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EXHIBIT 10.29
INTERVISUAL BOOKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
This Nonstatutory Stock Option Agreement (the "Agreement") is
made as of this 16th day of July, 1998, between Intervisual Books, Inc. (the
"Company") and Xxxxxxx Xxxxxxx Xxxxx ("Director").
RECITALS
A. Director is providing extensive services to the Company and the
Company desires to compensate Director for such services. In an effort to
conserve the Company's cash, the Company and the Director have agreed that the
Company shall grant as of the date of this Agreement a nonqualified stock option
to Director to purchase 25,000 shares of the Company's common stock (the
"Shares") as provided for herein.
B. The Company and Director desire to enter into this Agreement to
memorialize the grant of the option to Director.
THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the parties hereto agree
as follows:
1. Grant of Option. The Company hereby grants to Director the
right and option (the "Option") to purchase, on the terms and conditions
contained herein, all or any part of an aggregate of 25,000 Shares of Company
common stock. (The number of Shares subject to this Option is subject to
adjustment, under certain circumstances, as provided in Section 6 of this
Agreement.) Director agrees that Director and any other person who may be
entitled hereunder to exercise the Option shall be bound by all terms and
conditions of this Agreement.
2. Purchase Price. The purchase price of the Shares subject to
this Option shall be One Dollar and Fifty Cents ($1.50) per Share, which price
constitutes the closing price of the Company's common stock on the date of
grant. (The purchase price for each Share subject to this Option is subject to
adjustment, under certain circumstances, as provided in Section 6 of this
Agreement.)
3. Vesting Schedule. The Option granted under this Agreement shall
become exercisable on the following schedule:
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(i) Beginning on February 10, 1999, as to 8,333 of
the Shares covered by this Option;
(ii) Beginning on February 10, 2000, as to 8,333 of
the Shares covered by this Option; and
(iii) Beginning on February 10, 2001, as to 8,334 of
the Shares covered by this Option.
No Option shall be exercisable as to any Shares with respect to which such
Option previously has been exercised.
4. Exercise. Prior to its expiration and in accordance with the
vesting schedule outline in Section 3 above, this Option may be exercised, in
whole or in part (provided, however, that the Company shall not be required to
issue fractional shares) by delivery of written notice of exercise to the
Secretary of the Company accompanied by the full purchase price of the Shares
being purchased. The purchase price shall be paid at the time of exercise (i) in
cash, (ii) by delivery to the Company of outstanding shares of the Company's
common stock previously held by the Director, the fair market value of which, as
of the date of exercise, is equal to the purchase price, or (iii) by any
combination of cash and previously owned shares.
During Director's lifetime, this Option shall be exercisable
only by Director or, in the event of his or her incompetence, by his or her duly
appointed guardian (provided, however, that such guardian presents proof
satisfactory to the Company of his or her right to exercise this Option on
behalf of such Director). In the event of Director's death, this Option may be
exercised by such Director's designated beneficiary or, in the absence of such
designation, by will or the laws of dissent and distribution for a period of six
(6) months following the Director's death, but only to the extent that this
Option was exercisable on the date of such death.
5. Nontransferability. This Option shall be nonassignable and
nontransferable other than by will or the laws of dissent and distribution. Any
attempt to assign, transfer, pledge, hypothecate or otherwise dispose of this
Option or any right or privilege granted herein contrary to the above provision
shall be void and of no effect.
6. Adjustment Upon Changes in Capitalization. Subject to any
required action by stockholders, the number of shares of Common Stock covered by
this Option and the exercise price thereof shall be proportionately adjusted for
any increase or decrease in the number of issued shares of the Company's common
stock resulting from a subdivision or consolidation of such shares or the
payment of a stock dividend (but only of common stock) or any other increase or
decrease in the number of issued shares of
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common stock effected without receipt of consideration by the Company. Subject
to any required action by stockholders, if the Company is the surviving
corporation in any merger or consolidation, this Option shall pertain and apply
to the securities to which a holder of the number of shares of common stock
subject to the Option would have been entitled.
The foregoing adjustments shall be made by the Company's Board
of Directors, whose determination shall be conclusive and binding on the Company
and Employee.
Except as expressly provided in this Section 6, Employee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares subject to this option or the exercise price thereof.
This option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
7. Expiration of Options. Except as hereinafter provided, this
Option shall expire on the earlier of (a) the last day of the tenth year after
the date of this Agreement or (b) the date that Director ceases to be a member
of the Board; provided, however, that to the extent this Option is otherwise
exercisable on the date that Director ceases to be a member of the Board for any
reason other than "cause", death or retirement under a retirement plan of the
Company, this Option shall remain exercisable for 210 days following the last
day of Director's Board membership to the extent exercisable on such last day
and shall expire if not exercised within said 210-day period.
