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EXHIBIT 10.29
STOCK GRANT AND STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered into as of
the 24th day of December, 1997, by and between Bikers Dream, Inc., a California
corporation ("Company") and Xxxx Xxxxxxxx ("Optionee").
RECITALS
WHEREAS, Rosenman is presently employed as the Company's President and
Chief Executive Officer pursuant to an employment agreement dated August 31,
1997, as amended, (the "Employment Agreement");
WHEREAS, in connection therewith, the Company has agreed to xxxxx
Xxxxxxxx certain shares of the Company's common stock upon the terms and
conditions contained herein; and
WHEREAS, in connection therewith, the Company has agreed to grant to
Optionee, effective September 1, 1997, an option to purchase shares of the
Company's common stock upon the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. Stock Grant. Company shall xxxxx Xxxxxxxx up to 150,000 shares of the
Company's restricted common stock, to be issued in 50,000 share allotments on
each of the first, second and third anniversaries of the execution of the
Employment Agreement, provided as to each such allotment Rosenman is still
employed thereunder at each such vesting date.
2.. Grant of Option. Company hereby grants to Optionee, effective
September 1, 1997, the right and option to purchase 2,300,000 shares of the
Company's restricted common stock (the "Option Shares") at an exercise price of
$1.00 per share, subject to the terms of this agreement (the "Option"). The
Option shall vest as set forth on Schedule A attached hereto and incorporated
herein by reference.
3. Option Exercise, Stockholder Rights and Legal Requirements
(i) Exercise of Option. The Option may be exercised, to the
extent it has vested, at any time during the five year period beginning at the
vesting date.
(ii) Method of Exercise. The Option may be exercised by giving
written notice of exercise of the Option to the Company at the address set forth
below. The notice shall state Optionee's election to exercise the Option and the
number of Option Shares with respect to which the Option is being exercised and
shall be accompanied by full payment of the purchase price of the shares. A
certificate or certificates for the shares shall be delivered to Optionee as
soon as practicable after receipt of the notice and payment. If the Company
shall determine, in its discretion, that the satisfaction of withholding tax or
other withholding liabilities under any federal, state or local law is necessary
in connection with the exercise of the option, then in such event, the exercise
of the Option shall not be effective unless and until the Company has received
payment of all amounts it is required to withhold.
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(iii) Stockholder Rights. No rights or privileges of a
stockholder in the Company are conferred by reason of the granting of this
Option. Optionee will not become a stockholder in the Company with respect to
the Option Shares unless and until the Option has been properly exercised and
the option price fully paid as to the number of option shares as to which the
option has been exercised.
(iv) Legal Requirements. The Company may require Optionee, or any
transferee, as a condition of exercising the Option, (1) to give written
assurances satisfactory to the Company as to the Optionee's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (2) to give written assurances satisfactory
to the Company stating that such person is acquiring the Option Shares for such
person's own account and not with any present intention of selling or otherwise
distributing the shares. These requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (i) the issuance of the shares
upon the exercise of the Option has been registered under a then currently
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), or (ii) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws.
4. Change in Control. On the date of any termination of Optionee's
employment arising pursuant to a Change in Control (as hereinafter defined),
whether voluntary or involuntary, if there exists no basis for termination
pursuant to Section 6 of the Employment Agreement, the vesting schedule
referenced in paragraph 2 shall be accelerated and the entirety of the Option
shall be immediately vested.
(a) A "Change in Control" shall occur when:
(i) any person (as such term is used in Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934 as in effect on the date
hereof, herein called the "Act"), other than a person beneficially owning (as
such term is used in Section 13(d)(1) of the Act) 15% or more of the voting
securities of the Company on August 31, 1997, or any person substantially all of
the equity of which is owned by the persons who beneficially owned the voting
securities of the Company on August 31, 1997, becomes the beneficial owner,
directly or indirectly, of securities representing at least 25% of the combined
voting power of the then outstanding securities of the Company; or
(ii) during any period of twenty-four consecutive months
(whether commencing before or after the date of this Agreement), individuals who
at the beginning of such period constituted the Company's Board of Directors
cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election, of each new director (A) was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period or (B) was pursuant to an arrangement
the same as or substantially similar to any arrangement pursuant to which such
new director's predecessor was nominated; or
(iii) unless theretofore approved by a vote of at least
two-thirds of the Continuing Directors (as hereinafter defined), there is the
approval by the stockholders of the Company of any merger or consolidation, or
any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in
one transaction or a series of transactions) of any assets of the Company or any
subsidiary with or to
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(A) any Interested Stockholder (as hereinafter defined) or (B) any other person
which is, or after such transaction would be, an Affiliate (as hereinafter
defined) of an Interested Stockholder; or
(iv) there is the approval by the stockholders of the
Company of any plan or proposal for the Company to be Acquired (as hereinafter
defined) or for the liquidation or dissolution of the Company.
