Exhibit 10.16
PETCO ANIMAL SUPPLIES, INC.
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
----------------------------------------------------------------------
(Name of Optionee)
Number of Shares: _____ Exercise Price Per Share: $ ____
This Stock Option Agreement (this "Agreement") is made by and
between Petco Animal Supplies, Inc., a Delaware corporation, hereinafter
referred to as the "Company", and the Optionee whose name is set forth above,
hereinafter referred to as the "Optionee", effective as of
_______________________ (the "Grant Date").
1. GRANT OF OPTIONS. The Optionee has been granted certain options (the
"Options") to purchase shares of the Company's Common Stock, par value $.001 per
share, under the 1994 Stock Option and Restricted Stock Plan for Executive and
Key Employees of Petco Animal Supplies, Inc. (as amended and restated as of
October 2, 2000, the "Plan"). The terms of the Option are as follows:
Number of Per Share
Option Shares Exercise Price Expiration Date Type of Option
------------- -------------- --------------- --------------
NON-
__________ $ ____ ____________ QUALIFIED
OPTION
2. TERMS AND CONDITIONS. The Option shall be subject to this
Agreement and the Terms and Conditions of the
Stock Option Agreement (the
"Terms and Conditions"), which are attached as Exhibit A hereto and are
incorporated herein by this reference, the Plan and the Securityholders
Agreement described in Section 3, and, in the case the Option is designated
as an "incentive stock option," is contingent upon stockholder approval of
the Plan within 12 months of the adoption of the Plan. The Terms and
Conditions shall be part of this Agreement and shall be binding on the
Company and the Optionee. Capitalized terms not otherwise defined in this
Agreement shall have the meanings set forth in the Terms and Conditions and
the Plan.
3. SECURITYHOLDERS AGREEMENT. By executing this Agreement, the
Optionee shall become a party to and be bound by and subject to the terms and
conditions of the Securityholders Agreement, dated as of October 2, 2000,
among BD Recapitalization Holdings LLC, Petco Animal Supplies, Inc. and
Certain Securityholders of Petco Animal Supplies, Inc. (as amended, the
"Securityholders Agreement"), which is attached as Exhibit B hereto and is
incorporated herein by this reference. The Securityholders Agreement shall be
binding on the Optionee and the other parties thereto.
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IN WITNESS WHEREOF, the Company has caused this instrument
to be executed on its behalf by a duly authorized officer.
PETCO ANIMAL SUPPLIES, INC.
By: _______________________________
Title: _______________________________
Date: _______________________________
OPTIONEE
-----------------------------------
Date: __________________________
Address: _________________________
_________________________
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EXHIBIT A
TERMS AND CONDITIONS
OF THE
STOCK OPTION AGREEMENT
THESE TERMS AND CONDITIONS OF THE
STOCK OPTION AGREEMENT,
by and between Petco Animal Supplies, Inc., a Delaware corporation
hereinafter referred to as "Company," and the Optionee whose name is set
forth on the attached
Stock Option Agreement, hereinafter referred to as
"Optionee", shall be effective as of the Grant Date set forth in the attached
Stock Option Agreement:
WHEREAS, the Optionee has been granted Option, which shall
provide the Optionee with the right to purchase shares of the Company's
Common Stock, par value $.001 per share ("Common Stock"), effective as of the
date set forth in the
Stock Option Agreement, under the terms and subject to
the conditions set forth in the
Stock Option Agreement and these Terms and
Conditions; and
WHEREAS, the Option shall be subject to the terms and
conditions of the
Stock Option Agreement, these Terms and Conditions, the
Plan and the Securityholders Agreement; and
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 these Terms and
Conditions, 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.
SECTION 1.1 - BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 - CODE
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
SECTION 1.3 - COMMITTEE
"Committee" shall mean the Stock Option Committee of the
Board, appointed as provided in the Plan.
SECTION 1.4 - COMPANY
"Company" shall mean Petco Animal Supplies, Inc., a
Delaware corporation.
