Exhibit 10.67
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made as of October 1, 2004,
by The UniMark Group, Inc., a Texas corporation ("UniMark" or the "Company"),
and Jakes Jordaan ("Option Holder").
R E C I T A L S
In consideration of the premises and the mutual promises herein made, and
in consideration of the covenants herein contained, the parties hereto agree as
follows:
1. Grant of Option. UniMark grant to the Option Holder an option (the
"Option") to purchase up to 2,104,182 shares (the "Underlying Shares") of the
Company's common stock, par value $.01 per share ("Common Stock"), at an
exercise price per share of $.40 (the "Initial Option Price"). The Option shall
be effective as of October 1, 2004 (the "Effective Date").
2. Vesting.
(a) Formula Vesting. The Option shall only be exercisable based
upon the Aggregate Cash Distribution Amount (as defined below)
to holders of the Company's equity securities in accordance
with the formula:
Vested Number of Underlying Shares = 2,104,182 x (Aggregate
Cash Distribution Amount/Unrecovered Capital)
"Aggregate Cash Distribution Amount" shall mean the aggregate
dollar amount of (a) any cash dividends or distribution to
holders outstanding shares of Common Stock, (b) any cash used
by the Company or its subsidiaries to repurchase shares of
Common Stock, and (c) any payments by the Company or its
subsidiaries made to persons or entities owning beneficially
more than 10 percent of the Company's outstanding shares of
Common Stock less (d) amounts (other than salary paid and
normal and customary employee benefits) paid to Option Holder
by the Company or its subsidiaries.
"Unrecovered Capital" shall mean $8,417,932 reduced by amounts
under (a), (b) and (c) under the definition of Aggregate Cash
Distribution Amount as and when paid or expended and increased
by eight percent (8%) per annum compounded quarterly
commencing July 1, 2004.
The number of shares of Common Stock for which the Option may
be exercised shall be cumulative, so that once the Option
shall become exercisable with respect to any shares of Common
Stock it shall continue to be exercisable for such shares
until expiration of termination of the Option.
Notwithstanding, no portion of the Underlying Shares subject
to the Option shall vest after July 1, 2008, in accordance
with the formula under this Section 2(a).
(b) Other Vesting. Any Underlying Shares subject to the Option
which have not vested on July 1, 2008, shall thereafter vest
immediately and the Option for such Underlying Shares shall be
exercisable at the Initial Option Price without any reduction
thereof under Section 3(a).
3. Adjustments.
(a) Adjustment for Cash Dividends. If at any time UniMark declares
a cash dividend or make any other distribution on its
outstanding shares of Common Stock, then the Initial Option
Price with respect to any Underlying Shares for
which vesting has occurred pursuant to Section 2(a) shall be
reduced by the per share amount received by holders of the
Common Stock. Notwithstanding the foregoing, the Initial
Option price shall be not less than $.01 per share or the par
value of Common Stock if less than $.01.
(b) Adjustment by Stock Split, Stock Dividend, Etc. If at any time
UniMark increases or decreases the number of its outstanding
shares of Common Stock, or changes in any way the rights and
privileges of such shares, by means of the payment of a stock
dividend or the making of any other distribution on such
shares payable in shares of Common Stock, or through a stock
split or subdivision of shares, or a consolidation or
combination of shares, or through a reclassification or
recapitalization involving the stock, or other change
affecting the outstanding Common Stock without the Company's
receipt of consideration, then appropriate adjustments shall
be made to (i) the total amount and/or class of securities
subject to this Option and (ii) the Initial Option Price in
order to reflect such change and thereby preclude a dilution
or enlargement of benefits hereunder.
(c) Adjustments for Redemptions. The Underlying Shares represent
ten percent (10%) of the issued and outstanding Common Stock
of the Company ("Percentage Amount"). In the event the Company
redeems, or its subsidiaries acquire, any of the issued and
outstanding Common Stock for cash or other valuable
consideration, the number of Underlying Shares shall be
reduced so that it represents the Percentage Amount of the
Common Stock issued and outstanding following any such
transaction.
4. Change of Control. Upon (i) any transaction or series of related
transactions (including, without limitation, any reorganization, merger, or
consolidation) that will result in the holders of the outstanding voting equity
securities of UniMark immediately prior to such transaction holding less than a
majority of the voting equity securities of the surviving entity immediately
following such a transaction (a "Merger"), (ii) the sale or transfer of all or
substantially all of the assets of UniMark (an "Asset Sale"), (iii) the
dissolution or liquidation of UniMark, then immediately prior to the effective
date of such event, this Option shall be accelerated so that the Option Holder
may exercise the Option (whether or not then vested) for all the shares of
Common Stock subject to the Option as fully vested shares.
5. Expiration and Termination of the Option. The Option shall expire
ten (10) years from the Effective Date (the period from the Effective Date to
the expiration date is the "Option Period") or prior to such time as follows:
(a) If the employment of the Option Holder is terminated within
the Option Period for any reason other than Disability or
death, the Option may be exercised by the Option Holder within
three (3) months following the date of such termination
(provided that such exercise must occur within the Option
Period), but not thereafter. In any such case, the Option may
be exercised only as to the vested shares of Stock as to which
the Option had become exercisable on or before the date of the
Option Holder's termination of employment.
