EXHIBIT 10.12
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is entered into
as of December 2, 2002, by and between Advantage Marketing Systems, an Oklahoma
corporation ("Corporation"), and Xxxxx X'Xxxxxxxxx ("Optionee").
WHEREAS, Optionee is a key management employee of the Corporation, and
it is important to the Corporation that Optionee be encouraged to remain in the
employ of the Corporation; and
WHEREAS, in recognition of such facts, the Corporation desires to
provide to Optionee an opportunity to purchase shares of the common stock of the
Corporation, as hereinafter provided, pursuant to the "Advantage Marketing
Systems, Inc. 1995 Stock Option Plan" (the "Plan"), a copy of which has been
provided to Optionee.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for good and valuable consideration, Optionee and the Corporation
hereby agree as follows:
A G R E E M E N T
1. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the
context otherwise clearly requires, terms with initial capital
letters used herein shall have the meanings assigned to such terms
in the Plan.
2. GRANT OF OPTIONS. The Corporation hereby grants to Optionee,
non-qualified options ("Options") to purchase all or any part of
Two Hundred Thousand (200,000) shares of Stock, upon the terms and
conditions set forth herein.
3. OPTION PERIOD. The Options shall vest and first become exercisable
immediately (subject to the provisions of Section 7)
All Options shall expire on the date five years after the date of
grant, unless earlier terminated pursuant to Section 7.
4. METHOD OF EXERCISE. The Options shall be exercisable by Optionee by
giving written notice to the Chief Financial Officer of the
Corporation of the election to purchase and of the number of shares
of Stock Optionee elects to purchase, such notice to be accompanied
by such other executed instruments or documents as may be required
by the Committee pursuant to this Agreement, and unless otherwise
directed by the Committee, Optionee shall at the time of such
exercise tender the purchase price of the shares of Stock he has
elected to purchase. The Optionee may purchase less than the total
number of shares of Stock for which the Option is exercisable,
provided that a partial exercise of an Option may not be for less
than One Hundred (100) shares of Stock. If Optionee shall not
purchase all of the shares of Stock which he is entitled to
purchase under the Options, his right to purchase the remaining
vested and unpurchased shares of Stock shall continue until
expiration of the Options. The Options shall be exercisable with
respect to whole shares of Stock only, and fractional interests
shall be disregarded.
5. AMOUNT OF PURCHASE PRICE. The purchase price per share of Stock for
which Optionee is entitled to purchase under the Options shall be
$1.40 per share of Stock.
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6. PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice of
exercise of the Options, Optionee shall tender by check payable to
the Corporation, or by assignment of Stock to the Corporation, the
purchase price for all shares of Stock then being purchased. No
loan or advance shall be made by the Corporation for the purpose of
financing, in whole or in part, the purchase of Stock. In the event
that Stock is utilized as consideration for the purchase of Stock
upon the exercise of the Options, then, such Stock shall be valued
at the "Fair Market Value" as defined in the Plan.
In addition to the foregoing procedure which may be available for
the exercise of the Options, Optionee may deliver to the Corporation a
notice of exercise including an irrevocable instruction to the
Corporation to deliver the stock certificate issued in the name of
Optionee representing the shares subject to the Option to a broker
authorized to trade in the Stock of the Corporation. Upon receipt of
such notice, the Corporation will acknowledge receipt of the executed
notice of exercise and forward this notice to the broker. Upon receipt
of a copy of the notice which has been acknowledged by the Corporation,
and without waiting for issuance of the actual stock certificate with
respect to the exercise of the Options, the broker may sell the Stock
or any portion thereof. Upon receipt of the notice of exercise from the
Corporation, the broker will deliver directly to the Corporation a
portion of the sales proceeds to cover the purchase price for the Stock
issued upon exercise of the Option, and any withholding or transfer
taxes. Upon receipt of such sales proceeds and withholding or transfer
taxes, the Corporation will issue a stock certificate representing the
shares of Stock sold by the broker. For all purposes effecting the
exercise of the Options, the date on which Optionee gives a notice of
exercise to the Corporation will be the date Optionee becomes bound
contractually to take and pay for the shares of Stock underlying the
Options.
7. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. The
Option is exercisable only by the Optionee while he is actively
employed as an employee, an independent contractor or a consultant
of the Corporation or a subsidiary, except that:
- the Option, if otherwise exercisable, may be exercised by the
personal representative of a deceased Optionee within twelve
months after the death of such Optionee (but not beyond the
term of the Option);
- if the Optionee terminates his employment as an employee, his
independent contractor arrangement or consulting arrangement
with the Corporation or a subsidiary on account of Retirement,
the Optionee may exercise that portion of the Option which is
otherwise exercisable at any time within three months of such
date of termination;
- if the Optionee terminates his employment as an employee, his
independent contractor arrangement or consulting arrangement
with the Corporation or a subsidiary on account of incurring a
Disability, the Optionee may exercise that portion of the
Option which is otherwise exercisable at any time within twelve
months of such date of termination; and
- if the Optionee should die during the applicable three-month or
twelve-month period following the date of the Optionee's
Retirement or termination on account of Disability, the rights
of the personal representative of the Optionee as such relate
to the Option granted to the deceased Optionee shall be
governed in accordance with the first bullet point above.
8. NON-TRANSFERABILITY OF OPTIONS. The Options shall not be
transferable, either voluntarily or by operation of law, otherwise
than by will or the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by Optionee.
9. NO RIGHTS TO CONTINUED EMPLOYMENT OR RELATIONSHIP. Optionee
acknowledges that his employment relationship with the Corporation
is on an "at-will" basis. Nothing in this Agreement shall be deemed
to alter the "at-will" character of Optionee's relationship with
the Corporation. Nothing contained in this Agreement shall
otherwise obligate the Corporation to employ or have another
relationship with Optionee for any period or interfere
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in any way with the right of the Corporation to reduce Optionee's
compensation or to terminate the employment of or relationship with
Optionee at any time.
10. TIME OF GRANTING OPTIONS. The time the Options shall be deemed
granted, sometimes referred to herein as the "date of grant," shall
be December 2, 2002.
11. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not be entitled to
the privileges of stock ownership as to any Shares not actually
issued and delivered to Optionee. No Shares shall be purchased upon
the exercise of any Options unless and until, in the opinion of the
Corporation's counsel, any then applicable requirements of any
laws, or governmental or regulatory agencies having jurisdiction,
and of any exchanges upon which the Stock of the Corporation may be
listed, shall have been fully complied with.
12. INTENDED TREATMENT AS NON-QUALIFIED STOCK OPTIONS. The Options
granted herein are intended to be non-qualified stock options
described in U.S. Treasury Regulation ("Treas. Reg.") Section
1.83-7 to which Sections 421 and 422 of the Code do not apply, and
shall be construed to implement that intent. If all or any part of
the Options shall not be described in Treas. Reg. Section 1.83-7 or
be subject to Sections 421 and 422 of the Code, the Options shall
nevertheless be valid and carried into effect.
13. PLAN CONTROLS. The Options shall be subject to and governed by the
provisions of the Plan. All determinations and interpretations of
the Plan made by the Committee shall be final and conclusive. In
the event of any inconsistencies between the Plan and this
Agreement, the Plan shall prevail.
14. SHARES SUBJECT TO LEGEND. If deemed necessary by the Corporation's
counsel, all certificates issued to represent shares of Stock
purchased upon exercise of the Options shall bear such appropriate
legend conditions as counsel for the Corporation shall require.