SECTION 1.5 - CONSULTANT
"Consultant" means any person retained, hired or employed
by the Company to provide advisory or other services to the Company, a Parent
Corporation or a Subsidiary, either on a full-time or part-time basis,
concurrently upon a Termination of Employment of such person.
SECTION 1.6 - DIRECTOR
"Director" shall mean a member of the Board.
SECTION 1.7 - EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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 option or incentive
stock option to purchase Common Stock, par value $.001 per share, of the
Company granted under the attached Stock Option Agreement and these Terms and
Conditions.
SECTION 1.10 - PARENT CORPORATION
"Parent Corporation" shall mean any corporation in an
unbroken chain of corporations ending with the Company if each of the
corporations other than the Company 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 1.11 - PLAN
"Plan" shall mean the 1994 Stock Option and Restricted
Stock Plan for Executive and Key Employees of Petco Animal Supplies, Inc., as
amended and restated as of October 2, 2000 and as amended from time to time
thereafter.
SECTION 1.12 - RULE 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended in the future.
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SECTION 1.13 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.14 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as
amended.
SECTION 1.15 - 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 1.16 - TERMINATION OF CONSULTANCY
"Termination of Consultancy" shall mean, as to a
Consultant, the time when the consultancy relationship between the Consultant
and the Company, a Parent Corporation or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by expiration or non-renewal of contractual agreement,
resignation, discharge, death or retirement. The Committee, in its absolute
discretion, shall determine the effect of all other matters and questions
relating to Termination of Consultancy.
SECTION 1.17 - TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company, a Parent
Corporation or a Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death or retirement, but excluding any termination where there is
a simultaneous reemployment by the Company, a Parent Corporation or a
Subsidiary. The Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to Termination of
Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment.
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ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
Effective as of the date set forth in the Stock Option
Agreement, the Optionee was granted the Option, under which the Optionee has
the irrevocable option to purchase any part or all of the aggregate number of
shares of Common Stock set forth in the Stock Option Agreement, upon the
terms and conditions set forth therein and in these Terms and Conditions and
the Plan and in the Securityholders Agreement, which is described in Section
3 of the Stock Option Agreement. The Option shall be an "incentive stock
option," as defined under Section 422 of the Code, if the Option is so
designated as set forth in the attached Stock Option Agreement and, if so
designated, the Option shall be contingent upon stockholder approval of the
Plan (as amended and restated as of October 2, 2000) within 12 months of the
adoption of the Plan (as so amended and restated). The Option is not an
"incentive stock option," as defined under Section 422 of the Code, if the
Option is designated as a non-qualified stock option in the attached Stock
Option Agreement. Any Option designated as an "incentive stock option" that
does not meet the requirements of Section 422 of the Code will be treated as
a non-qualified stock option.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of Common Stock covered by
the Option shall be the per share price set forth in the Stock Option
Agreement, without commission or other charge.
SECTION 2.3 - EMPLOYMENT/SERVICE RELATIONSHIP
Nothing in the Stock Option Agreement, these Terms and
Conditions or the Plan shall confer upon the Optionee any right to continue
in the employ or service of the Company, any Parent Corporation or any
Subsidiary or shall interfere with or restrict in any way the rights of the
Company, its Parent Corporations and its Subsidiaries, which are hereby
expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without cause.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall become vested and exercisable in five
equal and cumulative installments as follows:
(i) The first installment shall consist of 20% of
the shares and shall become vested and exercisable on the first
anniversary of the Grant Date;
(ii) The second installment shall consist of 20% of
the shares and shall become vested and exercisable on the second
anniversary of the Grant Date;
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(iii) The third installment shall consist of 20% of
the shares and shall become vested and exercisable on the third
anniversary of the Grant Date;
(iv) The fourth installment shall consist of 20% of
the shares and shall become vested and exercisable on the fourth
anniversary of the Grant Date;
(v) The fifth installment shall consist of 20% of
the shares and shall become vested and exercisable on the fifth
anniversary of the Grant Date.