(b) If the Option Holder dies within the Option Period, while
employed by UniMark, the Option may be exercised by those
entitled to do so under his will or by the laws of descent and
distribution within one (1) year following his or her death
(provided that such exercise must occur within the Option
Period), but not thereafter. In any such case, the Option may
be exercised only as to the vested shares of Stock as to which
the Option had become exercisable on or before the date of the
Option Holder's death.
(c) If the Option Holder becomes disabled within the Option
Period, while employed by UniMark, the Option may be exercised
within one (1) year
following his termination of employment because of disability
(provided that such exercise must occur within the Option
Period), but not thereafter. In any such case, the Option may
be exercised only as to the vested shares of Stock as to which
the Option had become exercisable on or before the date of the
Option Holder's termination of employment because of
disability.
6. Exercise of Option.
(a) Payment. Subject to compliance with the terms and conditions
of this Agreement and applicable securities laws, this Option
may be exercised, in whole or in part at any time or from time
to time, during the Option Period by the delivery of notice of
such exercise specifying the number of shares of Common Stock
being acquired, at the principal office of the Company,
together with payment, (i) in cash (by check) or by wire
transfer, (ii) by cancellation of any outstanding debt and/or
accrued interest owing by the Company to the Option Holder,
(iii) by exchange of the Company's securities held by the
Option Holder, at the fair market vale thereof, or (iv) by a
combination of (i), (ii) and (iii), of an amount equal to the
product obtained by multiplying the number of shares of Common
Stock being purchased upon such exercise by the then effective
Initial Option.
(b) Net Issue Exercise. In lieu of the payment methods set forth
in Section 6(a) above, the Option Holder may elect to exchange
all or some of this Option for shares of Common Stock equal to
the value of this Option being exchanged on the date of
exchange. If the Option Holder elects to exchange this Option
as provided in this Section 6(b), the Option Holder shall
tender to the Company in the notice of exercise so much of the
Option for the amount being exchanged, along with written
notice of the Option Holder's election to exchange some or all
of the Option, and the Company shall issue to the Option
Holder the number of shares of Common Stock computed using the
following formula:
X = Y(A-B)
------
A
Where X = the number of shares of Common Stock to be issued to
the Option Holder.
Y = the number of shares of Common Stock purchasable under the
amount of the Option being exchanged (as adjusted to the date
of such calculation).
A = the fair market value of one share of Common Stock.
B = the then effective Initial Option Price.
All references to an "exercise" of the Option shall include an
exchange pursuant to this Section 6.6(b).
7. Transferability. Option Holder may assign or transfer the Option his
family limited partnership and/or trust created for the benefit of his children.
The Option may be transferred by will or pursuant to the laws of descent and
shall be exercisable during the Option Holder's life only by the Option Holder,
or in the event of Disability or incapacity, by the Option Holder's guardian or
legal representative, and after the Option Holder's death, only by those
entitled to do so under the Option Holder's will or the applicable laws of
descent and distribution.
8. Condition to Exercise. As a condition to the exercise of all or any
portion of the Option, the Option Holder shall enter into an agreement with
Cardinal UniMark Investors, L.P., a Delaware limited
partnership ("CUI"), containing usual and customary terms and conditions which
are commercially reasonable and under which:
(a) CUI shall be entitled to vote any shares of Common Stock
acquired upon the exercise of the Option with respect to a
transaction involving the Company requiring common shareholder
approval;
(b) CUI may cause the Option Holder to transfer or dispose of any
shares of Common Stock acquired upon exercise of the Option on
the same terms and conditions and for the same consideration
as CUI transfers all of its shares of Common Stock;
(c) CUI may require the Option Holder to waive any appraisal or
similar rights with respect to transactions described in (a)
or (b) above and execute such further agreements as may be
required to consummate such transactions.
CUI shall be a third-party beneficiary of the provisions of this
Section 8 and the Company shall not issue any shares of Common Stock to
the Option Holder pursuant to this Agreement unless and until it has been
notified in writing by CUI that the Option Holder and CUI have entered
into the agreement contemplated herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
THE UNIMARK GROUP, INC.
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Its Chairman
OPTION HOLDER:
/s/ Jakes Jordaan
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Jakes Jordaan
NOTICE OF ASSIGNMENT
Pursuant to Section 7 of that certain Stock Option Agreement dated as of
October 1, 2004, by The UniMark Group, Inc. and Jakes Jordaan (the "Option
Agreement"), notice is hereby given that Jakes Jordaan has assigned and
transferred the Option (as defined in Option Agreement), effective as of
December 4, 2004, to his family's limited partnership: S4J2 Family Limited
Partners, L.L.P., a Texas limited liability partnership.
/s/ Jakes Jordaan
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Jakes Jordaan