15. COMPLIANCE WITH APPLICABLE LAWS. The Corporation's obligation to
issue shares of its Stock upon exercise of the options is expressly
conditioned upon the completion by the Corporation of any
registration or other qualification of such shares under any state
and/or Federal law or rulings or regulations of any governmental
regulatory body, or the making of such investment representations
or other representations and undertakings by the Optionee or any
person entitled to exercise the Option in order to comply with the
requirements of any exemption from any such registration or other
qualification of such shares which the Committee shall, in its sole
discretion, deem necessary or advisable. Such required
representations and undertakings may include representations and
agreements that the Optionee or any person entitled to exercise the
option (i) is not purchasing such shares for distribution and (ii)
agrees to have placed upon the face and reverse of any certificates
a legend setting forth any representations and undertakings which
have been given to the Committee or a reference thereto.
16. MISCELLANEOUS.
16.1 Binding Effect. This Agreement shall bind and inure to the
benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.
16.2 Further Acts. Each party agrees to perform any further acts
and execute and deliver any documents which may be necessary to
carry out the provisions of this Agreement.
16.3 Amendment. This Agreement may be amended at any time by the
written agreement of the Corporation and the Optionee.
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16.4 Syntax. Throughout this Agreement, whenever the context so
requires, the singular shall include the plural, and the masculine
gender shall include the feminine and neuter genders. The headings
and captions of the various Sections hereof are for convenience
only and they shall not limit, expand or otherwise affect the
construction or interpretation of this Agreement.
16.5 Choice of Law. The parties hereby agree that this Agreement
has been executed and delivered in the State of Oklahoma and shall
be construed, enforced and governed by the laws thereof. This
Agreement is in all respects intended by each party hereto to be
deemed and construed to have been jointly prepared by the parties
and the parties hereby expressly agree that any uncertainty or
ambiguity existing herein shall not be interpreted against either
of them.
16.6 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable, such provision
shall be severable from, and such invalidity or unenforceability
shall not be construed to have any effect on, the remaining
provisions of this Agreement.
16.7 Notices. All notices and demands between the parties hereto
shall be in writing and shall be served either by registered or
certified mail, and such notices or demands shall be deemed given
and made seventy-two (72) hours after the deposit thereof in the
United States mail, postage prepaid, addressed to the party to whom
such notice or demand is to be given or made, and the issuance of
the registered receipt therefor. If served by telegraph, such
notice or demand shall be deemed given and made at the time the
telegraph agency shall confirm to the sender, delivery thereof to
the addressee. All notices and demands to Optionee or the
Corporation may be given to them at the following addresses:
If to Optionee: Xxxxx X'Xxxxxxxxx
If to Corporation: Advantage Marketing Systems Inc.
0000 X X Xxxxxxxxxx xxxxx 0000 X
Xxxxxxxx Xxxx XX 00000
Attn: Chief Financial Officer
Such parties may designate in writing from time to time such other place or
places that such notices and demands may be given.
16.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject
matter hereof, this Agreement supersedes all prior and
contemporaneous agreements and understandings of the parties, and
there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof
except as set forth or referred to herein. No supplement,
modification or waiver or termination of this Agreement shall be
binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
16.9 Attorneys' Fees. In the event that any party to this
Agreement institutes any action or proceeding, including, but not
limited to, litigation or arbitration, to preserve, to protect or
to enforce any right or benefit created by or granted under this
Agreement, the prevailing party in each respective such action or
proceeding shall be entitled, in addition to any and all other
relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum
of money which represents the attorneys' fees reasonably incurred
by the prevailing party therein in filing or otherwise instituting
and in prosecuting or otherwise pursuing or defending such action
or proceeding, and, additionally, the attorneys' fees
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reasonably incurred by such prevailing party in negotiating any and
all matters underlying such action or proceeding and in preparation
for instituting or defending such action or proceeding.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first set forth above.
"CORPORATION"
ADVANTAGE MARKETING SYSTEMS, INC.
an Oklahoma corporation
By: /S/ XXXX X. XXXX
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Xxxx X Xxxx, C. E. O.
"OPTIONEE"
/S/ XXXXX X'XXXXXXXXX
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Xxxxx X'Xxxxxxxxx
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