(b) No portion of the Option which is not vested and is
unexercisable at Termination of Employment shall thereafter become
exercisable.
SECTION 3.2 - DURATION OF EXERCISABILITY
The Option shall remain exercisable until it becomes
unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
Except as provided otherwise herein, the Option may not be
exercised to any extent by anyone after the first to occur of the following
events:
(a) The expiration date of the Option set forth in
the Stock Option Agreement; or
(b) The later to occur of (i) the time of the
Optionee's Termination of Employment, or (ii) the time of the
Optionee's Termination of Consultancy, unless such Termination of
Employment or Termination of Consultancy results from his death, his
retirement, his disability or his being discharged not for good
cause; or
(c) The expiration of three (3) months from the
later to occur of (i) the date of the Optionee's Termination of
Employment, or (ii) the date of the Optionee's Termination of
Consultancy, by reason of his retirement or his being discharged not
for good cause, unless the Optionee dies within said three-month
period; or
(d) The expiration of one (1) year from the later to
occur of (i) the date of the Optionee's Termination of Employment by
reason of his disability, or (ii) the date of the Optionee's
Termination of Consultancy by reason of his disability; or
(e) The expiration of one (1) year from the date of
the Optionee's death; or
(f) The effective date of either the merger or
consolidation of the Company with or into another corporation, or
the acquisition by another corporation or person of all or
substantially all of the Company's assets or eighty percent (80%) or
more of the Company's then outstanding voting stock, or the
liquidation or dissolution of the Company, unless and to the extent
that the Committee waives this provision in
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connection with such transaction. At least ten (10) days prior to
the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Committee shall give the Optionee
notice of such event if the Option has then neither been fully
exercised nor become unexercisable under this Section 3.3; or
(g) The effective date of a "Drag-Along 100% Sale"
(in which case, the Option shall expire with respect to all of the
unexercised shares of Common Stock subject to the Option) or a
"Drag-Along 50% Sale" (in which case, the Option shall expire only
with respect to 50% of the unexercised shares of Common Stock
subject to the Option), as such terms are defined in the
Securityholders Agreement, dated as of October 2, 2000 among BD
Recapitalization Holdings LLC, Petco Animal Supplies, Inc. and
Certain Securityholders of Petco Animal Supplies, Inc., unless and
to the extent the Committee waives this provision in connection with
such event. At least ten (10) days prior to a Drag-Along 100% Sale
or a Drag-Along 50% Sale, the Committee shall give the Optionee
notice of such event if the Option has then neither been fully
exercised nor become unexercisable under this Section 3.3. The
Optionee may elect to exercise the Option immediately prior to a
Drag-Along 100% Sale or a Drag-Along 50% Sale on the condition that
such Drag-Along 100% Sale or Drag-Along 50% Sale is consummated.
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 his personal
representative or by any person empowered to do so under the Optionee's will
or under the then applicable laws of descent and distribution.
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 ten (10) shares (or any 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 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) Notice in writing signed by the Optionee or the
other person then entitled to exercise the Option or portion, stating
that the Option or portion is thereby
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exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) 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, or (B) shares of
the Company's Common Stock issuable to the Optionee upon
exercise of the option, with a fair market value (as
determined under the Plan) on the date of option exercise
equal to the aggregate purchase price of the shares with
respect to which such option or portion is exercised; or
(iii) With the consent of the Committee, any
combination of the consideration provided in the foregoing
subparagraphs (i) and (ii); 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 his 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 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, or (ii) shares of the Company's Common Stock issuable to the
Optionee upon exercise of the option, valued at fair market value (as
determined under the Plan) as of the date of the Option exercise, may
be used to make all or part of such payment; and
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(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.
