EXHIBIT 10.20
STOCK OPTION AGREEMENT
This Agreement made as of this 6th day of December, 1996, by and between
IRATA, INC., a Texas corporation (the "Company"), and XXXX X. XXXXXXX (the
"Optionee").
W I T N E S S E T H:
WHEREAS, the Optionee is a valued director of the Company, having
substantial responsibility for its future growth; and
WHEREAS, the Board of Directors of the Company considers it advisable
and in the best interest of the Company to provide the Optionee with additional
incentive by providing the Optionee with a proprietary interest in the success
of the Company; and
WHEREAS, in order to provide the Optionee with a proprietary interest in
the Company, the Board has granted the Optionee an option to purchase Class A
Common Stock, $.10 par value ("Class A Stock"), of the Company.
NOW, THEREFORE, in order to set forth the terms and conditions of such
option, the Company and the Optionee hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the
option to purchase 25,000 shares of Class A Stock at a price of $.50
per share, such purchase to be upon the terms and conditions
hereinafter set forth. The Option granted hereunder is granted under
the 1996 Stock Option Plan of the Company (the "Plan") and is
designated a "Non-Qualified Option" under the Plan.
2. Amount and Dates Exercisable. The Optionee shall become immediately
vested with respect to 12,500 shares which shall become exercisable
on August 1, 1997. The remainder of the option shall become
exercisable with respect to an additional 6,250 shares on November
1, 1998; and the final additional 6,250 shares shall become
exercisable on November 1, 1999. All of such options shall
thereafter be fully exercisable until November 3, 2002, when the
option shall expire.
3. Exercise of Option. The option granted hereunder shall be exercised
in accordance with Section 6 of the Plan by delivering to the
Company a written notification specifying the number of shares of
Class A Stock which the Optionee desires to purchase, together with
payment of the exercise price either by check, cash, certified
check, bank draft, postal or express money order to the order of the
Company, by delivery to the Company for cancellation of a portion of
this option that is then exercisable valued at "Fair Market Value",
or by delivery to the Company of other shares of Class A Stock
valued at "Fair Market Value" or by any combination of such methods.
For purposes hereof the "Fair Market Value" of a portion of this
option or shares of Class A Common Stock shall be determined in good
faith by the Board of Directors of the Company. As promptly as
practical after receipt of such written notification and payment,
the Company shall deliver to the Optionee a certificate for the
number of shares with respect to which the option has been exercised
in accordance with Section 6 of the Plan.
4. Transferability of Option. Except as hereinafter set forth, this
option shall not be transferable by the Optionee otherwise than by
will or under the laws of descent and distribution, and shall be
exercisable, during Optionee's lifetime, only by Optionee.
5. Termination of Service of Optionee. In the event that the Optionee
ceases to be a director of the Company by reason other than death
before the expiration date of this option ("Expiration Date"), this
option shall terminate and the Optionee shall have the right, prior
to three months after the date of termination and prior to the
Expiration Date, to exercise any vested or exercisable portion of
this option. In the event of death, Optionee's executors,
administrators or any person or persons to whom this option may be
transferred by will or by the laws of descent and distribution,
shall have the right, prior to twelve months after the date of death
and prior to the Expiration Date, to exercise this option in whole
or in part to the extent to which the Optionee was entitled to
exercise this option immediately prior to the death of Optionee.
6. Requirements of Law. The Company shall not be required to sell or
issue any shares under this option if the issuance of such shares
shall constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority.
Specifically in connection with the Securities Act of 1933 (as now in
effect or hereunder amended) (the "'33 Act"), upon exercise of this option,
unless a registration statement under the '33 Act is in effect with respect to
the shares of Class A Stock covered hereby, the Company shall not be required to
issue such shares unless the Company has received evidence satisfactory to it to
the effect that the issuance of shares is exempt from the registration
provisions of the '33 Act, the Optionee is acquiring such shares for investment
and not with a view to distribution thereof, and unless the certificate issued
representing the share of Class A Stock bears a legend in substantially the
following form:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws
of any State and may not be sold or transferred except upon such
registration or upon receipt by the corporation of an opinion of counsel
for the Corporation that registration is not required for such sale or
transfer."
