EXHIBIT 10.4
TOTAL RESEARCH CORPORATION
STOCK OPTION AGREEMENT
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STOCK OPTION AGREEMENT made as of July 1, 1998 (the "Grant Date"), between
TOTAL RESEARCH CORPORATION, a Delaware corporation (the "Company"), and Xxxxxx
Xxxxxxxx (the "Optionee").
WHEREAS, the Company, pursuant to Section 1.1 of the Amended and Restated
Stock Purchase Agreement made as of June 18, 1998, among the Company and Xxxxx
Xxxxxxx, as representative for an entity or group to be formed (the "Stock
Purchase Agreement"), agreed to issue to the Purchaser and the Designees named
in said Stock Purchase Agreement an option to purchase an aggregate of 250,000
shares of common stock of the Company ("Common Stock"); and
WHEREAS, Optionee, as one of the Designees, is to receive an option to
purchase shares of Common Stock pursuant to said Stock Purchase Agreement on the
terms hereinafter provided;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration the legal sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee the right and
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option (the "Option") to purchase all or any part of an aggregate of 25,000
shares of Common Stock, subject to adjustment as hereinafter provided. The
Option is in all respects limited and conditioned as provided herein, and as it
may be amended from time to time.
2. PURCHASE PRICE. The purchase price per share of the shares of Common
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Stock covered by the Option shall be $2.25.
3. TERM. Unless earlier terminated pursuant to any provision of this Option
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Agreement, this Option shall expire on June 30, 2003 (the "Expiration Date"),
which date is not more than five (5) years from the Grant Date. This Option
shall not be exercisable on or after the Expiration Date.
4. EXERCISE OF OPTION. The Option may be exercised at any time or from time
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to time, provided, however, that the Option may not be exercised for less than
100 shares at any one time. The Option shall remain subject to the provisions
in this Option Agreement, until the expiration of the term of this Option as set
forth in Paragraph 3 or until other termination of the Option.
5. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
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Option Agreement, the Option may be exercised upon written notice to the
Company, at its principal office, which is located at 0 Xxxxxxxxxxxx Xxx,
Xxxxxxxxx, Xxx Xxxxxx 00000. Such notice (a suggested form of which is
attached) shall state the election to exercise the Option and the number of
shares with respect to which it is being exercised; shall be signed by the
person or persons so exercising the Option; shall (if required by the terms
thereof) be accompanied by the investment certificate referred to in Paragraph
6; and shall be accompanied by payment of the full Option price of such shares.
The Option price shall be paid to the Company in cash or by certified check.
Upon receipt of such notice and payment, the Company, as promptly as
practicable (but no later than ren (10) days after receipt of such notice and
payment), shall deliver or cause to be delivered a certificate or certificates
representing the shares with respect to which the Option is so exercised. The
certificate or certificates representing the shares as to which the Option shall
have been so exercised shall be registered in the name of the person or persons
so exercising the Option (or, if the Option shall be exercised by the Optionee
and if the Optionee shall so request in the notice exercising the Option, shall
be registered in the name of the Optionee and the Optionee's spouse, jointly,
with right of survivorship) and shall be delivered as provided above to or upon
the written order of the person or persons exercising the Option. In the event
the Option shall be exercised by any person or persons after the legal
disability or death of the Optionee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All shares that shall be purchased upon the exercise of the Option as provided
herein shall be validly issued, fully paid and non-assessable by the Company.
6. SHARES TO BE PURCHASED FOR INVESTMENT. Unless the Company has theretofore
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notified the Optionee that a registration statement covering the shares to be
acquired upon the exercise of the Option has become effective under the
Securities Act of 1933 and the Company has not thereafter notified the Optionee
that such registration is no longer effective, it shall be a condition to any
exercise of this Option that the shares acquired upon such exercise be acquired
for investment and not with a view to distribution, and the person or persons
effecting such exercise shall submit to the Company a certificate of such
investment intent, together with such other evidence supporting the same as the
Company may request. The Company shall be entitled to restrict the
transferability of the shares issued upon any such exercise to the extent
reasonably necessary to avoid a risk of violation of the Securities Act of 1933
(or of any rules or regulations promulgated thereunder) or of any state laws or
regulations. Such restrictions may, at the option of the Company, be noted or
set forth in full on the share certificates.
