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EXHIBIT 4(d)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of October 31, 1997, is
entered into between VERSUS TECHNOLOGY, INC., a Delaware Corporation (the
"Corporation"), and Xxxxxx Xxxxx, a Director of the Corporation (herein
"Director").
W I T N E S S E T H:
The Corporation desires, by affording the Director an
opportunity to purchase shares of its Common Stock, $.01 par value, to provide
the Director with an added incentive to join or to continue in his capacity as
a Director of the Corporation and to continue and increase his supplemental
efforts as described below.
In consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto hereby agree
as follows:
1. Grant. The Corporation irrevocably grants to the
Director the right and option (the "Option") to purchase all or any part of an
aggregate of 100,000 shares of Common Stock on the terms and conditions herein
set forth.
2. Price. The purchase price of the shares of Common
Stock covered by the Option shall be $1.031 per share, being equal to or in
excess of the fair market value of the Common Stock on the date hereof.
3. Time of Exercise. The term of the Option shall be for
a period of five (5) years from the date hereof, subject to earlier termination
as provided in this Agreement. Except as provided in Paragraphs 5 and 6
hereof, the Option may not be exercised unless the
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Director shall at the time of exercise be a Director of the Corporation.
Neither the Option nor any rights related to the Option shall be exercisable
for a period of six months from the date hereof.
4. No Transfer. The Option shall not be transferable by the Director
otherwise than by Will or the laws of descent and distribution, except to one or
more family members of the Director or one or more trusts for the benefit of
family members of the Director. The Option may not be assigned, transferred
(except as aforesaid), pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of the Option contrary to the provisions hereof and the levy
of any attachment or similar process upon the Option shall be null and void ab
initio and without effect.
5. Termination. In the event the Director's service as a Director
of the Corporation shall be terminated for any reason other than death, the
Option may be exercised by the Director at any time within six months after such
date (or one year after such date if the Director is disabled), but in no event
after the expiration of five years from the date hereof. Disability, for the
purposes of this Agreement, shall constitute four consecutive quarters of being
unable to render services as a director of the Company as a result of a physical
or mental incapacity.
6. Death of Director. If the Director shall die while entitled to exercise
the Option, the Option may be exercised by the legatee or legatees of the Option
under the Director's Will, the personal representative or distributees of the
Director to the extent that the
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Option would otherwise have been exercisable by the Director at any time within
a period of one year after the date of the Director's death, but this provision
shall not otherwise extend the five (5) year duration of the Option.
7. Anti-Dilution Adjustments. In the event of any change in the
outstanding Common Stock of the Corporation by reason of stock dividends, stock
splits, recapitalizations, mergers, consolidations, combinations or exchanges of
shares, split-ups, split-offs, liquidations or other similar changes in
capitalization, or any distributions to common stockholders other than cash
dividends, the numbers, class and prices of shares covered by this Option shall
be equitably and appropriately adjusted by the remaining members of the Board of
Directors, whose determination shall be conclusive; provided, however, that no
such adjustment shall give the Director any additional benefits under the
Option.
8. Corporate Transactions. Notwithstanding the provisions of
Paragraph 7, if any "corporate transaction" as defined in Section 1.425-1 of the
Treasury Regulations promulgated under the Internal Revenue Code of 1986 occurs
after the date of this Agreement, and in connection with such corporate
transaction, the Corporation and another corporation enter into an agreement
providing for the issuance of substitute stock options in exchange for the
Option or the assumption of the Option, in either case giving the Director the
right to purchase the largest whole number of shares of Common Stock of the
Corporation or of any other corporation at the lowest option price permitted by
said Section 1.425-1, the Option shall be deemed to provide for the purchase of
such number of shares of
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Common Stock at such option price as shall be agreed upon by the Corporation and
such other corporation, and the term "Corporation" herein shall mean the issuer
of the stock then covered by the Option and the term "Common Stock" shall mean
such stock.
9. No Agreement for Continued Service. This Agreement does not
confer upon the Director any right to continue as a Director of the Corporation
nor does it interfere in any way with the right of the Corporation to remove the
Director, or the right of the Director to resign, at any time.
