STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made as of February 1, 1999,
by and between Xxxxxx Natural Corporation, a Delaware corporation (the
"Company"), and Xxx X. Xxxxx ("Holder").
Preliminary Recitals
A. Holder is an employee of the Company or one of its subsidiaries or
affiliates.
B. Pursuant to the Xxxxxx Natural Corporation Stock Option Plan (the
"Plan"), the Company desires to xxxxx Xxxxxx an incentive stock option to
purchase shares of the Company's common stock, par value $.005 per share (the
"Common Stock").
NOW, THEREFORE, the Company and Holder agree as follows:
1. Grant of Incentive Stock Option. The Company hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase up to 72,000 shares of Common Stock, at the purchase price
of $4.44 per share, such ISO to be exercisable and exercised as hereinafter
provided.
2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's employment with the Company and its subsidiaries and affiliates
(the "Xxxxxx Natural Group") unless the employment is terminated by a member of
the Xxxxxx Natural Group for Cause (as defined below) or unless the employment
is terminated by reason of the death or Total Disability (as defined below) of
Holder. If the Holder's employment is terminated by a member of the Xxxxxx
Natural Group for Cause, the ISO shall expire as of the date employment
terminates. If the Holder's employment terminates due to his death or Total
Disability, then the ISO may be exercised by Holder or the person or persons to
which Holder's rights under this Agreement pass by will, or if no such person
has such right, by his executors or administrators, within six months after the
date of death or Total Disability, but no later than the expiration date
specified in Section 3(c) below. "Cause" means the Holder's act of fraud or
dishonesty, knowing and material failure to comply with applicable laws or
regulations or satisfactorily perform his duties of employment, insubordination
or drug or alcohol abuse, as determined by the Committee of the Xxxxxx Natural
Corporation Stock Option Plan (the "Committee"). "Total Disability" means the
complete and permanent inability of Holder to perform all of his duties of
employment with the Company, as determined by the Committee upon the basis of
such evidence, including independent medical reports and data, as the Committee
deems appropriate or necessary.
3. Exercise of Option
(a) Subject to the other terms of this Agreement regarding the
exercisability of the ISO, and provided that Holder is employed by a member of
the Xxxxxx Natural Group on the relevant date, the ISO may only be exercised in
respect of the number of shares listed in column A from and after the exercise
dates listed in column X,
Xxxxxx "X" Xxxxxx "X"
Number of Shares Exercise Date
14,400 February 2, 2000
14,400 February 2, 2001
14,400 February 2, 2002
14,400 February 2, 2003
14,400 February 2, 2004
(b) This ISO may be exercised, to the extent exercisable by its terms, from
time to time in whole or in part at any time prior to the expiration thereof.
Any exercise shall be accompanied by a written notice to the Company specifying
the number of shares as to which this ISO is being exercised (the "Option
Shares"). Notations of any partial exercise or installment exercise, shall be
made by the Company on Schedule A hereto.
(c) Notwithstanding anything else herein to the contrary, this ISO shall
expire six years from the date indicated above.
(d) The Holder hereby agrees to notify the Company in writing in the event
shares acquired pursuant to the exercise of this ISO are transferred, other than
by will or by the laws of descent and distribution, within two years after the
date indicated above or within one year after the issuance of such shares
pursuant to such exercise.
4. Payment of Purchase Price Upon Exercise. At the time of any exercise of
the ISO the purchase price of the ISO shall be paid in full to the Company in
either of the following ways or in any combination of the following ways:
(a) By check or other immediately available funds.
(b) With property consisting of shares of Common Stock. (The shares of
Common Stock to be used as payment shall be valued as of the date of
exercise of the ISO at the Closing Price as defined below. For
example, if Holder exercises the option for 4,000 shares at a total
Exercise Price of $8,000, assuming exercise price of $2.00 per share,
and the Closing Price is $5.00, he may pay for the 4,000 Option Shares
by transferring 1,600 shares of Common Stock to the Company.)
