.12 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.13 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as
amended.
SECTION 1.14 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
SECTION 1.15- -TERMINATION OF DIRECTORSHIP
"Termination of Directorship" shall mean the time when the
Optionee ceases to be a Director of the Company for any reason including, but
not by way of limitation, a termination by resignation, failure to be
re-elected, death, disability or retirement. The Board, in its sole and
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of the Optionee's agreement to continue to serve
on the Company's Board and for other good and valuable consideration, effective
as of the Grant Date, the Company irrevocably grants to the Optionee the option
to purchase any part or all of an aggregate of one hundred fifteen thousand
(115,000) shares of its Common Stock upon the terms and conditions set forth in
this Agreement.
SECTION 2.2 - PURCHASE PRICE
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The purchase price of the shares of stock covered by the Option
shall be $1.375 per share without commission or other charge.
SECTION 2.3 - CONSIDERATION TO COMPANY
In consideration of the granting of this Option by the Company,
the Optionee agrees to render faithful and efficient services as a Director of
the Company. Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue as a Director of the Company, or shall interfere
with or restrict in any way the rights of the Company and its Subsidiaries,
which are hereby expressly reserved, to discharge the Optionee at any time for
any reason whatsoever, with or without cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
The Committee shall make adjustments with respect to the Option
in accordance with the provisions of Section 10.3 of the Plan.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option is immediately exercisable with respect to 77,500
shares and the remaining 37,500 shares shall become exercisable on a quarterly
basis in eight (8) equal cumulative installments as follows: the first
installment shall become exercisable beginning on the date twenty-one (21)
months following the Grant Date (i.e., April 30, 1998) and one additional
installment will become exercisable every three months thereafter (i.e., on the
dates twenty-four (24) months, twenty-seven (27) months, thirty (30) months,
etc. following the Grant Date), with the eighth installment becoming exercisable
on the date forty-two (42) months following the Grant Date.
(b) No portion of the Option which is unexercisable at
Termination of Directorship shall thereafter become exercisable.
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative.
Each such installment which becomes exercisable pursuant to Section 3.1 shall
remain exercisable until it becomes unexercisable under Section 3.3.
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SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of five (5) years from the Grant Date; or
(b) The expiration of two (2) years from the date of the
Optionee's Termination of Directorship if such termination results from
Optionee's removal, failure to get re-elected, death, permanent and total
disability (within the meaning of Section 22(e)(3) of the Code), or voluntary
resignation following the earlier of August 1, 1998 or the date that a change of
control of the Company occurs; or
(c) The expiration of three (3) months from the date of the
Optionee's Termination of Directorship if such termination results from the
Optionee's voluntary resignation prior to the earlier of August 1, 1998 or the
date that a change of control of the Company occurs.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
In the event of the merger or consolidation of the Company with
or into another corporation, or the acquisition by another corporation or person
or related group of persons of all or substantially all of the Company's assets
or fifty percent (50%) or more of the Company's then outstanding voting stock,
at the effective date of such event this Option shall be immediately exercisable
as to all of the shares covered hereby, notwithstanding that this Option may not
yet have become fully exercisable under Section 3.1(a); provided, however, that
this acceleration of exercisability shall not take place with respect to any
portion of this Option which becomes unexercisable under Section 3.3 prior to
said effective date.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only the Optionee may
exercise the Option or any portion thereof. After the death of the Optionee,
any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by Optionee's personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
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SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior
to the time when the Option or portion thereof becomes unexercisable under
Section 3.3; provided, however, that each partial exercise shall be for not less
than one hundred (100) shares (or the minimum installment set forth in Section
3.1, if a smaller number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary of the Company or his office of all of the
following prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules
established by the Committee stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion; and
(b) (i) Full cash payment to the Secretary of the Company for
the shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee, duly endorsed for transfer to
the Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option, with a Fair Market Value on the date of delivery equal to
the aggregate exercise price of the Option or exercised portion thereof; or
(iii) With the consent of the Committee, a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code or successor provision)
and payable upon such terms as may be prescribed by the Committee. The
Committee may also prescribe the form of such note and the security to be