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 payment to the Company (or other employer
corporation) of all amounts which, under federal, state or local tax
law, it 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 - CERTIFICATES
Shares of Common Stock purchased upon the exercise of the
Option may be evidenced in such manner as the Committee shall determine. If
certificates representing such shares of Common Stock are registered in the
name of the Optionee, then such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
shares of Common Stock, and the Company shall retain physical possession of
the certificate.
SECTION 4.6 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder 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 the Stock Option Agreement and these Terms and Conditions and to adopt
such rules for the administration, interpretation and application of the Plan
as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or the Option. Absent any explicit
provision otherwise, in the event of a conflict, the terms of the
Securityholders Agreement, as amended from time to time, shall govern over
the terms of the Plan, the Stock Option Agreement and these Terms and
Conditions, and the Plan shall govern over the Stock Option Agreement and
these Terms and Conditions.
SECTION 5.2 - OPTION NOT TRANSFERABLE
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; provided,
however, that this Section 5.2 shall not prevent any transfer by will or the
applicable laws of descent and distribution and, in the case the Option is
not designated as an "incentive stock option", this Section 5.2 shall not, to
the extent permitted by Section 25102(o) of the
California Corporation Code
and Section 260.140.41 of Title 10 of the
California Code of Regulations (or
other applicable law), prevent transfers by instrument to an inter vivos or
testamentary trust in which the Option is to be passed to beneficiaries upon
the death of the trustor (settlor), or by gift to "immediate family" as that
term is defined in 17 C.F.R. 240.16a-1(e).
SECTION 5.3 - RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS
(a) The share certificate or certificates evidencing the
shares of Common Stock purchased hereunder shall be endorsed with the
following legends (or legends substantially equivalent thereto, to the extent
applicable, together with any other legends that may be required by state or
federal securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY JURISDICTION. SUCH SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, ENCUMBERED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
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TO (I) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT
IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAW, OR
(II) ANY EXEMPTION FROM REGISTRATION UNDER SUCH ACT, OR APPLICABLE
STATE SECURITIES LAW, RELATING TO THE DISPOSITION OF SECURITIES,
INCLUDING RULE 144, PROVIDED AN OPINION OF COUNSEL IS FURNISHED TO
THE COMPANY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE SECURITIES LAW IS
AVAILABLE.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF A
SECURITYHOLDERS AGREEMENT DATED AS OF OCTOBER 2, 2000, AS SUCH MAY BE
AMENDED FROM TIME TO TIME (THE "SECURITYHOLDERS AGREEMENT"), A COPY OF
WHICH IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE
COMPANY. NO TRANSFER OF THE SECURITIES WILL BE MADE ON THE BOOKS OF THE
COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF
SUCH SECURITYHOLDERS AGREEMENT. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE ALSO SUBJECT TO OTHER RIGHTS AND OBLIGATIONS AS SET
FORTH IN THE SECURITYHOLDERS AGREEMENT.
(b) The Optionee agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
"stop transfer" instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
(c) The Company shall not be required: (i) to transfer on
its books any shares of Common Stock that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement, or (ii)
to treat as owner of such shares of Common Stock or to accord the right to
vote or pay dividends to any purchaser or other transferee to whom such
shares shall have been so transferred.
SECTION 5.4 - 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 the Stock Option Agreement and
these Terms and Conditions.
SECTION 5.5 - NOTICES
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Any notice to be given under the terms of the Stock Option
Agreement and these Terms and Conditions 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 him at the address given beneath his signature
hereto. By a notice given pursuant to this Section 5.6, either party may
hereafter designate a different address for notices to be given to him. 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 5.6. Any notice shall be deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
SECTION 5.6 - TITLES
Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Stock Option
Agreement and these Terms and Conditions.
SECTION 5.7 - CONSTRUCTION
The Stock Option Agreement and these Terms and Conditions
shall be administered, interpreted and enforced under the laws of the State
of
California.
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, and state securities laws and
regulations. Notwithstanding anything herein to the contrary, the Plan shall
be administered, and the Option 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 the Stock Option Agreement and these Terms and
Conditions shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
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