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Exhibit 5
STOCK OPTION AGREEMENT
BY THIS STOCK OPTION AGREEMENT ("Agreement") made and entered into this
18th day of December, 1996 ("Grant Date"), FORTE COMPUTER EASY, INC., a Utah
corporation (the "Company"), and AAP HOLDINGS, INC., a Delaware corporation (the
"Optionee"), hereby state, confirm, represent, warrant and agree as follows:
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RECITALS
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1.1 Pursuant to Section 1.1 of that certain Agreement and Plan of
Reorganization dated October 25, 1996 (the "Agreement") between the Company and
the Optionee, the Company has agreed to issue to the Optionee options to acquire
1.5 times the number of shares of the $0.01 par value common stock (the "Common
Stock") of the Company subject to outstanding options immediately prior to the
closing of the transactions contemplated by the Agreement.
1.2 By this Agreement, the Company and the Optionee desire to establish
the terms upon which the Company is willing to grant to the Optionee, and upon
which the Optionee is willing to accept from the Company, such option.
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AGREEMENTS
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2.1 GRANT OF STOCK OPTION. Subject to the terms and conditions
hereinafter set forth and to the terms and conditions applicable to the Prior
Option (as defined in Section 2.5 hereof) from time to time, the Company grants
to the Optionee the right and option (the "Option") to purchase from the Company
all or any part of an aggregate number of ONE MILLION FIVE HUNDRED THOUSAND
(1,500,000) shares of Common Stock, authorized but unissued or, at the option of
the Company, treasury stock if available (the "Optioned Shares").
2.2 EXERCISE OF OPTION. Subject to the terms and conditions of this
Agreement and those of the other documents and agreements referred to herein,
the Option may be exercised only upon written notice to the Company which sets
forth the number of Optioned Shares as to which the Option is being exercise and
the exercise price thereof.
2.3 PURCHASE PRICE. The price to be paid for the Optioned Shares (the
"Purchase Price") shall be $0.25 per share, subject to adjustment from time to
time as set forth herein.
2.4 PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price may be
made as follows:
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(a) In United States dollars in cash or by check, bank draft
or money order payable to the Company; or
(b) At the discretion of the Board of Directors of the
Company, through the delivery of shares of Common Stock with an
aggregate fair market value at the date of such delivery, equal to the
Purchase Price; or
(c) By a combination of both (a) and (b) above.
The Board of Directors of the Company shall determine acceptable methods for
tendering Common Stock as payment upon exercise of an Option and may impose such
limitations and conditions on the use of Common Stock to exercise an Option as
it deems appropriate.
2.5 EXERCISABILITY OF OPTION. Notwithstanding any provisions to the
contrary set forth herein, the Option shall be subject in all respects to the
terms and conditions applicable to the option previously granted by the Company
to Xxxxxxx XxXxxxx to purchase 1,000,000 shares of Common Stock (the "Prior
Option"), including without limitation exercise price, conditions of exercise,
forfeiture, restrictions on transferability of Common Stock received upon
exercise, and terms of expiration. A copy of the agreement between the Company
and the holder of the Prior Option, which sets forth the material terms of the
Prior Option as of the date hereof, is attached hereto as EXHIBIT A. Without
limiting the generality of the foregoing, the terms and conditions of the Option
shall be deemed to be modified to reflect and correspond to any modifications,
alterations or amendments (whether by agreement, operation of law or otherwise)
in the terms and conditions of the Prior Option from time to time. The Option
shall be exercisable, in whole or in part, only to the extent that the Prior
Option is actually exercised, and shares of Common Stock shall be issued in
respect of the exercise of the Option only to the extent that shares of Common
Stock are issued in respect of the exercise of the Prior Option. If the Prior
Option is terminated or expires in whole or in part for any reason at any time,
the Option shall be deemed to be terminated, in whole or in part, to a like
extent. The Company shall provide the Optionee with prompt written notice of any
exercise of the Prior Option and of any modifications, alterations or amendments
of the Prior Option pursuant to any agreement or document to which the Company
is a party.
2.6 TERMINATION OF OPTION. Except as otherwise provided herein, the
Option, to the extent not heretofore exercised, shall terminate upon termination
for any reason of the Prior Option.
2.7 ADJUSTMENTS. In the event of any stock split, reverse stock split,
stock dividend, combination or reclassification of shares of Common Stock or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, the number and kind of
Optioned Shares (including any Option outstanding after termination of
employment or death) and the Purchase Price per share shall be proportionately
and appropriately adjusted without any change in
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the aggregate Purchase Price to be paid therefor upon exercise of the Option,
but only to the extent that any such adjustment is made in respect of the Prior
Option. The determination by the Board of Directors of the Company as to the
terms of any of the foregoing adjustments shall be conclusive and binding.