(b) The Company shall be considered to be "Acquired" only if the
owners of the Company's voting securities immediately prior to the effective
date of any sale, reorganization, merger, consolidation, liquidation or similar
transaction will not own immediately thereafter, as a result of having owned
such voting securities, securities representing a majority of the combined
voting power of the then outstanding securities of the Company or the entity
that then owns, directly or indirectly, the Company or all or substantially all
its assets.
(c) "Interested Stockholder" shall mean any person (other than
the Company, any subsidiary thereof, any person owning any voting securities of
the Company on August 31, 1997 or any person substantially all of the equity of
which is owned by the persons who beneficially owned the voting securities of
the Company on August 31, 1997) who or which:
(i) is the beneficial owner, directly or indirectly, of
securities representing 10% or more of the combined voting power of the then
outstanding securities of the Company;
(ii) is an Affiliate of the Company, and at any time
within the two year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of securities representing 10% or more
of the combined voting power of the then outstanding securities of the Company;
(iii) is an assignee of or has otherwise succeeded to any
voting securities of the Company which were at any time within the two year
period immediately prior to the date in question beneficially owned by an
Interested Stockholder, if such assignment or succession shall have occurred in
the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(e) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Act.
(f) "Continuing Director" means any member of the Company's Board
of Directors who is unaffiliated with the Interested Stockholder and was a
member of the Board prior to the time that the Interested Stockholder became an
Interested Stockholder and any successor or a Continuing Director who is
unaffiliated with the Interested Stockholder and is recommended to succeed a
Continuing Director by a vote of at least two-thirds of the Continuing Directors
then on the Board.
4. Restrictions on Transfer. Neither the Option granted hereby nor the
Option Shares shall be sold or transferred until either (i) they first have been
registered under the Securities Act, or (ii) the Company first has been
furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Securities Act.
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The certificates evidencing the shares issued upon exercise of
the Option will bear the following restrictive legend unless a registration
statement is in effect with respect to the sale of Option Shares issued upon
exercise of the Option:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE ACT") AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH SHARES ARE
REGISTERED UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS
NOT REQUIRED."
5. Termination. This Agreement is subject to the continuing
effectiveness of the Employment Agreement. The termination of the Employment
Agreement will result in the concurrent termination of this Agreement, provided,
however, that any portion of the Option that has previously vested shall remain
vested notwithstanding such termination, but any remaining portion of the Option
shall be canceled except as provided in paragraph 3 above.
6. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission (with subsequent letter confirmation by mail) to
the parties, their successors in interest or their assignees at the following
addresses, or at such other addresses as the parties may designate by written
notice in the manner aforesaid:
If to the Company: Bikers Dream, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx, Director
Fax: (000) 000-0000
If to Optionee: Xxxx Xxxxxxxx
000 Xxxxxxx Xxxxx #000
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
7. Assignability and Parties in Interest. This Agreement shall not be
assignable by any of the parties without consent of the other. This Agreement
shall inure to the benefit of and be binding upon the parties and their
respective permitted successors and assigns.
8. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal law, and not the law pertaining to
conflicts or choice of law, of the State of California.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
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10. Complete Agreement. This Agreement contains the entire agreement
among the parties with respect to the specific subject matter hereof and shall
supersede all previous oral and written and all contemporaneous oral
negotiations, commitments and understandings.
11. Modifications, Amendments and Waivers. This Agreement may be
modified, amended or otherwise supplemented only by a writing signed by all of
the parties. No waiver of any right or power hereunder shall be deemed effective
unless and until a writing waiving such right or power is executed by the party
waiving such right or power.
12. Attorneys' Fees and Costs. Should any party institute any action or
proceeding in any court to enforce any provision of this Agreement, the
prevailing party shall be entitled to receive from the losing party reasonable
attorneys' fees and costs incurred in such action or proceeding, whether or not
such action or proceeding is prosecuted to judgment.
13. Contract Interpretation; Construction of Agreement.
(a) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Article, section, exhibit, schedule, preamble, recital and party
references are to this Agreement unless otherwise stated.
(b) No party, nor its respective counsel, shall be deemed the
drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against any party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
COMPANY
/s/ Xxxx Xxxx
----------------------------------------
Xxxx Xxxx, Secretary
OPTIONEE
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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SCHEDULE A
VESTING SCHEDULE
1. The Option will vest as to the number of shares listed in the "Automatic
Vesting" column on the indicated date. The Option will vest as to the number of
shares indicated under the Performance Options column as indicated in paragraph
2.
Date Automatic Vesting Performance Options
---- ----------------- -------------------
September 1, 1998 400,000 --
September 1, 1999 200,000 200,000
September 1, 2000 250,000 250,000
September 1, 2001 250,000 250,000
September 1, 2002 250,000 250,000
2. The Performance Options will vest as follows:
Percent of Budget Achieved Percent of Performance Options Vesting
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up to 75% 0%
75% to 100% 75% to 100%
The Performance Options will vest ratably with the percentage of budget
achieved in excess of 75%.
The budget referenced herein is the budget which shall be submitted
annually by Xx. Xxxxxxxx and the management team, and approved by the board of
directors.
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