Any determination in this connection by the Company shall be final, binding and
conclusive. At such time as a registration statement under the '33 Act is in
effect with respect to the shares of Class A Stock represented by certificates
bearing the above legend or at such time as, in the opinion of counsel for the
Company, such legend is no longer required solely for compliance with applicable
securities laws, then the holders of such certificates shall be entitled to
exchange such certificates for certificates representing a like number of shares
but without such legend. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the '33 Act.
Specifically in connection with The Securities Act of the State of Texas
(as now in effect or hereafter amended) (the "Texas Act"), upon exercise of this
option, unless a registration statement under the Texas Act is in effect with
respect to the shares of Class A Stock covered hereby, the
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Company shall not be required to issue such shares unless, in the opinion of
counsel for the Company, the issuance of such shares is exempt from the
provisions of the Texas Act. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the Texas Act.
The Company shall not be obligated to take any other affirmative action
in order to cause the exercise of this option or the issuance of shares pursuant
hereto to comply with any law or regulation of any governmental authority.
7. No Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to shares covered by this option until the
date of issuance of a stock certificate for such shares; no
adjustment for dividends, or otherwise, shall be made if the record
date therefor is prior to the date of issuance of such certificate.
8. Changes in the Company's Capital Structure.
(i) The existence of this Option shall not affect in any way the
right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations,
reorganizations, or other changes in the Company's capital
structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock
or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(ii) If, while this Option is outstanding, the Company shall effect
a subdivision or consolidation of shares or other increase or
reduction of the number of shares of the Common Stock
outstanding without receiving compensation therefor in money,
services or property, then (a) in the event of an increase in
the number of such shares outstanding, the number of shares of
Common Stock then subject to this Option shall be
proportionately increased; and (b) in the event of a decrease
in the number of such shares outstanding the number of shares
then available under this Option shall be proportionately
decreased.
(iii)After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one or more
corporations in which the Company shall be the surviving
corporation, the holder of this Option shall, at no additional
cost, be entitled upon exercise of this Option to receive
(subject to any required action by stockholders) in lieu of the
number of shares as to which this Option shall then be so
exercisable, the number and class of shares of stock or other
securities to which such holder would have been entitled to
receive pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a
number of shares of the Company equal to the number of shares
as to which this Option had been exercisable.
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(iv) If the Company is merged into or consolidated with another
corporation or other entity under circumstances where the
Company is not the surviving corporation, or if the Company
sells or otherwise disposes of substantially all of its assets
to another corporation or other entity while this Option
remains outstanding, then the Plan Administrator (as defined in
the Plan) may direct that any of the following shall occur:
(a) If the successor entity is willing to assume the
obligation to deliver shares of stock or other securities
after the effective date of the merger, consolidation or
sale of assets, as the case may be, the holder of this
Option shall be entitled to receive, upon the exercise of
this Option and payment of the option price, in lieu of
shares of Common Stock, such shares of stock or other
securities as the holder of this Option would have been
entitled to receive had this Option been exercised
immediately prior to the consummation of such merger,
consolidation or sale.
(b) The Plan Administrator may waive any limitations set forth
in or imposed pursuant to the Plan or this Option
Agreement with respect to this Option such that this
Option shall become exercisable prior to the record or
effective date of such merger, consolidation, or sale of
assets.
(c) The Plan Administrator may cancel this Option as of the
effective date of any such merger, consolidation, or sale
of assets provided that prior notice of such cancellation
shall be given to the holder of this Option at least 30
days prior to the effective date of such merger,
consolidation, or sale of assets, and the holder of this
Option shall have the right to exercise this Option in
full during a period of not less than 30 days prior to the
effective date of such merger, consolidation, or sale of
assets.
(v) Except as provided in the Plan, the issuance by the Company of
Common Stock or any other shares of capital stock or securities
convertible into shares of capital stock, for cash property,
labor done, or other consideration, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to this
Option.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on this ___ day of _____________, 19__, but as of the day and year
first above written.
IRATA, INC.
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By:_________________________________
Authorized Officer
By:_________________________________
XXXX X. XXXXXXX, Optionee
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