(c) For purposes of this Agreement, the term "Closing Price" means, with
respect to the Company's Common Stock, the last sale price regular-way
or, in case no such sale takes place on such date, the average of the
closing bid and asked prices regular-way on the principal national
securities exchange on which the securities are listed or admitted to
trading; or, if they are not listed or admitted to trading on any
national securities exchange, the last sale price of the securities on
the consolidated transaction reporting system of the National
Association of Securities Dealers ("NASD"), if such last sale
information is reported on such system or, if not so reported, the
average of the closing bid and asked prices of the securities on the
National Association of Securities Dealers Automatic Quotation System
("NASDAQ") or any comparable system or, if the securities are not
listed on NASDAQ or a comparable system, the average of the closing
bid and asked prices as furnished by two members of the NASD selected
from time to time by the Company for that purpose.
5. Purchase for Investment; Resale Restrictions. Unless at the time of
exercise of the ISO there shall be a valid and effective registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate qualification and
registration under applicable state securities laws relating to the Option
Shares being acquired, Holder shall upon exercise of the ISO give a
representation that he is acquiring such shares for his own account for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company, of such investment intent. Holder further agrees that he will not
sell or transfer any Option Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such proposed sale or transfer will not result in a violation of
the '33 Act, or a registration statement covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action letter from the Securities and Exchange Commission with
respect to the proposed transfer.
6. Nontransferability.This ISO shall not be transferable other than by will
or by the laws of descent and distribution. During the lifetime of Holder, this
ISO shall be exercisable only by Holder.
7. (a) Xxxxxxxxxxx.Xx the event of any change in the outstanding Common
Stock of the Company by reason of any stock recapitalization, merger,
consolidation, combination or exchange of shares, the kind of shares subject to
the ISO and their purchase price per share (but not the number of shares) shall
be appropriately adjusted consistent with such change in such manner as the
Board of Directors of the Company may deem equitable. In the event of a stock
dividend or stock split the kind of shares, their purchase price per share and
the number of shares shall be appropriately adjusted, consistent with such
change in such manner as the Board of Directors may deem equitable. Any
adjustment so made shall be final and binding on Holder. No adjustments shall be
made that would have the effect of modifying an ISO under Internal Revenue Code
xx.xx. 422 and 424.
(b) Notwithstanding anything else herein to the contrary if, within a
period of two (2) years after the occurrence of a change in control (as defined
in (c) below), the Holder's employment by the Xxxxxx Natural group is terminated
(unless his employment is terminated by the Xxxxxx Natural group for cause (as
defined above) or unless his employment is terminated voluntarily by Holder),
the option or any portion thereof not theretofore exercisable, shall immediately
become exercisable in its entirety and the option (being the option to purchase
shares of Common Stock subject to the applicable provisions of the Plan and
awarded in accordance with the Plan in terms of Section 1 above) may, with the
consent of Holder, be purchased by the Company for cash at a price equal to the
fair market value (as defined in 7(ii) below) less the purchase price payable by
Holder to exercise the option as set out in Article 1 above for one share of
Common Stock of the Company multiplied by the number of shares of Common Stock
which Holder has the option to purchase in terms of Article 1 above.
(c) For the purposes of this Agreement (i) "Change in Control" means; (A)
the acquisition of "Beneficial Ownership" by any person (as defined in rule
13(d) - 3 under the Securities Exchange Act 1934), corporation or other entity
other than the Company or a wholly owned subsidiary of the Company of 20% or
more of the outstanding Stock, (B)the sale or disposition of substantially all
of the assets of the Company, or (C)the merger of the Company with another
corporation in which the Common Stock of the Company is no longer outstanding
after such merger. (ii) "Fair Market Value" means, as of any date, the Closing
Price for one share of the common Stock of the company on such date.
8. No Rights as Stockholder.Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.
9. No Right to Continue Employment. This Agreement shall not confer upon
Holder any right with respect to continuance of employment with any member of
the Xxxxxx Natural Group nor shall it interfere in any way with the right of any
such member to terminate his employment at any time.
10. Compliance With Law and Regulation.This Agreement and the obligation of
the Company to sell and deliver shares of Common Stock hereunder shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required. If at
any time the Board of Directors of the Company shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or federal law,
or (ii) the consent or approval of any government regulatory body, is necessary
or desirable as a condition of or in connection with the issue or purchase of
shares of Common Stock hereunder, this ISO may not be exercised in whole or in
part unless such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors.
11. Tax Withholding Requirements. The Company shall have the right to
require Holder to remit to the Company an amount sufficient to satisfy any
federal, state or local withholding tax requirements prior to the delivery of
any certificate or certificates for Common Stock.
12. Fractional Shares. Notwithstanding any other provision of this
Agreement, no fractional shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate Holder
in any way for such fractional shares.
13. Notices. Any notice hereunder to the Company shall be addressed to it
at its office at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx with a copy to Xxxxxxxx Xxxx, Xxxxxxx Breed Xxxxxx &
Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and any notice hereunder to
Holder shall be addressed to him at __________, subject to the right of either
party to designate at any time hereafter in writing some other address.
14. Amendment. No modification, amendment or waiver of any of the
provisions of this Agreement shall be effective unless in writing specifically
referring hereto, and signed by both parties.
15. Governing Law. This Agreement shall be construed according to the laws
of the State of Delaware and all provisions hereof shall be administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Xxxxxx Natural Corporation has caused this Agreement to
be executed by a duly authorized officer and Holder has executed this Agreement
both as of the day and year first above written.
XXXXXX NATURAL CORPORATION
By:/s/XXXXXX XXXXX
-----------------------------
Title: Chairman of the Board
/s/XXX X. XXXXX 2/2/99
-----------------------------------
Xxx X. Xxxxx
STOCK OPTION ADDENDUM AGREEMENT
This Addendum Agreement is made as of September 25, 2000, by and between
Xxxxxx Natural Corporation, a Delaware corporation (the "Company") and Xxx X.
Xxxxx ("Holder").
Preliminary Recitals
A. The Holder and Company entered into a Stock Option Agreement (the "Stock
Option Agreement") as of February 1, 1999.
B. Articles 3(a), 3(c), and 7(b) of the Stock Option Agreement do not
correctly reflect the agreement between the parties and consequently the
parties, by mutual agreement, wish to amend the provisions of Articles 3(a),
3(c), and 7(b) on and with effect from February 1, 1999.
NOW, THEREFORE, it is agreed:
1. Article 3(a) of the Stock Option Agreement be and is hereby amended by
the deletion of the entire columns A and B therein and by the substitution
therefor of new columns A and B as follows:
" Column "A" Column "B"
Number of Shares Exercise Date
12,000 February 2, 2000
12,000 February 2, 2001
12,000 February 2, 2002
12,000 February 2, 2003
12,000 February 2, 2004
12,000 February 2, 2005"
2. Article 3(c) of the Stock Option Agreement be and is hereby amended by
the deletion of the word "six" therein and by the substitution therefore of the
word "seven".
3. Article 7(b) of the Stock Option Agreement be and is hereby amended by
the deletion of the entire Article 7(b) and by the substitution therefore of a
new Article 7(b) as follows: "7. (b) Notwithstanding anything else herein to the
contrary, if, after the occurrence of a change in control (as defined in (c)
below), the Holder's employment by the Xxxxxx Natural group is terminated
(unless his employment is terminated by the Xxxxxx Natural group for cause (as
defined above) or unless his employment is terminated voluntarily by Holder),
and on the date of termination less than 36,000 shares out of the 72,000 shares
that are the subject of this Stock Option Agreement shall theretofore have
become exercisable, then the difference between the number of shares that shall
theretofore have become exercisable and 36,000 shares ("the deemed vested
shares") shall be deemed to be immediately exercisable and that portion of the
option (being the option to purchase shares of Common Stock subject to the
applicable provisions of the Plan and awarded in accordance with the Plan in
terms of Article 1 above) may, with the consent of Holder, be purchased by the
Company for cash at a price equal to the fair market value (as defined in 7(ii)
below) less the purchase price payable by Holder to exercise the option in
respect of that number of shares that shall at that time be exercisable by
Holder as set out in 1 above for one share of Common Stock of the Company
multiplied by the number of shares of Common Stock which Holder at that time has
the option to purchase and are exercisable, in terms of Article 1 above as read
together with the provisions of this Article 7(b)."
4. Save as aforesaid, the Stock Option Agreement shall continue to apply
and be of full force and effect in all other respects.
IN WITNESS WHEREOF, Xxxxxx Natural Corporation has caused this Agreement to
be executed by a duly authorized officer and Holder has executed this Agreement
both as of the day and year first above written.
XXXXXX NATURAL CORPORATION
By: /s/XXXXXX XXXXX 10/3/2000
Title: Chairman of the Board Date
/s/ XXX XXXXX 10/2/2000
Xxx X. Xxxxx Date
