BIG DOG HOLDINGS, INC.
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement") is entered into as of March
6, 1996 between BIG DOG HOLDINGS, INC., a Delaware corporation (the "Company"),
and Xxxx Xxxxx ("Option Holder").
WHEREAS in consideration of the Option Holder's past and future services as
Chairman of the Board of Directors of the Company, the Board of Directors has
authorized the grant to Option Holder of a stock option on the terms and
conditions described herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein, it is hereby agreed:
1. GRANT OF OPTION
Effective as of the date of this Agreement the Company hereby grants to
Option Holder an option (the "Option") to purchase, subject to the terms of this
Agreement, all or part of 35,000 shares of Common Stock at the price of $2.59
per share. The number of shares subject to the Option and the price per share
thereof are subject to adjustment under certain circumstances, as provided in
Section 6.
2. TERM OF OPTION
The Option shall be immediately exercisable and shall expire on the date
five years from the date hereof.
3. MANNER OF EXERCISE
The Option may be exercised by written notice delivered to the Company
stating the number of shares with respect to which the Option is being
exercised, together with any written statement provided for in Section 7 hereof,
if applicable, together with such additional information or forms as the Company
may require, and the purchase price of such shares in the form of either cash or
check.
4. ASSIGNMENT OR TRANSFER
The Option may be assigned or transferred by Option Holder, provided that
the Compliance Conditions (as defined in Section 7 below) shall be met as to
such assignment.
5. NO RIGHTS AS SHAREHOLDER
Option Holder shall have no rights as a shareholder with respect to shares
of the Common Stock covered by this Option until the date of the issuance of
such shares. No adjustment will be made for dividends or other rights for which
the record date is prior to the date such stock is issued, except as is
expressly provided in Section 6.
6. ADJUSTMENT.
Subject to the provisions of the next sentence of this Section 6, if the
outstanding shares of Common Stock are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the Company
as the result of any one or more reorganizations, recapitalizations,
reclassifications, stock dividends, stock splits, reverse stock splits and the
like, upon proper authorization of the Board an appropriate and proportionate
adjustment shall be made in the number and/or type of shares or other securities
subject to the Option, and the price for each share or other unit of any
security, but only to the extent this option, but only to the extent this Option
then remains unexercised.
7. SECURITIES ACT OF 1933
(a) Subject to the provision of subsection (b) hereof, no shares of Common
Stock shall be issued or transferred pursuant to this Agreement until (i) a
registration statement under the Securities Act of 1933 relating to the stock
issuable upon exercise of the Option has been declared effective and there is
available for delivery a prospectus meeting the requirements of Section 10 of
said Act, and (ii) the Company shall have complied, in the opinion of counsel to
the Company, with all other legal requirements that may be applicable to the
issuance of shares upon exercise of the Option. Such conditions are hereinafter
collectively referred to as the "Compliance Conditions."
(b) It is the Company's intention that the Compliance Conditions be met at
all times. However, should compliance not be secured only with subsection (a)
(i) above, then notwithstanding the foregoing, Option Holder may exercise all or
any portion of the Option at a time when such condition is not met, if, and only
if, Option Holder (i) submits to the Company a request to exercise the Option
and acknowledges in such request that Option Holder will acquire such shares
upon such exercise not with a view to their resale or distribution, and (ii)
upon each such exercise of the Option, Option Holder will furnish to the Company
a written statement to such effect in a form satisfactory to the Committee and
counsel to the Company. In addition, the Option Holder shall, if requested by
the Board or the Committee, give assurances satisfactory to counsel to the
Company with respect to such matters as the Board or the Committee may deem
desirable to assure compliance with subsection (a) (ii) above. Furthermore, any
person or persons entitled to exercise such Option under the provisions of
Section 4 hereof shall, upon such exercise of the Option under such
circumstances, furnish similar requests, statements or documents to the Company.
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(c) Inability of the Company to secure compliance with the Compliance
Conditions shall relieve the Company from any liability for failure to issue
stock to satisfy the Option for such period of time if an effective registration
statement or appropriate prospectus has not been secured or compliance with the
other Compliance Conditions has not been effected, unless stock is issued
pursuant to request of the Option Holder under subsection (b) above. Further,
failure of the Company to secure compliance with the compliance conditions
stated in subsection (a) (i) above shall extend the expiration date of such
Option as provided in Section 2 of this Agreement for such period of time as an
effective registration statement or appropriate prospectus has not been secured
or such compliance has not been effected.
8. WITHHOLDING
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which the Company determines it is required to withhold
in connection with this Agreement and the transactions contemplated hereby.
9. AMENDMENT
This Agreement maynot be amended other than by a written amendment executed
by both parties.
10. APPLICABLE LAW
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BIG DOG HOLDINGS, INC.
By: Xxxxxxx X. Xxxx
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Its: Executive Vice President
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OPTION HOLDER
XXXX XXXXX
Xxxx Xxxxx
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