1
EXHIBIT A-3
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
STOCK OPTION AGREEMENT
Xxxxxx, Inc., a New Jersey corporation (the "Company") hereby grants to
Xxxxxx Xxxxxx (the "Optionee") the option (the "Option") to purchase ten
thousand (10,000) shares (the "Shares") of the Company's Common Stock, $.01 par
value (the "Common Stock") at the price determined as provided herein. The
Option may be exercised in whole or in part.
1. NATURE OF THE OPTION. This Option is not intended to qualify for any
special tax benefits to the Optionee and is not intended to qualify as
an incentive stock option under Section 422 of the Internal revenue
Code of 1986.
2. EXERCISE PRICE. The exercise price is Four and 02/100 Dollars ($4.02)
per share (the "Exercise Price").
3. METHOD OF EXERCISE. The Option shall not become exercisable until the
six month anniversary of the Date of Grant (as set forth below). The
Option shall thereafter be exercisable by written notice (a "Notice of
Exercise of Stock Option") in the form attached hereto as Exhibit A.
The Notice of Exercise of Stock Option shall be signed by Optionee and
shall be delivered in person or by certified mail to the President,
Secretary or Chief Financial Officer of the Company, or to such other
agent as the Company shall designate in writing to the Optionee, and
shall be accompanied by payment of the Exercise Price. The Option shall
be deemed to be exercised upon receipt by the Company of the executed
Notice of Exercise of Stock Option accompanied by payment of the
Exercise Price. Payment of the Exercise Price may be made by cash or
check.
The Shares will not be transferred pursuant to the exercise of the
Option unless such transfer and such exercise shall comply with all
relevant provisions of law, including federal and state securities
laws. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to the Optionee on the date on which
the Option is exercised.
4. REPRESENTATIONS; RESTRICTIONS ON TRANSFER.
(a) By receipt of the Option, by its execution and by its
exercise, the Optionee represents to the Company the
following:
2
(i) The Optionee understands that the Option and the
Shares purchased upon its exercise are securities,
the issuance of which requires compliance with
federal and state securities laws.
(ii) The Optionee is aware of the Company's business
affairs and has acquired sufficient information about
the Company to reach an informed and knowledgeable
decision to acquire the Company's securities. The
Optionee is acquiring the Company's securities for
investment for the Optionee's own account only and
not with a view to, or for resale in connection with,
any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities
Act").
(iii) The Optionee acknowledges and understands that the
Company's securities constitute "restricted
securities" under the Securities Act and must be held
indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such
registration is available. The Optionee further
acknowledges and understands that the Company is
under no obligation to register securities. The
Optionee further acknowledges and understands that
any certificate evidencing the issuance of the
Company's securities to the Optionee will be
imprinted with a legend which prohibits the transfer
of such securities unless they are registered or such
registration is not required in the opinion of
counsel satisfactory to the Company and they are
transferred in accordance with the provisions set
forth below, and with any other legend required under
applicable state securities laws.
(b) The Company has the requisite power and authority to execute
and deliver this Option Agreement (this "Agreement") and to
perform its obligations hereunder and to sell, assign,
transfer and convey the Shares to the Optionee upon the due
exercise of the Option.
5. NON-TRANSFERABILITY OF OPTION. The Option may not be transferred in any
manner other than by will or by the laws of descent or distribution and
may be exercised (i) during the lifetime of the Optionee by the
Optionee only and (ii) after the death of the Optionee, by those who
take under Optionee's will or by the laws of descent or distribution.
The terms of this Agreement shall be binding upon the executors,
administrators, heirs, successors and permitted assigns of the
Optionee.
6. TERM OF OPTION. The Option shall not terminate until the five (5) year
anniversary of the Date of Grant (as provided below), and may be
exercised during such term only in accordance with the terms of this
Agreement.
7. TAX CONSEQUENCES. The Optionee has reviewed with the Optionee's own tax
advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement. The Optionee is relying
solely on such advisors and not on any statements or representations of
the Company or any of its agents. The Optionee understands that the
2
3
Optionee (and not the Company) shall be responsible for any tax
liability of the Optionee that may arise as a result of the
transactions contemplated by this Agreement.
8. STOCK DIVIDENDS, RECLASSIFICATION AND RECAPITALIZATION. In case the
Company shall (i) pay a dividend or make a distribution on all of its
outstanding shares of Common Stock in shares of Common Stock, (ii)
subdivide, reclassify or recapitalize its outstanding Common Stock into
a greater number of shares or (iii) combine, reclassify or recapitalize
its outstanding Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such
dividend or distribution or on the effective date of such subdivision,
combination, reclassification or recapitalization shall be
proportionately adjusted (but in no event shall the aggregate Exercise
Price for all of the shares of Common Stock subject to this Option be
in excess of $40,200) and the Optionee, upon the exercise of this
option after such date, shall be entitled to receive the aggregate
number and kind of shares which, if this Option had been exercised
immediately prior to such time, he would have owned upon such exercise
and been entitled to receive upon such dividend, subdivision,
combination, reclassification or recapitalization. Such adjustment
shall be made successively whenever any event listed in this Section 8
shall occur.
9. PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC. In case of any
consolidation of the Company with or merger of the Company into another
corporation or in case of any sale or conveyance to another corporation
of the property of the Company as an entirety or substantially as an
entirety, the surviving corporation, if other than the Company,
resulting therefrom or the acquiring corporation, as the case may be,
shall assume by written agreement the obligation to deliver, upon
exercise of this Option and payment of the Exercise Price in effect
immediately prior to such corporate event, the kind and amount of
shares or other securities and property which the Optionee would have
owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had this Option been
exercised immediately prior thereto.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Shares on the exercise of this Option. If any fraction of a
Share would, except for the provisions of this Section 10, be issuable
on the exercise of this Option (or specified portion hereof), then the
Company shall elect, at its option to either (i) round such fractional
Share upwards to the nearest whole Share or (ii) pay to the holder an
amount in cash equal to such fraction multiplied by the then current
fair value of a Share, determined as follows:
(a) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such
exchange, the current fair value shall be the last reported
sale price of the Common Stock on such exchange on the last
business day prior to the date of exercise of this Option or
if no such sale is made on such day, the average of the
closing bid and asked prices for such day on such exchange; or
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current fair value shall be the mean
of the last reported bid and asked prices reported by the
Nasdaq Stock Market (or, if not so quoted on the Nasdaq Stock
3
4
Market, by the NASD Electronic Bulletin Board) on the last
business day prior to the day of the exercise of this Warrant;
or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so
reported, the current value shall be an amount determined in
such reasonable manner as may be prescribed by the Board of
Directors of the Company, such determination to be final and
binding on the Holder.
11. REGISTRATION. The Company agrees to register the Shares on Form S-8
under the Securities Act of 1933 within six (6) months from the Date of
Grant.
12. NOTICES. Any notice to be given to the Company shall be in writing and
addressed to the Company at its principal office at 0000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, and any notice to be given to the
Optionee shall be in writing and addressed to the Optionee at the
address set forth below the Optionee's signature hereto. Any party may
change its address for notice purposes by providing the other party
with written notice of such change pursuant to the provisions of this
Section 12. Any notice hereunder shall be deemed duly given to the
party to whom such notice is addressed when delivered personally, when
delivery is refused, when delivered by overnight courier service of
national reputation providing receipted delivery, or two (2) days after
being mailed by certified mail, return receipt requested.
13. RULES OF CONSTRUCTION; JURISDICTION. This Agreement shall be construed
and enforced in accordance with the laws of the State of New Jersey
other than any choice of law rules calling for the application of laws
of another jurisdiction. All disputes which may arise under this Option
Agreement which involve judicial adjudication shall be resolved in a
court of competent jurisdiction of the State of New Jersey or the
United State District Court of the State of New Jersey. Optionee agrees
to submit to the personal jurisdiction of the aforesaid courts and
consent to service of any papers, notices, or process necessary or
proper for any legal action in any manner permitted by the New Jersey
Court Rules.
DATE OF GRANT: May 10, 2001
Xxxxxx, Inc.
By:
--------------------------
Name:
Title:
4
5
THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE OPTION AND THE TRANSACTIONS
CONTEMPLATED HEREUNDER DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS AN EMPLOYEE OF THE COMPANY, FOR ANY PERIOD, OR AT ALL,
AND SHALL NOT INTERFERE WITH THE OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE THE OPTIONEE'S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE UNDER THE
TERMS OF THE EMPLOYMENT AGREEMENT BETWEEN OPTIONEE AND THE COMPANY EXISTING AS
OF THE DATE OF THIS STOCK OPTION AGREEMENT.
The Optionee represents that the Optionee is familiar with the terms
and provisions of this Agreement, and hereby accepts the Option subject to all
of the terms and provisions hereof. The Optionee has reviewed this Agreement in
its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.
The Optionee further agrees to notify the Company upon any change in the
residence address indicated below.
Dated: May 10, 2001
----------------------------------------
Xxxxxx Xxxxxx
Optionee Residence Address:
----------------------------------------
----------------------------------------
----------------------------------------
Optionee Social Security No.
------------
5
6
EXHIBIT A
NOTICE OF EXERCISE OF OPTION
TO:
FROM:
DATE:
RE: Exercise of Option
I hereby exercise my option to purchase ___ shares of Common Stock for
$______, effective as of the date of this notice. This notice is given in
accordance with the terms of my stock option agreement with the Company dated
May __, 2001 (the "Option Agreement"). Capitalized terms used but not defined
herein shall have the meaning ascribed to such terms in the Option Agreement.
The undersigned is exercising the Option by means of a cash payment,
and tenders herewith payment in full for the Shares being purchased, together
with all applicable transfer taxes, if any.
The undersigned confirms the representations and agreements made in
subsection (a) of Section 4 of the Option Agreement.
Sincerely,
--------------------------
(Signature)
--------------------------
(Print or Type Name)
Notice of cash payment received on , 20 .
---------- --
Xxxxxx, Inc.
By:
---------------------------------
Name:
Title:
6
