EXHIBIT 10.8
STOCK OPTION AGREEMENT
AGREEMENT dated as of , 1999 between XXXXXXX XXXXXX,
residing at 000 00xx Xxxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000 (the "Employee" or
"Grantee") and X0XXXXXXX.XXX INC., a Delaware corporation having its principal
office at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Company").
WHEREAS, on August 15, 1999, the Board of Directors of the
Company authorized the employment of the Employee pursuant to the terms of an
Employment Agreement ("Employment Agreement"), and the grant, on the Effective
Date (as defined in the Employment Agreement), to the Employee an option to
purchase an aggregate of 175,000 of the authorized but unissued shares of the
Common Stock of the Company, $.01 par value ("Common Stock"), on the terms and
conditions set forth in this Agreement; and
WHEREAS, the Employee desires to acquire said option on the
terms and conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Option. The Company hereby grants to the Employee
the right and option to purchase all or any part of an aggregate of 175,000
shares of Common Stock at any time from the date of vesting through , 2009
("Exercise Period"), on and subject to the terms and conditions set forth herein
("Option"). The Option is a non-qualified stock option not intended to qualify
under any section of the Internal Revenue Code of 1986, as amended, and is not
granted under any plan.
2. Exercise Price. The purchase price of each share of Common
Stock subject to the Option ("Option Shares") shall be $ .
3. Vesting and Exercisability.
(a) Options to purchase 50,000 shares vest on the
date hereof. Options to purchase an additional 62,500 shares, 31,250 shares and
31,250 shares, respectively, will vest on each of the first three anniversaries
of the Start Date (as defined in the Employment Agreement").
(b) If the Employee's employment with the Company
terminates for any reason prior to the time that the Option has been fully
exercised, the unexercised portion of the Option on the date of termination of
employment (whether exercisable or not) shall immediately expire; provided,
however, that (i) if the Employee's employment is terminated by reason of the
Employee's disability (pursuant to Section 3.3 of the Employment Agreement), all
portions of the Option that are vested at the time of termination shall remain
exercisable for a period of one year from the date of such termination or until
the expiration of the Exercise Period, whichever is shorter; (ii) in the event
of the death of the Employee while in the employ of the Company, all portions of
the Option that are vested at the time of death shall remain exercisable by the
legal representative of the estate or by the legatee of the Employee under the
will of the Employee for a period of one year from the date of such death or
until the expiration of the Exercise Period, whichever is shorter; and (iii) in
the event the Employee is terminated without "Cause" (as defined in the
Employment Agreement), or Executive terminates his employment for "Good Reason"
(as defined in the Employment Agreement), then the Option shall become fully
vested and exercisable and may be exercised for a period of five years from the
date of such termination of employment or until the expiration of the Exercise
Period, whichever is shorter.
(c) The Board of Directors may, in the event the
Executive's employment is terminated for Cause (as provided for in the
Employment Agreement), annul the Option and, in such event, may require the
Executive to return to the Company the economic benefit of any Option Shares
purchased hereunder by the Executive within the six month period prior to the
date of termination. In such event, the Executive hereby agrees to remit to the
Company, in cash, an amount equal to the difference between the fair market
value of the Option Shares on the date of termination (or the sales price of
such Shares if the Option Shares were sold during such six month period) and the
exercise price of such Shares.
4. Rights as a Stockholder. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option.
5. Dividends, Mergers, Etc.
(a) In the event of a stock split or exchange, stock
dividend, combination of shares, or any other similar change in the Common Stock
of the Company as a whole ("Stock Event"), the Board of Directors of the Company
shall make equitable, proportionate adjustments in the number and kind of shares
covered by the Option and in the option price thereunder, as it deems necessary
in order to preserve the Employee's proportionate interest in the Company and to
maintain the aggregate option price.
(b) Upon the dissolution or liquidation of the Company, or
upon the consummation of any merger, consolidation or other form of
reorganization in which the Company is not the survivor, or upon the sale of all
or substantially all of the Company's assets (the date of any such event being
referred to herein as the "Transaction Date"), then the Option shall terminate
at the close of business on the Transaction Date; provided, however, that any of
the Option Shares not vested and exercisable on the Transaction Date shall
become immediately vested and exercisable by Employee on the date immediately
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preceding the Transaction Date and Employee shall have the right to purchase all
the Option Shares as of said date on the terms set forth in this Agreement by
irrevocable written notice delivered to the Company.
6. Transferability of Option and Option Shares.
(a) The Option shall not be assignable or
transferable except in the event of the death of the Employee, by will or by the
laws of descent and distribution. No transfer of the Option by the Employee by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of the will and such other evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.
(b) The Employee hereby represents and warrants to
the Company that he is acquiring the Option for his own account and not with a
view to the distribution thereof.
(c) The Employee hereby agrees that he shall not
sell, transfer by any means or otherwise dispose of the Option Shares acquired
by him without registration under the Securities Act of 1933 ("Act"), or in the
event that they are not so registered, unless (i) an exemption from the Act is
available thereunder, and (ii) the Employee has furnished the Company with
notice of such proposed transfer and the Company's legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so exempt.
