BUYERS UNITED, INC.
Option for the Purchase of ________________
Shares of Common Stock
Par Value $0.0001
STOCK OPTION AGREEMENT
THE HOLDER OF THIS OPTION, BY ACCEPTANCE HEREOF, BOTH WITH RESPECT TO THE
OPTION AND COMMON STOCK ISSUABLE UPON CONVERSION OF THE OPTION, AGREES AND
ACKNOWLEDGES THAT THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR OTHER COMPLIANCE UNDER THE ACT OR THE LAWS OF THE
APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND SUCH STATE STATUTES.
This is to certify that, for value received,
_______________________________ (the "Optionee") is entitled to purchase from
BUYERS UNITED, INC. (the "Company"), on the terms and conditions hereinafter
set forth, all or any part of ___________________________ shares of the
Company's common stock, par value $0.0001 (the "Common Stock"), at the purchase
price of $________ per share. By acceptance of this option agreement, the
Optionee agrees to be bound by the terms and conditions hereof.
Upon exercise of this option in whole or in part, a certificate for the
Common Stock so purchased shall be issued and delivered to the Optionee, upon
presentation and surrender to the Company of the duly executed form of purchase
attached hereto accompanied by payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check payable to the
order of the Company. If less than the total option is exercised, a new option
of similar tenor shall be issued for the unexercised portion of the option. As
soon as practicable after any proper exercise of an option, the Company shall
deliver to the Optionee at the main office of the Company, or such other place
as shall be mutually acceptable, a certificate or certificates representing the
shares of Common Stock as to which the option has been exercised. The time of
issuance and delivery of the Common Stock may be postponed by the Company for
such period as may comply with any applicable listing requirements of any
national or regional securities exchange and any law or regulation applicable
to the issuance and delivery of such shares.
This option is granted subject to the following further terms and
conditions:
1. This option shall vest __________________________________, and may be
exercised, in whole or in part, at any time on or before 5:00 p.m., Salt Lake
City time on ________________________.
(a) In the event of any of the following transactions to which the
Company is a party (a "Corporate Transaction"):
(1) Any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
(other than the Company, a majority-owned subsidiary of the Company, an
affiliate of the Company within the meaning of the Exchange Act, or a
Company employee benefit plan, including any trustee of such plan acting as
trustee), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company (or a successor to the Company) representing 50% or more of the
combined voting power of the then outstanding securities of the Company or
such successor;
(2) At any time that the Company has shares registered under the
Exchange Act at least 50% of the directors of the Company constitute persons
who were not at the time of their first election to the board of directors
of the Company, candidates proposed by a majority of such board of directors
in office prior to the time of such first election; or
(3) (A) the dissolution of the Company or liquidation of more
than 50% in value of the Company or a sale of assets involving 50% or more
in value of the assets of the Company, (B) any merger or reorganization of
the Company whether or not another entity is the survivor, pursuant to which
the holders, as a group, of all of the shares of the Company outstanding
prior to the transaction hold, as a group, less than 50% of the combined
voting power of the Company or any successor company outstanding after the
transaction, (C) a transaction or related set of transactions (including
without limitation a merger or tender offer together with a related purchase
of shares by the tender offeror in the market) pursuant to which the
holders, as a group, of all of the shares of the Company outstanding prior
to the transaction hold, as a group, less than 50% of the combined voting
power of the Company or any successor company outstanding after the
transaction, or (D) any other event which the Company determines, in its
discretion, would materially alter the structure of the Company or its
ownership.
then this option, to the extent outstanding at such time but not otherwise
exercisable, shall automatically accelerate so that such option shall, three
days immediately prior to the specified effective date for the Corporate
Transaction, become fully exercisable for all the Option Shares at the time
subject to such option and may be exercised for all or any portion of such
shares. No such acceleration of this option, however, shall occur if and to
the extent: (x) this option is, in connection with the Corporate Transaction,
either to be assumed by the successor corporation or parent thereof or replaced
with a comparable option (y) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the option
spread existing at the time of the Corporate Transaction (the excess of the
Fair Market Value of the Option Shares at the time subject to this option over
the aggregate Exercise Price payable for such shares) and provides for
subsequent pay-out in accordance with the same vesting schedule in effect for
the option pursuant to the option exercise schedule set forth herein. The
determination of option comparability under clause (x) shall be made by the
Company, and such determination shall be final, binding and conclusive. For
purposes of this option agreement, the Fair Market Value per share of Common
Stock on any relevant date shall be determined in accordance with the following
provisions:
(i) If the principal market for the Common Stock is a national
securities exchange or the Nasdaq stock market, then the "Fair Market Value"
as of that date shall be the mean between the lowest and highest sale price
of the stock on that date on the principal exchange on which the stock is
then listed or admitted for trading.
(ii) If sale prices are not available or if the principal market
for the Common Stock is not a national securities exchange and the stock is
not quoted on the Nasdaq stock market, then the "Fair Market Value" as of
that date shall be the average between the highest bid and lowest asked
prices for the Common Stock reported on the Nasdaq OTC Bulletin Board or by
the National Quotation Bureau or a comparable service.
(iii) If the day is not a business day, and as a result,
subparagraphs (i) and (ii) next above are inapplicable, then the "Fair
Market Value" shall be determined as of the last preceding business day. If
subparagraphs (i) and (ii) next above are otherwise inapplicable, then the
"Fair Market Value" of the Common Stock as of that date shall be determined
in good faith by the Committee.
(b) This option, to the extent not previously exercised, shall terminate
at 5:00 p.m., Salt Lake City time on the effective date of the Corporate
Transaction and cease to remain outstanding unless it is expressly assumed by
the successor corporation or parent thereof as provided herein.