given for such note. The Option may not be exercised, however, by delivery
of a promissory note or by a loan from the Company when or where such loan
or other extension of credit is prohibited by law; or
(iv) With the consent of the Committee, property of any
kind which constitutes good and valuable consideration; or
(v) With the consent of the Committee, a notice that the
Optionee has placed a market sell order with a broker with respect to
shares of the Company's Common
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Stock then issuable upon exercise of the Option, and that the broker has
been directed to pay a sufficient portion of the net proceeds of the sale
to the Company in satisfaction of the Option exercise price; or
(vi) With the consent of the Committee, any combination of
the consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for the Optionee's own account, for investment and without
any present intention of distributing or reselling said shares or any of them
except as may be permitted under the Securities Act and then applicable rules
and regulations thereunder, and that the Optionee or other person then entitled
to exercise such Option or portion will indemnify the Company against and hold
it free and harmless from any loss, damage, expense or liability resulting to
the Company if any sale or distribution of the shares by such person is contrary
to the representation and agreement referred to above. The Committee may, in
its absolute discretion, take whatever additional actions it deems appropriate
to insure the observance and performance of such representation and agreement
and to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or any Subsidiary) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Optionee, duly endorsed for transfer,
with a Fair Market Value equal to the sums required to be withheld, or (ii)
shares of the Company's Common Stock issuable to the Optionee upon exercise of
the Option with a Fair Market Value equal to the sums required to be withheld,
may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option.
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SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option,
or any portion thereof, may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of the Option or portion thereof prior to fulfillment of all
of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
the Company (or any Subsidiary) is required to withhold upon exercise of the
Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
SECTION 4.5 - RIGHTS AS SHAREHOLDER
The holder of the Option shall not be, nor have any of the rights
or privileges of, a shareholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
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ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. In its absolute discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Committee under
the Plan and this Agreement except with respect to matters which under Rule
16b-3 or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee. All actions taken and all interpretations and determinations made by
the Committee or by the Board in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Committee or the Board shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Option.
SECTION 5.2 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part
thereof shall be sold, pledged, assigned, or transferred in any manner other
than by will or the laws of descent and distribution, unless and until such
Option has been exercised, or the shares underlying such Option have been
issued, and all restrictions applicable to such shares have lapsed. Neither the
Option nor any interest or right therein or part thereof shall be liable for the
debts, contracts or engagements of the Optionee or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
SECTION 5.3 - SHARES TO BE RESERVED
The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
SECTION 5.4 - NOTICES
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Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to Optionee at the address
given beneath Optionee's signature hereto. By a notice given pursuant to this
Section 5.4, either party may hereafter designate a different address for
notices to be given to such party. Any notice which is required to be given to
the Optionee shall, if the Optionee is then deceased, be given to the Optionee's
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 5.4. Any
notice to be given under the terms of this Agreement shall be in writing and
shall be deemed duly given when received if personally delivered; the day after
it is sent, if sent for next-day delivery by a recognized overnight delivery
service (e.g., FedEx); and three days after being sent by certified or
registered United States mail, return receipt requested.
SECTION 5.5 - TITLES
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - PRIOR AGREEMENTS
The Prior Agreements are hereby terminated and superceded in
their entirety by this Agreement and shall be of no further force or effect.
SECTION 5.7 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced
under the internal laws of the State of California without regard to conflicts
of laws thereof.
SECTION 5.8 - CONFORMITY TO SECURITIES LAWS
The Optionee acknowledges that the Plan is intended to conform to
the extent necessary with all provisions of the Securities Act and the Exchange
Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, including without limitation Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first written above.
SCOOP, INC.
By: /s/ Xxxx Xxxxxxxxxxx
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Xxxx Xxxxxxxxxxx
Chief Executive Officer
OPTIONEE
/s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
----------------------------
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Address
Optionee's Taxpayer
Identification Number:
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