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EXHIBIT 10.10
STAR VENDING, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
STAR VENDING, INC., a Nevada corporation (the "Company"), has granted
to XXXXXX XXXXXXXX, XX. (the "Optionee"), an option (the "Option") to purchase a
total of One Hundred Thousand (100,000) shares (the "Shares") of its common
stock ("Common Stock"), subject to the terms and conditions set forth in this
Agreement.
1. NATURE OF THE OPTION. This Option is not intended to qualify as, and
under no circumstances shall be deemed to be, an Incentive Stock Option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. EXERCISE PRICE. The exercise price is $3.00 for each share of Common
Stock ("Exercise Price").
3. EXERCISE OF OPTION. This Option shall be exercisable during its term
as follows:
3.1 RIGHT TO EXERCISE. Subject to subsections 3.1.2, 3.1.3,
3.1.4 and 3.1.5 below, this Option shall become exercisable as follows: (1)
thirty-four percent (34%) of the shares subject to the Option shall vest as of
the Date of Grant specified below (2) thirty-three percent (33%) of the Shares
subject to the Option, at any time after May 14, 1997; and thirty-three percent
(33%) of the Shares subject to the Option, at any time after May 14, 1998.
3.2 METHOD OF EXERCISE. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the number
of shares in respect of which the Option is being exercised, and such
representations and agreements as the Company may deem to be necessary or
appropriate under any applicable law or regulation. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied by payment
of the exercise price.
3.3 RESTRICTIONS ON EXERCISE. The Option may not be exercised
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other law or regulation. The Company shall have
no obligation to register or qualify the Option or such Shares for sale under
any such law or regulation. No Shares will be issued pursuant to the exercise of
an Option unless such issuance and
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such exercise shall comply with the requirements of any stock exchange upon
which the Common Stock may then be listed. 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 with respect to such Shares.
3.4 EXERCISABLE ONLY BY OPTIONEE; EXCEPTIONS. The Option shall
not be exercisable during the lifetime of the Optionee by any person other than
the Optionee. In the event of Optionee's death, disability or other termination
of engagement or employment, the exercisability of the Option is governed by
Sections 5, 6 and 7 below, subject to the limitation contained in Section 3.5.
3.5 EXPIRATION OF OPTION. The Option may not be exercised more
than ten (10) years from the date of grant of this Option, and may be exercised
during such term only in accordance with the terms of this Agreement. This
Option shall terminate upon any material breach of the terms of this Agreement
by Optionee including, without limitation, any breach of the representations set
forth in Section 12.
3.6 METHOD OF PAYMENT. Payment of the exercise price shall be
by cash, wire transfer, or a check payable to the Company in next day funds.
4. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company an executed Restricted Stock Agreement in the
form attached as Exhibit A.
5. TERMINATION OF STATUS AS A CONSULTANT. In the event of termination
of Optionee's engagement by the Company as a consultant for any reason other
than the permanent disability or death of the Optionee, the voluntary
termination by Optionee or for cause, Optionee may, but only within one hundred
eighty (180) days after the date of such termination (but in no event later than
the date of expiration of the term of this Option as set forth in Section 3.5),
exercise this Option to the extent that Optionee was entitled to exercise it at
the date of such termination. To the extent that Optionee was not entitled to
exercise this Option at the date of such termination, or if Optionee does not
exercise this Option within the time specified herein, the Option shall
terminate. In the event that Optionee's engagement is terminated (i) voluntarily
by Optionee, or (ii) for cause, this Option shall terminate. Cause shall be
determined as set forth in Optionee's Consulting Agreement with the Company.
Nothing contained in this Option shall confer upon the Optionee any right to
continue in his relationship with the Company or
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shall interfere in any way with the rights of the Company, which are hereby
reserved, to reduce the Optionee's compensation from the rate in existence on
the date of grant or to terminate the Optionee's relationship with the Company
for any reason.
6. DISABILITY OF OPTIONEE. In the event of termination of Optionee's
engagement with the Company as a result of Optionee's total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within twelve (12) months from the date of such termination (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 3.5) exercise this Option to the extent Optionee was entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option (which Optionee was entitled to exercise) within the
time specified herein, the Option shall terminate.
7. DEATH OF OPTIONEE. In the event of death of Optionee during the term
of this Option and while a consultant of the Company and having been in
continuous status as a consultant since the date of grant of the Option, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the date of expiration of the term of this
Option as set forth in Section 3.5), by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of death.
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs and
successors of the Optionee and any successor by operation of law to the Company.
9. OPTIONEE NOT A SHAREHOLDER. Neither the Optionee nor any other
person entitled to exercise the Option shall have any of the rights or
privileges of a shareholder of the Company with respect to any of the Shares
until the date of issuance of a stock certificate for such Shares. Except as set
forth in Section 10 below, no adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued.
