Exhibit 4.3
XXX TECHNOLOGIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Option Agreement"), dated as of
the 10th day of August, 2000, is by and between Xxx Technologies, Inc., an
Arizona corporation (the "Company"), and the undersigned (the "Optionee"):
WHEREAS, the Optionee is a member of the Company's Executive Management
Committee (the "Executive Management Committee"); and
WHEREAS, the Board of Directors of the Company (the "Board") and the
Company's Compensation Committee (the "Compensation Committee") have determined
that it is in the best interest of the Company to grant members of the Executive
Management Committee certain stock options;
NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, the parties hereto hereby mutually covenant, contract and
agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee an option to
purchase a total of 1,000,000 shares of Common Stock of the Company (the
"Shares") at an exercise price of $0.59375 per share (the "Option"). The Option
is not intended to be an incentive stock option described in section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and this Option
Agreement shall be construed to implement that intent.
2. VESTING OF OPTION.
(a) Subject to such limitations and restrictions as are provided in
this Option Agreement, the Option shall vest and become exercisable on
August 10, 2005. Notwithstanding the foregoing, the Option shall earlier
vest and become exercisable as follows:
(i) The Option shall become exercisable for 200,000 of the Shares
on the first date on which the Company's income before interest,
taxes, depreciation and dividends (and excluding any capital
investment into FreshTag or any other business operation not in
existence as of the date of this Option Agreement) ("Net Income")
meets or exceeds $1,000,000, as determined by the Board of Directors,
beginning with the Company's fiscal year ending April 30, 2001;
(ii) The Option shall become exercisable for an additional
200,000 of the Shares on the first date on which the Company's Net
Income meets or exceeds $2,000,000, as determined by the Board of
Directors, beginning with the Company's fiscal year ending April 30,
2001;
(iii) The Option shall become exercisable for an additional
200,000 of the Shares on the first date on which the Company's Net
Income meets or exceeds $3,000,000, as determined by the Board of
Directors, beginning with the Company's fiscal year ending April 30,
2001;
(iv) The Option shall become exercisable for an additional
200,000 of the Shares on the first date on which the Company's Net
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Income meets or exceeds $4,000,000, as determined by the Board of
Directors, beginning with the Company's fiscal year ending April 30,
2001; and
(v) The Option shall become exercisable for an additional 200,000
of the Shares on the first date on which the Company's Net Income
meets or exceeds $5,000,000, as determined by the Board of Directors,
beginning with the Company's fiscal year ending April 30, 2001.
There is no requirement that the Optionee be providing consulting services
to the Company or employed by the Company on any date in order for any of
the Shares to vest and become exercisable on such date.
(b) Notwithstanding Section 2(a), any Shares that have not yet become
vested as of a Change of Control shall immediately vest as of the date on
which such Change of Control occurs.
(c) "Change of Control" means the occurrence of any of the following
events:
(i) The acquisition by a Group of Beneficial Ownership of 50% or
more of the Common Stock or the Voting Power of the Company, but
excluding for this purpose: (A) any acquisition by the Company or an
employee benefit plan of the Company; or (B) any acquisition of then
outstanding Common Stock by management employees of the Company. For
purposes of this Option Agreement, "Group" means any individual,
entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Act"),
"Beneficial Ownership" has the meaning in Rule 13d-3 promulgated under
the Act, and "Voting Power" means the combined voting power of the
outstanding voting securities entitled to vote generally in the
election of directors.
(ii) Individuals who constitute the Board on the date immediately
after the date of this Option Agreement (the "Incumbent Board") cease
to constitute at least a majority of the Board, provided that any
director whose nomination was approved by a majority of the Incumbent
Board shall be considered a member of the Incumbent Board unless such
individual's initial assumption of office is in connection with an
actual or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Act).
(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, in which the
owners of more than 50% of the Common Stock or Voting Power of the
Company do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than 50%
of the Common Stock or Voting Power of the corporation resulting from
such reorganization, merger or consolidation.
(iv) A complete liquidation or dissolution of the Company or of
its sale or other disposition of all or substantially all of the
Company's assets.