10. Restrictions. The obligation of the Corporation to sell and
deliver shares of Common Stock with respect to the Option shall be subject to
(i) all applicable laws, rules, regulations and such approvals by any
governmental agencies as may be required, including the effectiveness of a
registration statement under the Securities Act of 1933, as amended and (ii) the
condition that the shares of Common Stock to be received upon exercise of the
Option shall have been duly listed, upon official notice of issuance, on a stock
exchange (to the extent that the Common Stock of the Corporation is then listed
on any such stock exchange). The Company will include the shares to be issued
pursuant to this option in any registration it files on Form S-8 and will use
its best efforts to properly file any Additional Listing Application which may
be required for listing of the shares to be issued upon the exercise of this
option. In the event that the shares shall be delivered otherwise than in
accordance with an applicable registration statement, the Corporation's
obligation to deliver the shares is subject to the further condition that the
Director will execute and deliver to the Corporation an undertaking in
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form and substance satisfactory to the Corporation that (i) it is the Director's
intention to acquire and hold such shares for investment and not for resale or
distribution, (ii) the shares will not be sold without registration or exemption
from the requirement of registration under the Securities Act and (iii) the
Director will indemnify the Corporation for any costs, liabilities and expenses
which it may sustain by reason of any violation of the Securities Act or any
other law regulating the sale or purchase of securities occasioned by any act on
his part with respect to such shares. The Corporation may require that any
certificate or certificates evidencing shares issued pursuant to this Agreement
bear a restrictive legend intended to effect compliance with the Securities Act
or any other applicable regulatory measures, and stop transfer instructions with
respect to the certificates representing the shares may be given to the transfer
agent.
11. Exercise. Subject to the terms and conditions of this Agreement, the
Option may be exercised only by written notice delivered to the Corporation at
0000 Xxxxxx Xxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000, attention: President, of
intention to exercise such Option and by making payment of the purchase price of
such shares against delivery of a certificate or certificates therefor as
hereinafter provided. Such written notice shall:
(a) state the election to exercise the Option and the
number of shares in respect of which it is being
exercised;
(b) fix a date not less than seven (7) business days
from the date such notice is received by the
Corporation for delivery of the certificate or
certificates for said shares and the payment of the
purchase price therefor, and
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(c) be signed by the person or persons so
exercising the Option and in the event the
Option is being exercised by any person or
persons other than the Director, be
accompanied by appropriate proof of the right
of such person or persons to exercise the
Option.
On the date fixed in said written notice, a certificate or
certificates for the shares as to which the Option shall have been so
exercised, registered in the name of the person or persons so exercising the
Option, shall be issued by the Corporation and delivered to or upon the order
of such person or persons against payment in full at the above-mentioned
address of the purchase price of said shares in cash, by check or by surrender
or delivery to the Corporation of shares of the Corporation's Common Stock with
a fair market value equal to or less than the Option price, plus cash equal to
any difference. All shares issued as provided herein will be fully paid and
nonassessable. The Director shall not have any of the rights of the
stockholder with respect to the shares of Common Stock subject to the Option
until the certificate evidencing such shares shall be issued to him upon the
due exercise of the Option.
12. Availability of Shares. The Corporation shall at all times
during the term of the Option reserve and keep available such number of shares
of Common Stock as will be sufficient to satisfy the requirements of this
Agreement, shall pay all original issue taxes with respect to the issue of
shares pursuant hereto and all other fees and expenses necessarily incurred by
the Corporation in connection therewith and will from time to time use its best
efforts to comply with all laws and regulations which in the opinion of counsel
for the Corporation shall be applicable thereto.
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13. Fair Market Value. As used herein, the "fair market value" of a share
of Common Stock shall be:
(a) if the Common Stock is listed on a national
securities exchange, the closing price of the Common
Stock on the Composite Tape on the trading day
immediately preceding such given date;
(b) if the Common Stock is traded on the
over-the-counter market, the average of the bid
and the asked price for the Common Stock or, if
there is last sale reporting, the closing price
as reported by the Wall Street Journal at the
close of trading on the trading day immediately
preceding such given date, and
(c) if the Common Stock is neither listed on a national
securities exchange or traded on the over-the-
counter market, such value as the remaining
members of the Board of Directors in good faith
shall determine.
14. Governing Law. This Agreement has been entered into and
shall be construed in accordance with the substantive laws of the State of
Michigan.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed and sealed by its duly authorized officers and the Director has
hereunder set his hand, all as of the day and year first above written.
ATTEST: THE CORPORATION:
VERSUS TECHNOLOGY, INC.
_____________________________ By: _____________________________
Name: Xxxxxx Xxxxxx Name: Xxxx X. Xxxxxxx
Title: Secretary Title: President, Chief Executive
Officer and Director
WITNESS: THE DIRECTOR:
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_________________________ _______________________________
XXXXXX XXXXX
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