EXHIBIT 4.5
Damark International, Inc. 1995 Stock Option
with Xxxxx Xxxxxxxx (1995 Nonqualified Stock Option Plan)
DAMARK INTERNATIONAL, INC.
STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT made this 10th day of May, 1995, by and between
DAMARK INTERNATIONAL, INC., a Minnesota corporation (the "Company"), and Xxxxx
Xxxxxxxx (the "Optionee");
W I T N E S S E T H:
WHEREAS, the Optionee has consented to serving as a director on the
Company's Board of Directors; and
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase shares of its Class A common stock, par value $.01, (the "Common
Stock"),
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the right
and option (hereinafter called the "Option") to purchase all or any part of an
aggregate of thirty thousand (30,000) shares of Common Stock (the "Option
Shares") (such number being subject to adjustment as provided in Paragraph 4
hereof) on the terms and conditions herein set forth.
2. PURCHASE PRICE. Subject to the provisions of Paragraph 4 hereof, the
purchase price for the Option Shares shall be $6.625 per share, which has been
determined to be the fair market value of the Option Shares at the date of grant
of the Option.
3. TERM AND VESTING OF OPTION. The Option shall expire (the "Expiration
Date") upon the earlier to occur of: (a) the close of business on the tenth
anniversary of the date hereof or (b) one (1) year after the date on which the
Optionee is no longer a director of the Company. Prior to the Expiration Date,
the Optionee shall be entitled to exercise the Option as to all or any part of
the Option Shares for which the Option may be exercised at any time after (i)
the first anniversary of the date hereof for one-third of the total number of
Option Shares if the Optionee is then a director of the Company, (ii) the second
anniversary of the date hereof for one-third of the total number of Option
Shares if the Optionee is then a director of the Company, and (iii) the third
anniversary of the date hereof for one-third of the total number of Option
Shares if the Optionee is then a director of the Company; provided, however, in
the event of the sale of all or substantially all of the assets of the Company
or a merger, consolidation or other reorganization of the Company in which the
shareholders of the Company immediately prior to such merger, consolidation or
reorganization constitute less than eighty percent (80%) of the voting power of
the surviving corporation, all of the Option Shares shall be exercisable upon
the occurrence of such event.
1
Notwithstanding the foregoing, the Option may in no event be exercised by
anyone to any extent in the event of a voluntary dissolution, liquidation or
winding up of the affairs of the Company, after the close of business on the
later of (i) the date of the twentieth day after the mailing of written notice
of such dissolution, liquidation or winding up, and (ii) the record date for
determination of holders of Common Stock entitled to participate therein.
4. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. If all or any portion
of this Option shall be exercised subsequent to any share dividend,
recapitalization, merger, consolidation, exchange of shares or reorganization as
a result of which shares of any class shall be issued in respect to outstanding
Common Stock, or if Common Stock shall be changed into the same or a different
number of shares of the same or another class or classes, the person so
exercising this Option shall receive, for the aggregate price paid upon such
exercise, the aggregate number and class of shares to which they would have been
entitled if Common Stock (as authorized at the date hereof) had been purchased
at the date hereof for the same aggregate price (on the basis of the price per
share set forth in Paragraph 2 hereof) and had not been disposed of. No
fractional share shall be issued upon any such exercise and the aggregate price
paid shall be appropriately reduced on account of any fractional share not
issued.
5. METHOD EXERCISE. Subject to the terms and conditions of this
Agreement, the Option may be exercised by written notice to the Company at its
principal office and place of business in the State of Minnesota. Such notice
shall state the election to exercise the Option and the number of Option Shares
in respect of which it is being exercised, and shall be signed by the person so
exercising the Option. Such notice shall be accompanied by the payment of the
full purchase price of such Option Shares and the delivery of such payment to
the Treasurer of the Company. The certificate for the Option Shares as to which
the Option shall have been so exercised shall be registered in the name of the
person exercising the Option. If the Optionee shall so request in the notice
exercising the Option, the certificate shall be registered in the name of the
Optionee and another person jointly with right of survivorship, and shall be
delivered as provided above to or upon the written order of the person
exercising the Option. In the event the Option shall be exercised by any person
other than Optionee, such notice shall be accompanied by appropriate proof of
the right of such person to exercise the Option.
6. RESERVATION OF SHARES. The Company shall, at all times during the
term of the Option, reserve and keep available such number of shares of its
capital stock as will be sufficient to satisfy the requirements of this
Agreement, and shall pay all original issue and transfer taxes with respect to
the issue and transfer of Option Shares pursuant hereto, and all other fees and
expenses necessarily incurred by the Company in connection therewith.
2
7. NO RIGHTS AS STOCKHOLDER. The holder of the Option shall not have any
of the rights of a stockholder with respect to the Option Shares covered by the
Option except to the extent that one or more certificates for shares shall be
delivered to him upon the due exercise of the Option.
8. NO REGISTRATION REQUIREMENTS AND INVESTMENT PURPOSE. The Company
shall not be deemed by reason of issuance of any shares under the Option to have
any obligation to register such shares under the Securities Act of 1933, as
amended, or maintain in effect any registration of such Option Shares. In
addition, unless the Option Shares have been so registered, the Option is
granted on the condition that the acquisition of shares hereunder shall be for
investment purposes only and the person acquiring Option Shares upon exercise of
the Option must bear the economic risk of the investment for an indefinite
period of time since the shares so acquired cannot be sold unless they are
subsequently registered or an exemption from such registration is available.
Optionee agrees that a legend may be placed on the stock certificates
acknowledging the restrictions on subsequent distribution of the shares issued
upon exercise of this Option.
9. MISCELLANEOUS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, successors, assigns and
representatives and shall be governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
DAMARK INTERNATIONAL, INC.
By _________________________________
Xxxx X. Xxxx, Chairman, President
and Chief Executive Officer
_________________________________
Xxxxx Xxxxxxxx
3