7. Registration Rights. The Company hereby grants to Employee
the right to have the Option Shares registered on the first registration
statement on Form S-8 filed by the Company during the period in which Employee
is employed by the Company or by any subsidiary thereof and the Company shall
take such action with respect to such Form S-8 as may be necessary so that, upon
exercise, the shares of Common Stock issued thereby will be freely transferrable
(subject only to applicable volume limitations contained in Rule 144 under the
Securities Act of 1933). Notwithstanding the foregoing, (i) the Company shall
have no obligation hereunder in connection with any such registration statement
unless the Option Shares can legally be registered thereby and the Employee
provides to the Company information with respect to his ownership of Option
Shares, manner of proposed disposition and such other matters as the Company
shall reasonably request for disclosure in the registration statement or any
amendment thereto; and (ii) the Company will not be obligated to prepare, file
or print any "reoffer prospectus" in connection with any "control securities" or
"restricted securities" as those terms are defined in General Instruction C to
Form S-8. The Company shall bear all fees, costs and expenses incurred by it in
connection with the filing with the Securities and Exchange Commission of such
registration statement.
8. Employee's Acknowledgments. The Employee hereby
acknowledges that:
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(a) All reports and documents required to be filed by
the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 within the last 12 months have been made
available to the Employee for his inspection.
(b) If he exercises the Option, he may have to bear
the economic risk of the investment in the Option Shares for an indefinite
period of time because the Option Shares may not have been registered under the
Act and cannot be sold by him unless they are registered under the Act or an
exemption therefrom is available thereunder.
(c) In his position with the Company, he has had both
the opportunity to ask questions of and receive answers from the officers and
directors of the Company and all persons acting on its behalf concerning the
terms and conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such information
or can acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to subparagraph (a) above.
(d) The Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence of
registration under the Act or an exemption therefrom.
(e) In the absence of registration under the Act, the
certificates evidencing the Option Shares shall bear the following legend:
"The Shares represented by this certificate have been acquired
for investment and have not been registered under the
Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
9. Exercise of Option.
(a) Subject to the terms and conditions of the
Agreement, the Option may be exercised by written notice to the Company at its
principal place of business. Such notice shall state the election to exercise
the Option and the number of Option Shares in respect to which it is being
exercised, and, if the Option Shares are not then registered for resale under
the Act, such notice shall contain a representation and agreement by the person
or persons so exercising the Option that the Option Shares are being purchased
for investment and not with a view to the distribution or resale thereof. Such
notice shall be accompanied by payment of the full purchase price of the Option
Shares.
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(b) Payment of the purchase price shall be made in
cash or by check, bank draft or money order payable to the order of the Company.
(c) The Company shall issue a certificate or
certificates evidencing the Option Shares as soon as practicable after the
notice and payment is received. The certificate or certificates evidencing the
Option Shares shall be registered in the name of the person or persons so
exercising the Option.
(d) The Company hereby represents and warrants to the
Employee that the Option Shares, when issued and delivered by the Company to the
Employee in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Withholding Taxes. Not later than the date as of which an
amount first becomes includible in the gross income of Employee for Federal
income tax purposes with respect to the Option, Employee shall pay to the
Company, or make arrangements satisfactory to the Company regarding the payment
of, any Federal, state and local taxes of any kind required by law to be
withheld or paid with respect to such amount. The obligations of the Company
pursuant to this Agreement shall be conditional upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Employee from the Company. Any required withholding tax
shall be paid in accordance with Section 9(b) above.
11. Miscellaneous.
(a) In the event that, after the term of his
employment with the Company, Employee engages in activities that violate the
prohibitions set forth in Section 5.4 of the Employment Agreement (even if such
provisions are deemed to be unenforceable by a court of law), Employee shall be
obligated to return to the Company the economic benefit of any award which was
realized or obtained by him at any time during the period beginning on that date
which is six months prior to the date of such termination of employment.
(b) All notices provided for in this Agreement shall
be in writing, and shall be deemed to have been duly given when delivered
personally to the party to receive the same, when transmitted by electronic
means, or when mailed first class postage prepaid, by certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address set forth below, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 12. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
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If to Employee:
Xxxxxxx Xxxxxx
000 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
If to the Company:
x0xxxxxxx.xxx Inc.
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Chairman of the Board
(c) This Agreement and the Employment Agreement and
other Stock Option Agreement executed simultaneously herewith set forth the
entire agreement of the parties relating to the employment of Employee and are
intended to supersede all prior negotiations, understandings and agreements. No
provisions of this Agreement or the other Stock Option Agreement or Employment
Agreement may be waived or changed except by a writing by the party against whom
such waiver or change is sought to be enforced. The failure of any party to
require performance of any provision hereof or thereof shall in no manner affect
the right at a later time to enforce such provision.
(d) This Agreement shall be governed by and construed
under the law of the State of New York, disregarding any principles of conflicts
of law that would otherwise provide for the application of the substantive law
of another jurisdiction. Each of the parties (i) agrees that any legal suit,
action or proceeding arising out of or relating to this Agreement shall be
instituted exclusively in New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York, (ii)
waives any objection to the venue of any such suit, action or proceeding and the
right to assert that such forum is not a convenient forum, and (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding. Each of the parties further agrees to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the New York State Supreme Court, County of
New York, or in the United States District Court for the Southern District of
New York and agrees that service of process upon it mailed by certified mail to
its address shall be deemed in every respect effective service of process upon
it in any such suit, action or proceeding.
(e) This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the Company. This Agreement shall
not be assignable by Employee, but shall inure to the benefit of and be binding
upon Employee's heirs and legal representatives.
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(f) Should any provision of this Agreement become
legally unenforceable, no other provision of this Agreement shall be affected,
and this Agreement shall continue as if the Agreement had been executed absent
the unenforceable provision.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
X0XXXXXXX.XXX INC.
By:
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Woo Xxx Xxx, Chief Executive Officer
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XXXXXXX XXXXXX
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