10. ADJUSTMENT OF EXERCISE PRICE. If any of the following
events shall occur at any time or from time to time prior to the
exercise in full or expiration of the Option, the following
adjustments shall be made in the Exercise Price.
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10.1 RECAPITALIZATION. In case the Company effects a subdivision,
combination, reclassification or other recapitalization of its outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, the Exercise Price in effect immediately after such subdivision,
combination, reclassification or other recapitalization shall be proportionately
decreased or increased, as the case may be.
10.2 STOCK DIVIDENDS. If the Company shall declare a dividend on its
Common Stock payable in stock or other securities of the Company, the Optionee
shall, without additional cost, be entitled to receive upon the exercise of the
Option, in addition to the Shares to which the Optionee is otherwise entitled
upon such exercise, the number of shares of stock or other securities that the
Optionee would have been entitled to receive if the Optionee had been a holder,
on the record date of such dividend, of the number of Shares so purchased under
the Option. No adjustments shall be made for dividends in cash or other
property.
10.3 NUMBER OF SHARES ADJUSTED. After any adjustment of the Exercise
Price pursuant to Section 10, the number of Shares issuable at the new Exercise
Price shall be adjusted to the number obtained by (i) multiplying the number of
Shares issuable upon exercise of the Option immediately before such adjustment
by the Exercise Price in effect immediately before such adjustment and (ii)
dividing the product so obtained by the new Exercise Price.
10.4 CALCULATION OF ADJUSTMENTS. The foregoing adjustments to the
Exercise Price and the number of Shares shall be made in good faith by the Board
of Directors of the Company, whose determination in that respect shall be final,
binding and conclusive.
11. MERGER.
11.1 ASSUMPTION. In the event of any merger, consolidation or
purchase of substantially all shares of the Company where the holders of Common
Stock are to receive stock or other securities of the surviving or acquiring
company, the Option shall be assumed by, be binding upon and inure to the
benefit of such surviving or acquiring company, and shall continue to be
governed by, to the extent applicable, the terms and conditions of this
Agreement.
11.2 ADJUSTMENT. After the consummation of a consolidation or
merger of the Company with or into any other corporation, then the Optionee
shall have the right to receive the kind and amount of shares of stock or other
securities or property receivable upon such consolidation or merger by a holder
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of the number of shares of Common Stock issuable upon exercise of the Option
immediately prior to such consolidation or merger.
12. REPRESENTATIONS OF OPTIONEE. Optionee represents and warrants that
the engagement of Optionee as a consultant by the Company and the execution,
receipt and exercise of this Option by Optionee do not and will not conflict
with, violate, breach or constitute a default under, or result in the
acceleration of any obligation under, (i) any provision of any contract,
agreement, instrument, court order, arbitration award, judgment or decree to
which Optionee is a party or by which he is bound or (ii) any law, rule,
regulation or other provision or restriction of any kind or character to which
Optionee is subject.
13. GENERAL PROVISIONS.
13.1 AMENDMENTS; WAIVERS. This Agreement may be amended only by
agreement in writing of all parties. No waiver of any provision nor consent to
any exception to the terms of this Agreement shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
13.2 ENTIRE AGREEMENT. This Agreement, together with Exhibit A,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties.
13.3 GOVERNING LAW. This Agreement and the legal relations between
the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts made and performed in such
State.
13.4 ATTORNEY'S FEES. In the event of any legal action for the
breach of this Agreement or any dispute related to or arising from this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and expenses incurred in such action. Attorneys' fees incurred in
enforcing any judgment in respect of this Agreement are recoverable as a
separate item. The preceding sentence is intended to be severable from the other
provisions of this Agreement and to survive any judgment and, to the maximum
extent permitted by law, shall not be deemed merged into any such judgment.
13.5 RECEIPT OF AGREEMENT. Each of the parties hereto acknowledges
that such party has read this Agreement in its entirety and does hereby
acknowledge receipt of a fully executed copy thereof. A fully executed copy
shall be an original for all purposes, and is a duplicate original.
13.6 NOTICES. Any written notice required or permitted to be given
shall be deemed delivered either when personally
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delivered or when mailed, registered or certified, postage prepaid with return
receipt requested, if to Optionee, addressed to Optionee at the last residence
address of Optionee as shown in the records of the Company, and if to the
Company, addressed to the Chairman of the Board of the Company at the principal
office of the Company.
13.7 SEVERABILITY. If any provision of this Agreement is determined
to be invalid, illegal or unenforceable by any governmental entity, the
remaining provisions of this Agreement to the extent permitted by law shall
remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date set forth below.
Date of Grant: May 15, 1996
STAR VENDING, INC.
a Nevada Corporation
By:_____________________
Xxxx Xxxxx, President
_________________________
Xxxxxx Xxxxxxxx, Xx.
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EXHIBIT A