If Board membership ceases on account of death or retirement
under a retirement plan of the Company, the Option (to the extent it has not
expired) held by Director on the last day of Board membership, which is then
exercisable or would have become exercisable had Director continued as a member
of the Board for one additional year, shall be immediately exercisable and
remain exercisable for 365 days following the last day of Director's Board
membership and shall expire if not exercised within said 365- day period. To the
extent any otherwise unexpired Option is not exercisable in accordance with the
immediately preceding sentence, it shall expire as of the date of death or the
effective date of retirement, as the case may be.
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If Director's membership on the Board ends after the occurrence
of "cause", this Option shall expire immediately on the last date of membership.
"Cause", for the purposes of this Section 7, means any (i) act or omission for
which indemnification of Director is prohibited by the California Corporations
Code, (ii) conviction of a felony which adversely affects the Company, or (iii)
misconduct involving personal profit to Director.
8. Tax Withholding. Any exercise of this Option shall be subject
to withholding of state and federal income taxes, FICA tax or other taxes to the
extent required by applicable law.
9. Laws and Regulations. This Agreement, the grant and exercise of
the Option under this Agreement, and the obligation of the Company to sell or
deliver any of its securities (including, without limitation, the Shares) shall
be subject to all applicable laws, regulations and rules. In the event that the
Shares are not registered under the Securities Act of 1933 (the "Act") or any
applicable state securities laws prior to the delivery of such Shares, the
Company may require, as a condition to the issuance thereof, that the persons to
whom Shares are to be issued represent and warrant in writing to the Company
that such Shares are being acquired by him or her for investment for his or her
own account and not with a view to, for resale in connection with, or with an
intent of participating directly or indirectly in, any distribution of such
Shares within the meaning of the Act, and a legend to that effect may be placed
on the certificates representing the Shares.
10. Continued Service as a Director. This Agreement shall not
obligate the Company or any affiliate of the Company to nominate Director for
election or re-election to the Board nor constitute any contract or agreement of
nomination with Director, nor shall this Agreement interfere in any way with the
right of any person to remove Director.
11. Effect of a Change in Control. In the event of a "Change in
Control" of the Company as defined in below, the unexpired Options under this
Agreement then held by Director on the date of such Change in Control shall be
immediately exercisable in full, notwithstanding the vesting schedule of Section
3 of this Agreement.
For purposes of this Agreement, a "Change in Control" of the
Company shall mean a change in control of a nature that would be required to be
reported in response to Item 1 of Form 8-K required to be filed pursuant to the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without
limitation, such a Change in Control shall be deemed to have occurred if:
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(a) the shareholders of the Company approve a
definitive agreement to sell, transfer, or otherwise dispose of all or
substantially all of the Company's assets and properties; or
(b) any "person" (as such term is used in Section
13(d) and 14(d) of the Exchange Act), other than the Company or any "person" who
as of the date this Agreement is a director or officer of the Company (including
any trust of such director or officer), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities provided,
however, that the following shall not constitute a "Change in Control" of the
Company:
(i) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of a conversion
or exchange privilege in respect of outstanding convertible or exchangeable
securities);
(ii) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(iii) upon the death of any person who as of
the date of this Agreement is a director or officer of the Company, the transfer
(a) by testamentary disposition or the laws of intestate succession to the
estate or the legal beneficiaries or heirs of such person, or (b) by the
provisions of any living trust to the named current income beneficiaries thereof
of the securities of the Company beneficially owned by such director or officer
of the Company; or
(c) during any period of two consecutive years during
the term of this Plan, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors representing
at least two-thirds of the directors then in office who were directors at the
beginning of the period; or
(d) the shareholders of the Company approve the
dissolution of the Company or a definitive agreement to merge or consolidate the
Company with or into another entity in which the Company is not the continuing
or surviving corporation or pursuant to which any shares of the Company's stock
would be converted into cash, securities or other property of another entity,
other than a merger of the Company in which holders of the Company's common
stock immediately prior to the merger have the
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same proportionate ownership of common stock (or equivalent securities) of the
surviving entity immediately after the merger as immediately before.
12. General. Neither Director nor any person entitled to exercise
this Option shall have any dividend rights or privileges of a shareholder of the
Company with respect to any Shares issuable upon the exercise of this Option
unless and until a certificate or certificates representing such Shares shall
have been issued and delivered. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date such stock
certificates are issued.
The Option granted under this Agreement is a nonstatutory
option and is not intended to qualify as an incentive stock option under Section
422 of the Internal Revenue Code of 1968, as amended.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs,
beneficiaries, executors and administrators.
The paragraph headings used in this Agreement are for
convenience only and are not part of the context.
INTERVISUAL BOOKS, INC. DIRECTOR:
a California corporation
By: /s/ XXXXX X. XXXX /s/ XXXXXXX XXXXXXX XXXXX
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Xxxxx X. Xxxx Xxxxxxx Xxxxxxx Xxxxx
Chairman of the Board and
Chief Executive Officer Address:
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
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