(c) This option agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
2. The Optionee acknowledges that the shares subject to this option have
not and will not be registered as of the date of exercise of this option under
the Act or the securities laws of any state. The Optionee acknowledges that
this option and the shares issuable on exercise of the option, when and if
issued, are and will be "restricted securities" as defined in Rule 144
promulgated by the Securities and Exchange Commission and must be held
indefinitely unless subsequently registered under the Act and any other
applicable state registration requirements. The Company is under no obligation
to register the securities under the Act or under applicable state statutes.
In the absence of such a registration or an available exemption from
registration, sale of the shares may be practicably impossible. The Optionee
shall confirm to the Company the representations set forth above in connection
with the exercise of all or any portion of this option.
3. The Company, during the term of this Agreement, will use its best
efforts to seek to obtain from the appropriate regulatory agencies any
requisite authorization in order to issue and sell such number of shares of its
Common Stock as shall be sufficient to satisfy the requirements of the
Agreement. The inability of the Company to obtain from any such regulatory
agency having jurisdiction thereof the authorization deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any share of its
stock hereunder shall relieve the Company of any liability in respect of the
non-issuance or sale of such stock as to which such requisite authorization
shall not have been obtained. In the event that such stock cannot be issued,
the Company will renegotiate this option agreement with the Optionee.
4. The number of shares of Common Stock purchasable upon the exercise of
this option and the purchase price per share shall be subject to adjustment
from time to time subject to the following terms. If the outstanding shares of
Common Stock of the Company are increased, decreased, changed into or exchanged
for a different number or kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse
stock split, the Company or its successors and assigns shall make an
appropriate and proportionate adjustment in the number or kind of shares, and
the per-share option price thereof, which may be issued to the Optionee under
this option agreement upon exercise of the options granted hereunder. The
purchase rights represented by this option shall not be exercisable with
respect to a fraction of a share of Common Stock. Any fractional shares of
Common Stock arising from the dilution or other adjustment in the number of
shares subject to this option shall be eliminated from this option, and the
Optionee shall have no purchase rights with respect to said fractional shares.
5. The Company covenants and agrees that all shares which may be
delivered upon the exercise of this option will, upon delivery, be free from
all taxes, liens, and charges with respect to the purchase thereof, except for
income taxes. As a condition to the obligation of the Company to issue any
Common Stock to the Optionee on exercise of this option, Optionee shall make
appropriate arrangements with the Company or any subsidiary employing Optionee
for the satisfaction of all Federal, state or local income and employment tax
withholding requirements applicable to the exercise of this option.
6. The Company agrees at all times to reserve or hold available a
sufficient number of shares of Common Stock to cover the number of shares
issuable upon the exercise of this and all other options of like tenor then
outstanding.
7. This option shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Company, or to any other rights
whatsoever, except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this option or the interest represented hereby
or the shares purchasable hereunder until or unless, and except to the extent
that, this option shall be exercised. Furthermore, notwithstanding the
exercise of the option, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to optioned shares until the
Company issues the stock certificate. No adjustment will be made for a
dividend or other rights for which the record date is prior to the date the
stock certificate is issued.
8. The holder of this option, by acceptance hereof, acknowledges and
agrees that this option is not transferable by the Optionee except by will or
the laws of descent or distribution. The Company may deem and treat the
registered owner of this option as the absolute owner hereof for all purposes
and shall not be affected by any notice to the contrary.
9. In the event that any provision of this option agreement is found to
be invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other provisions shall
be given full force and effect to the same extent as though the invalid or
unenforceable provision were not contained herein.
10. This option agreement shall be governed by and construed in
accordance with the internal laws of the state of Delaware, without regard to
the principles of conflicts of law thereof.
11. Except as otherwise provided herein, this option agreement shall be
binding on and inure to the benefit of the Company and the person to whom an
Option is granted hereunder, and such person's heirs, executors,
administrators, legatees, personal representatives, assignees, and transferees.
IN WITNESS WHEREOF, the Company has caused this option to be executed by
the signature of its duly authorized officer, effective this _____ day of
_______________________________, __________.
BUYERS UNITED, INC.
By____________________________________
Duly Authorized Officer
FORM OF PURCHASE
(to be signed only upon exercise of Option)
TO: BUYERS UNITED, INC.
The Optionee, holder of the attached option, hereby irrevocably elects to
exercise the purchase rights represented by the option for, and to purchase
thereunder, ________________________________ shares of common stock of
XxxxxxXxxxxx.xxx, Inc., and herewith makes payment therefor, and requests that
the certificate(s) for such shares be delivered to the Optionee at:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
The Optionee represents that the common stock is being acquired without a
view to, or for, resale in connection with any distribution thereof without
registration or other compliance under the Securities Act of 1933, as amended
(the "Act"), and applicable state statutes, and that the Optionee has no direct
or indirect participation in any such undertaking or in the underwriting of
such an undertaking. The Optionee understands that the common stock has not
been registered, but is being acquired by reason of a specific exemption under
the Act as well as under certain state statutes for transactions by an issuer
not involving any public offering and that any disposition of the common stock
may, under certain circumstances, be inconsistent with these exemptions. The
Optionee acknowledges that the common stock must be held and may not be sold,
transferred, or otherwise disposed of for value unless subsequently registered
under the Act or an exemption from such registration is available. The Company
is under no obligation to register the common stock under the Act. The
certificates representing the common stock will bear a legend restricting
transfer, except in compliance with applicable federal and state securities
statutes.
The Optionee agrees and acknowledges that this purported exercise of the
option is conditioned on, and subject to, any compliance with requirements of
applicable federal and state securities laws deemed necessary by the Company.
DATED this ________ day of ________________________________, __________.
_______________________________________
Signature