3. EXPIRATION DATE. The Optionee's rights under this Option Agreement shall
expire on August 10, 2010.
4. EXERCISE UPON DEATH. The Option of an Optionee who dies before the
Option has been exercised, as to all vested Shares, may be exercised until the
expiration date of the Option by the Optionee's estate or by the person who
acquired the right to exercise the Option by bequest or inheritance by reason of
the death of the Optionee.
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5. METHOD OF EXERCISE. The Option shall be exercised by the tender of cash
or by delivery of shares of Common Stock already owned by Optionee or a
combination of cash or such shares of Common Stock, or through such other means
that the Company determines are acceptable, and delivery to the Company at its
principal place of business of a written notice of exercise, at least five (5)
days prior to the date of exercise. Payment may also be made by delivering to
the Company a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company, from the sale or
loan proceeds with respect to the sale of Common Stock or a loan secured by
Common Stock, the amount necessary to pay the exercise price. The written notice
must:
(a) State the election to exercise the Option, the number of whole
Shares with respect to which the Option is being exercised (which may not
be less than ten thousand (10,000) Shares, unless the number being
exercised is the balance of the number of Shares that may be exercised
under the Option), the method of exercise elected by the Optionee, and the
name, address, and social security number of the person in whose name the
stock certificate for such Shares is to be registered;
(b) be signed by the person entitled to exercise the Option, and if
the Option is being exercised by any person or persons other than the
Optionee, be accompanied by proof, satisfactory to the Company, of the
right of such person or persons to exercise the Option; and
(c) be delivered by hand or by registered or certified mail, postage
pre-paid, return receipt requested, to the Company's principal place of or
to such other location as may be specified in writing by the Company from
time to time.
Within ten (10) days after the Company receives such notice in a form
satisfactory to the Company and the acceptance of payment, the Company shall
deliver to the Optionee a certificate representing the Shares purchased
hereunder. Notwithstanding the foregoing, the Company may delay delivery of the
certificate for Shares purchased hereunder until (i) the admission of such
shares to listing on any stock exchange on which the shares may then be listed,
(ii) receipt of any required representation by you or completion of any
registration or other qualification of such shares under any state or federal
law or regulation that the Company's counsel shall determine as necessary or
advisable, or (iii) receipt by the Company of advice by counsel that all
applicable legal requirements have been complied with and that delivery of the
certificate will not adversely affect the federal or state income tax treatment
of the Company. As a condition of exercising the Option, you may be required to
execute a customary written indication of your investment intent and such other
agreements as the Company deems necessary or appropriate to comply with any
applicable laws or regulations.
6. OTHER RESTRICTIONS. The Optionee shall not be entitled to the privileges
of stock ownership of any Shares subject to the Option until payment therefor
has been made in full as provided in the Option. An Option may be exercised and
certificates for Shares may be delivered hereunder only in compliance with all
applicable federal and state laws and regulations. Any Share certificate issued
to evidence Shares for which the Option is exercised may bear legends and
statements the Company deems advisable to assure compliance with federal and
state laws and regulations and this Option Agreement.
7. WITHHOLDING. Optionee agrees to pay, or make arrangements satisfactory
to the Company regarding payment of applicable withholding taxes on the exercise
of the Option.
8. BINDING EFFECT. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.
9. APPLICABLE LAW. This Option Agreement shall be construed under and the
relationship between the parties determined in accordance with the laws of the
State of North Carolina applicable to contracts made and to be performed in the
State of North Carolina, without reference to the laws of any other state
through any principles concerning choice or conflict of laws.
10. CONSTRUCTION. The unenforceability or invalidity of any provision of
this Option Agreement shall not affect the enforceability or validity of any
other provision. The parties may sign separate copies of this Option Agreement
which, taken together, will be deemed to constitute a valid agreement. This
Option Agreement may be signed in counterparts, each of which will be deemed an
original and all of which will constitute one and the same agreement. This
Option Agreement sets forth the entire understanding of the parties with respect
to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement
effective as of the day and year first above written.
XXX TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Chief Operating Officer
OPTIONEE:
/s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
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