2.8 LIQUIDATION, SALE OF ASSETS OR MERGER. In the event of a proposed
dissolution or liquidation of the Company, a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the option shall in all respects receive the
same treatment as the Prior Option in connection with such transaction as the
Prior Option.
2.9 NOTICES. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its Secretary at Forte
Computer Easy, Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, or at its then
current corporate headquarters, and to the Optionee in care of its Secretary at
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxx 00000, or at its then current corporate
headquarters. Notice shall be deemed duly given when enclosed in a properly
sealed envelope and deposited by certified mail, return receipt requested, in a
post office or branch post office regularly maintained by the United States
Government.
2.10 TRANSFERABILITY OF OPTION. The Option shall not be transferable by
the Optionee (except to any parent, subsidiary or affiliate of the Optionee).
2.11 OPTIONEE NOT A SHAREHOLDER. The Optionee shall not be deemed for
any purposes to be a shareholder of the Company with respect to any of the
Optioned Shares except to the extent that the Option herein granted shall have
been exercised with respect thereto and one or more stock certificates issued
therefor.
2.12 DISPUTES OR DISAGREEMENTS. As a condition of the granting of the
Option herein granted, the Optionee agrees, for himself and his personal
representatives, that any disputes or disagreement which may arise under or as a
result of or pursuant to this Agreement shall be determined by the Board of
Directors of the Company in its sole discretion, and that any interpretation by
the Board of Directors of the terms of this Agreement shall be final, binding
and conclusive.
2.13 MODIFICATION OF AGREEMENT. This Agreement shall not be modified or
amended except pursuant to a written document signed by both parties hereto;
PROVIDED, HOWEVER, that this Agreement shall be deemed to be amended, without
notice to or by any party or any other action on the party of any party hereto,
to reflect any modification, alteration or amendment of the terms or conditions
of the Prior Option, as set forth herein.
[signature page follows]
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IN WITNESS WHEREOF, each of the Company and the Optionee has caused
this instrument to be executed by its duly authorized officer as of the date set
forth above.
FORTE COMPUTER EASY, INC.,
a Utah corporation
By /S/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, President
"COMPANY"
AAP HOLDINGS, INC.,
a Delaware corporation
By /S/ XXXXXX XXXXXXXXXX
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Xxxxxx Xxxxxxxxxx,
Chairman of the Board
"OPTIONEE"
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Exhibit A
COMPUTER EASY INTERNATIONAL, INC.
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STOCK OPTION AGREEMENT
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QUALIFIED STOCK OPTION
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This agreement (the "Agreement") is made and entered into on May 3,
1992, (the "Grant Date"), by and between Computer Easy International, Inc., a
Utah corporation (the "Company"), and Xxxxxxx X. XxXxxxx, a key employee,
officer or Director of the Company (the "Optionee") under the terms and
conditions set forth below.
Recitals
A. The Company, through its Board of Directors (the "Board"), has
determined that, in order to attract and retain individuals of exceptional
managerial talent, upon whom the sustained progress, growth and profitability
of the Company depends, and in order to encourage these individuals to acquire
a proprietary interest in the Company and to generate an increased incentive to
contribute to the Company's future success and prosperity, the Company will
offer a compensation package that provides these individuals a chance to
participate financially in the success of the Company by acquiring an equity
interest in it.
B. As part of the compensation package, the Company has adopted a
Stock Option Plan (the "Plan") pursuant to a resolution of the Board, the terms
of which are incorporated herein by reference.
C. Shareholders of the Company have adopted and approved the Plan at a
special meeting of the Shareholders held on May 3, 1992.
D. By this Agreement, the Company and Optionee desire to establish the
terms upon which the Company is willing to grant to Optionee, and upon which
Optionee is willing to accept from the Company, an option to purchase shares of
common stock of the Company ("Common Stock").
NOW, THEREFORE, the parties hereto agree as follows:
Covenants
1. GRANT OF OPTION. The Company grants to Optionee the right and
option (the "Option") to purchase from the Company all or any part of an
aggregate number of 1,000,000 shares of Common Stock, authorized but unissued
or, at the option of the Company, treasury stock if available (the "Optioned
Shares").
2. EXERCISE OF OPTION. The Option may be exercised only by Notice (as
defined below) specifying the number of Optioned Shares
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in respect of which the Option is being exercised (the "Purchased Shares")
accompanied by payment in full of the Purchase Price.
3. PURCHASE PRICE. The price to be paid for the Purchased Shares (the
"Purchase Price") will be $0.25 per share.
4. PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price will be
made concurrent with the date of exercise of the Option (the "Exercise Date")
in United States dollars in cash or by check, bank draft or money order payable
to the Company.
5. EXERCISE OF OPTION. The Optionee may exercise the Option in
accordance with the following schedule:
0% before one (1) year after Grant Date;
25% one (1) year after Grant Date;
50% two (2) years after Grant Date;
75% three (3) years after Grant Date;
100% four (4) through six (6) years after Grant Date.
6. TERMINATION OF OPTION. Except as otherwise provided herein, the
Option, to the extent not heretofore exercised, will terminate as provided in
Section 5 of the Stock Option Plan, which section is incorporated herein by
this reference. In no event will an Option be exercisable for a period longer
than ten (10) years from the date such Option is granted.
7. ADJUSTMENTS. In the event of any merger, consolidation, stock
dividend, split-up, combination or exchange of shares, or recapitalization or
change in capitalization, the number and kind of Optioned Shares and the
Purchase Price will be proportionately and appropriately adjusted to maintain
pro-rata equity ownership without any change in the aggregate purchase price to
be paid therefor upon exercise of the Option.
8. ACQUISITION. In any person, corporation or other entity or group
thereof (the "Acquiror") directly or indirectly makes an acquisition (an
"Acquisition"), other than by merger or consolidation or purchase from the
Company, of the beneficial ownership (as that terms is used in Section 13(d)(1)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder) of shares of Common Stock which, when added
to any other shares the beneficial ownership of which is held by the Acquiror,
will be more than 20% of the votes that are entitled to be cast at meetings of
stockholders, any Options which by their terms were not exercisable in full
prior to the date of the Acquisition will become immediately exercisable for a
period of 180 days from the date of the Acquisition or 180 days from the date
the Acquiror terminates the Option, whichever is later, and any Optionee may
elect, during the period commencing on the date of the Acquisition and ending
at the close of business on the 180th day referred to in this paragraph, to
exercise any Options in whole or in part. In the event the 180th day referred
to in this paragraph will fall on a day that is not a business day,
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then the 180th day will be deemed to be the next following business day. If not
exercised by the close of business on the 180th day, the exercise terms of the
Options will remain as is.
9. NOTICE. Any notice to be given under the terms of the Agreement
("Notice") will be addressed to the Company at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx,
Xxxxxxx 00000, or at its then current corporate headquarters. Notice to be
given to the Optionee will be addressed to him or her at his or her then
current residential address as appearing on the Company's records. Notice will
be deemed duly given when enclosed in a properly sealed envelope and deposited
by certified mail, return receipt requested, postage prepaid, in a post office
or branch post office regularly maintained by the United States Government.
10. BINDING EFFECT. This Agreement will be binding upon and inure to
the benefit of any successor or successors of the Company.
11. TRANSFERABILITY OF OPTION. This Option will not be transferable by
Optionee except by will or the laws of descent and distribution and, during the
life of Optionee, may be exercised only by Optionee.
12. OPTIONEE NOT A SHAREHOLDER. Optionee will not be deemed for any
purpose to be a shareholder of the Company with respect to any of the Optioned
Shares except to the extent that the Option herein granted will have been
exercised with respect thereto and a stock certificate issued therefor.
13. RIGHT TO CONTINUED EMPLOYMENT. The grant of the Option to Optionee
will not be construed as giving the Optionee the right to be retained in the
employ of the Company, and Company expressly reserves the right to dismiss
Optionee at any time, with or without cause. Except as may otherwise be
provided in a written employment agreement (if any) between Company and
Optionee.
14. SPECIFIC PERFORMANCE. Both parties agree that irreparable damage
would result if this Agreement is not specifically enforced. Therefore, the
rights and obligations set forth herein will be enforceable in a court of
equity by a decree of specific performance and appropriate injunction relief
may be applied for and granted in connection herewith. Such remedies will,
however, be cumulative and not exclusive and will be in addition to any other
remedies which any party may have under this Agreement or otherwise.
15. NOTIFICATION OF COMPANY. Any Optionee who disposes of shares of
Common Stock acquired on the exercise of an Incentive Stock Option by sale or
exchange either: (a) within two (2) years after the date hereof; or (b) within
one (1) year after the acquisition of such shares of Common Stock, will notify
the Company of such disposition and of the amount realized upon such
disposition.
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IN WITNESS WHEREOF, the Company ha caused this instrument to be
executed by its duly authorized officer, and Optionee has hereunto affixed his
signature.
Dated: May 3, 1992.
"Company"
Computer Easy International, Inc.
a Utah corporation
By /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Vice President
"Optionee"
/s/ Xxxxxxx XxXxxxx
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