7. SATISFACTION OF XXXX-XXXXX-XXXXXX REQUIREMENTS. It shall be a condition
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to the issuance of any shares to be acquired upon the exercise of the Option
that the Company shall have received a legal opinion in form and substance
reasonably satisfactory to the Company that (a) no filing prior to or in
connection with said issuance is required pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), or (b) all necessary notifications under the HSR Act
have been filed and the applicable waiting period under the HSR Act has expired.
8. TRANSFERABILITY OF OPTION. Except as provided in the next succeeding
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sentence, this Option is not transferable, in whole or in part, by the Optionee
otherwise than by the laws of descent and distribution, and, during the lifetime
of the Optionee, the Option shall be exercisable only by the Optionee or by his
guardian or legal representative. Notwithstanding the preceding sentence, this
Option shall be transferable, in whole or in part, by the Optionee at any time
prior to the termination of said Option, to (a) Xxxxx Xxxxxxx or any other
Designee named on Schedule 1.1 of the Stock Purchase Agreement, or (b) the
entity or group to be formed by said Designees, subject, however, to the
restrictions and limitations of Article VI of said Stock Purchase Agreement.
9. RIGHT OF COMPANY TO REPURCHASE SHARES AND CANCEL OPTION UNDER CERTAIN
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CIRCUMSTANCES. During the 30-day period following the second anniversary of the
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Closing Date (as defined in the Stock Purchase Agreement), the Company shall
have the right (i) to purchase any shares of Common Stock owned by the Optionee
as a result of exercise of this Option, and (ii) to cancel this Option, to the
extent it has not been exercised, if, during the two (2) year period following
the Closing Date, the
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Purchaser and the Designees under the Stock Purchase Agreement have not
fulfilled their financing obligations as set forth in Article VI of said Stock
Purchase Agreement.
10. DEATH. If the Optionee dies prior to the Expiration Date of this Option
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as set forth in Paragraph 3, this Option may be exercised, to the extent of the
number of shares with respect to which the Optionee could have exercised it on
the date of his or her death, or to any greater extent permitted by the Board of
Directors, by the Optionee's estate, personal representative or beneficiary who
acquired the right to exercise this Option by bequest or inheritance or by
reason of the Optionee's death, at any time prior to the Expiration Date
specified in Paragraph 3.
11. CAPITAL ADJUSTMENTS. The number of shares which are granted under this
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Option Agreement shall be adjusted to reflect any stock dividend, stock split,
share combination, or similar change in the capitalization of the Company. In
the event of a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation, each outstanding Option shall be
assumed by the surviving or successor corporation or by a parent or subsidiary
of such corporation.
12. GOVERNING LAW. This Option Agreement shall be construed in accordance
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with, and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this STOCK OPTION AGREEMENT to be
duly executed by its officers thereunto duly authorized, and the Optionee has
hereunto set his hand and seal, all on the day and year first above written.
ATTEST: TOTAL RESEARCH CORPORATION
[Corporate seal]
/s/Xxxxxxx X. Xxxxxx By:/s/Xxxxxx Xxxxxxxxx
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Secretary President
OPTIONEE
/s/Xxxxxxx Xxxxxxxx /s/Xxxxxx Xxxxxxxx
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Witness
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TOTAL RESEARCH CORPORATION
Notice of Exercise of Stock Option
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I hereby exercise the stock option granted to me on July 1, 1998, by Total
Research Corporation, with respect to the following number of shares of Total
Research Corporation common stock, par value $ .001 per share ("Shares"),
covered by said option:
Number of Shares to be purchased ________________
Option price per Share $ 2.25
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Total option price $
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Check one of the following to indicate method of payment:
_____ A. Enclosed is cash in the amount of $______ in full payment for such
Shares.
_____ B. Enclosed is a certified check in the amount of $______ in full
payment for such Shares.
Please have the certificate or certificates representing the purchased Shares
registered in the following name or names/1/_______________________and sent to
DATED: __________, 19___.
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Signature of Optionee
/1/ Certificates may be registered in the name of the Optionee alone or in the
names of the Optionee and his or her spouse, jointly, with right of
survivorship.
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