EXHIBIT 10.18
DAKOTAH, INCORPORATED
NONSTATUTORY OPTION AGREEMENT
UNDER THE 1995 STOCK OPTION PLAN
Between:
DAKOTAH, INCORPORATED (the "Company") and XXXXXXX XXXXXXXXX (the "Optionee"),
dated April 8, 1997.
The Company hereby grants to the Optionee an option (the "Option")
under the Dakotah, Incorporated 1995 Stock Option Plan (the "Plan") to purchase
One Hundred Thousand (100,000) Shares (the "Shares") of the Company's common
stock under the terms and conditions set forth below. The terms and conditions
applicable to the Option are as follows:
1. Nonstatutory Option. The Option shall be a nonstatutory Option and
is not intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code.
2. Purchase Price - The purchase price of the stock shall be $2.6875
per share ("Option Price") which is the Fair Market Value of the Stock on the
date of this Agreement.
3. Period of Exercise - The Option shall expire on the seventh
anniversary date of its grant (the "Expiration Date") unless otherwise
terminated as provided herein.
Except as otherwise provided herein, the Option will vest as
follows:
(a) On and after the effective date of this Agreement, the
Option may be exercised for not in excess of twenty percent (20%) of
the shares originally subject to the Option;
(b) On or after January 1, 1998, the Option may be exercised
for not in excess of forty percent (40%) of the shares originally
subject to the Option;
(c) On or after January 1, 1999, the Option may be exercised
for not in excess of sixty percent (60%) of the shares originally
subject to the Option;
(d) On or after January 1, 2000, the Option may be exercised
for not in excess of eighty percent (80%) of the shares originally
subject to the Option;
(e) On and after January 1, 2001, the Option may be exercised
at any time and from time to time within its terms in whole or in part,
but it shall not be exercisable after the seventh anniversary of the
date hereof.
Notwithstanding the foregoing, the Option may be exercised in whole or
in part in the event that the Optionee is disabled or dies, or if the Optionee's
employment is terminated by the Company for any reason other than cause (as that
term is defined below).
4. Transferability - This Option is not transferable except by will or
the laws of descent and distribution and may be exercised during the lifetime of
the Optionee only by the Optionee.
5. Termination of Employment - Except as may be agreed between the
Committee and the Optionee, in the event that Optionee's employment is
terminated, the Option may be exercised within its terms in whole or in part by
the Optionee within three months after the date of termination; except that:
a. If the Optionee's employment is terminated because the
Optionee is disabled within the meaning of Code ss.422, the Optionee
has one year rather than three months to exercise the Option.
b. If the Optionee dies, the Option may be exercised by his or
her legal representative or by a person who acquired the right to
exercise the Option by bequest or inheritance or by reason of the death
of the Optionee, but the Option must be exercised within one year after
the date of the Optionee's death.
c. If the Optionee's employment is terminated for cause, the
Option terminates immediately, and the Optionee has no right to
exercise the Option. For purposes of this Agreement, the term "cause"
means (i) criminal activity or dishonesty of Optionee which is proven
or admitted, (ii) acts of disloyalty to the Company during Optionee's
employment with the Company, including without limitation, repeated
public or private disparagement of the Company, its products or
condition, the disclosure of any of the Company's trade secrets to
competitors, or the employment by Optionee by a business entity
directly competitive with the Company, or (iii) the failure of Optionee
to use his best efforts to perform the functions of his employment in a
professional manner consistent with executives in other businesses
performing similar functions; provided, however, that a bona fide
disability shall not result in a failure to "use best efforts."
d. Notwithstanding the foregoing, in no event (including
disability or death of the Optionee) may the Option be exercised after
the Expiration Date.
6. No Guarantee of Service - This Agreement shall in no way restrict
the right of the Company or the Company's Board of Directors to terminate
Optionee at any time.
7. Method of Exercise; Use of Company Stock - The Option may be
exercised, subject to the terms and conditions of this Agreement, by written
notice to the Company. The notice shall be in the form attached to this
Agreement and will be accompanied by payment (in such form as the Company may
specify) of the full purchase price of the shares to be issued. The Company will
issue and deliver certificates representing the number of shares purchased under
the Option, registered in the name of the Optionee as soon as practicable after
receipt of the notice.
When exercising this Option, Optionee may make payment either
in money or by tendering shares of the Company Stock owned by the Optionee, or
by a combination of the two; provided, however, that (a) shares of the Company
Stock may be utilized only if, at the time of exercise, the Stock of the Company
is publicly traded, either on a stock exchange or nationally or locally over the
counter, and (b) the right to pay in the form of the Company Stock can be
utilized only twice in any calendar year. Where shares of Stock of the Company
are employed to pay all or part of the exercise price, the shares of said Stock
shall be valued at their Fair Market Value at the time of payment.
8. Withholding; Taxable Income - In any case where withholding is
required or advisable under federal, state or local law in connection with any
exercise by an Optionee hereunder, the Company is authorized to withhold
appropriate amounts from amounts payable to Optionee, or may require Optionee to
remit to the Company an amount equal to such appropriate amounts.
9. Merger, Consolidation or Acceleration Event - The terms of this
Agreement are subject to modification upon the occurrence of certain events as
described in Article XIII of the Plan.
10. Incorporation of Plan - This Agreement is made pursuant to the
provisions of the Plan, which Plan is incorporated by reference herein. Terms
used herein shall have the meaning employed in the Plan, unless the context
clearly requires otherwise. In the event of a conflict between the provisions of
the Plan and the provisions of this Agreement, the provisions of the Plan shall
govern.
DAKOTAH, INCORPORATED
By
--------------------------------
Xxxx Xxxxx, Jr.
Chief Executive Officer
DAKOTAH, INCORPORATED
NOTICE OF EXERCISE OF STOCK OPTION ISSUED
UNDER THE 1995 STOCK OPTION PLAN
To: Stock Option Committee
DAKOTAH, INCORPORATED
I hereby exercise my Option dated to purchase shares of $.01 par value
common stock of the Company at the Option exercise price of $2.6875 per share.
Enclosed is a certified or cashier's check in the total amount of $ , or payment
in such other form as the Company has specified.
I request that my shares be issued to me as follows:
(Print your name in the form in which you wish to have the shares registered)
(Social Security Number)
(Street and Number)
(City) (State) (Zip Code)
Dated: ________________, 19___.
Signature:
