AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT
Exhibit 10.6
AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT
This Amendment No. 1 (this “Amendment”) dated as of November 18, 2002 to that certain Stock
Option Agreement (the “Stock Option Agreement”), dated as of October 14, 2002, by and between
Natural Health Trends Corp., a Florida corporation the (“Company”), and Xxxxx X. XxXxxx (the
“Optionee”).
WITNESSETH:
WHEREAS, the Company and Optionee are parties to the Stock Option Agreement, a copy of which
is attached hereto as Exhibit A; and
WHEREAS, the parties to the Stock Option Agreement desire to amend the Stock Option Agreement to
amend the cashless exercise provision contained therein.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Effective as of the date hereof, the Stock Option Agreement is hereby amended by
deleting the following phrase contained in the first sentence of Section 4:
“the Optionee may, at its election”
and in lieu thereof the following phrase shall be inserted:
“the Company may, at its election, permit the Optionee to”.
2. This amendment shall be governed by and construed in accordance with the Laws of the State of
Texas, without regard to principles of conflicts of law.
3. Except as otherwise specifically set forth herein, all of the terms and provisions of
the Stock Option Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day first above written.
| NATURAL HEALTH TRENDS CORP. | ||||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||||
| Name: XXXX X. XXXXXXXX | ||||||
| Title: President | ||||||
| By: | /s/ Xxxxx X. XxXxxx | |||||
This Agreement, dated as of October 14, 2002 by and between Natural Health Trends Corp., a
Florida corporation (the “Company”), and Xxxxx X. XxXxxx (the “Optionee”).
WITNESSETH:
WHEREAS, the Company considers it to be in its best interests and in the best interests of its
stockholders that the Optionee be given the opportunity to acquire a proprietary interest in the
Company by possessing an option to purchase certain shares of common stock, par value $.001 per
share (the “Common Stock”), of the Company in accordance with the provisions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual promises contained herein, it is agreed
by and between the parties as follows:
1. Grant of Option. The Company hereby grants to Optionee the right, privilege and
option (the “Option”) to purchase all or any part of 57,000,000 shares of Common Stock (the “Option
Shares”) at a purchase price of $.01 per share in the manner and subject to the conditions provided
herein.
2. Time of Exercise of Option. The Option is exercisable in full
commencing on the date hereof through October 14, 2012 subject to the terms of this Agreement.
3. Method of Exercise. The Option shall be exercised by written notice directed to
the Company at the Company’s principal place of business, accompanied by a check in payment of the
option price for the number of Option Shares specified and paid for in full. The Company shall
make prompt delivery of such Option Shares once payment clears, provided that if any law or
regulation requires the Company to take any action with respect to the Option Shares specified in
such notice before the issuance thereof, then the date of delivery of such Option Shares shall be
extended for the period necessary to take such action. If the Optionee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery thereof, the Optionee’s right to
purchase such Option Shares may be terminated by the Company. The date specified in the Optionee’s
notice as the date of exercises shall be deemed the date of exercise of the Option, provided that
payment in full for the Option Shares to be purchased upon such exercise shall have been received
by such date. No fractional shares may be purchased hereunder.
4. Cashless Exercise. At any time during the term, the Optionee may, at its
election, exchange these options, in whole or in part (an “Option Exchange”), into the number of
shares determined in accordance with this paragraph 4 by surrendering these
Options at the principal office of the Company, accompanied by a notice stating the Optionee’s
intent to effect such exchange, the number of shares to be exchanged and the date on which the
Optionee requests that such Option Exchange occur (the “Notice of Exchange”). The Option Exchange
shall take place on the date specified in the Notice of Exchange or, if later, the date the Notice
of Exchange is received by the Company (the “Exchange Date”). Certificates for the shares issuable
upon such Option Exchange and, if applicable, a new Option of like tenor evidencing the balance of
the shares remaining subject to this Option, shall be issued as of the Exchange Date and delivered
to the Optionee within seven (7) business days following the Exchange Date. In connection with any
Option Exchange, the Option shall represent the right to subscribe for and acquire the number of
shares (rounded to the next highest integer) equal to (i) the number of shares specified by the
Optionee in its Notice of Exchange (the “Total Number”) less (ii) the number of shares equal to the
quotient obtained by dividing (A) the product of the Total Number and the then existing exercise
price by (B) the current market value of a share of the Company’s common stock.
5. Termination of Option. The Option and all rights granted by this Agreement, to
the extent such rights have not been exercised, will terminate and become null and void ten years
from the date hereof or upon ninety (90) days after the termination of the Optionee.
6. Adjustments in Event of Change in Common Stock. In the event of any change in
the Common Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar change affecting the
Common Stock, the number and kind of Option Shares subject to Option hereunder and the purchase
price per Option Share thereof shall be appropriately adjusted consistent with such change in such
manner as the Committee may reasonably deem equitable.
7. Piggyback Registration Rights. Simultaneous herewith, the Company shall grant
to the Optionee Piggyback Registration Rights, asset forth in Exhibit “A” annexed hereto.
8. Rights Prior to Exercise of Option. The Optionee shall have no rights as a
stockholder of the Company with respect to the Option Shares until full payment of the option price
and delivery of such Option Shares as herein provided. Nothing contained herein or in the Plan
shall be construed as creating or evidence of any agreement on the part of the Company to continue
to employ or retain the Optionee in any capacity.
9. Investment Representation. The Optionee, as a condition to the Optionee’s
exercise of this Option, shall represent to the Company that the shares of Common Stock that the
Optionee acquires hereunder are being acquired by the Optionee for investment and not with a view
to distribution or resale thereof, unless counsel for the Company is then of the opinion that such
a representation is not required under the Securities Act of 1933, as amended, or any other
applicable law, regulation or rule of any
governmental agency, except that this representation shall not apply to any transaction by Optionee
pursuant to a registration statement under the Securities Act.
10. Waiver; Entire Agreement. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or
different nature. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof.
11. Governing Law. The validity, construction, interpretation and effect of this
Agreement shall exclusively be governed by and determined in
accordance with the internal laws of
the State of Texas, which is the sole jurisdiction in which any issues relating to this Agreement
may be litigated.
12. Binding Effect. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date and
year first above written.
| NATURAL HEALTH TRENDS CORP. | ||||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||||
| Name: | XXXX X. XXXXXXXX | |||||
| Title: | President | |||||
| THE OPTIONEE | ||||||
/s/ Xxxxx X. XxXxxx |
||||||
| Xxxxx X. XxXxxx | ||||||
EXHIBIT A
The Investor shall have piggy-back registration rights with respect to the Investor Shares then
held by the Investor (collectively, the “Remaining Investor Shares”), subject to the conditions set
forth below. If, at any time the Company participates (whether voluntarily or by reason of an
obligation to a third party) in the registration of any shares of the Company’s stock (other than a
registration on Form S-4 or Form S-8), the Company shall give written notice thereof to the
Investor and the Investor shall have the right, exercisable within ten (10) business days after
receipt of such notice, to demand inclusion of all or a portion of the Investor’s Remaining
Investor Shares in such registration statement. If the Investor exercises such election, the
Remaining Investor Shares so designated shall be included in the registration statement at no cost
or expense to the Investor (other than any costs or commissions which would be borne by the
Investor under the terms of the Registration Rights Agreement). If, in connection with any
underwritten offering for the account of the Company the managing underwriter or underwriters
thereof (collectively, the “Underwriter”) shall impose a limitation on the number of shares of
Common Stock which may be included in the registration statement because, in the Underwriter’s
judgement, such limitation is necessary to effect an orderly public distribution of securities
covered thereby, then the Company shall be obligated to include in such registration only such
limited portion of the Registrable Securities for which such Investor has requested inclusion
hereunder as the Underwriter shall permit. Any exclusion of Registrable Securities shall be made
pro rata among the Investors seeking to include Registrable Securities, in proportion to the number
of Registrable Securities sought to be included by such Investors; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has first excluded all
outstanding securities the Investors of which are not entitled by right to inclusion of securities
in such registration statement; and provided further, however, that, after giving effect to the
immediately preceding proviso, any exclusion of Registrable Securities shall be made pro rata with
Investors of other securities having the right to include such securities in such registration
statement. The Investor’s rights under this Section shall expire at such time as the Investor can
sell all of the Remaining Investor Shares under Rule 144 (k) without volume or other restrictions
or limit.
