EXHIBIT 4.16
Stock Option Agreement by and Between the Company and Xxxxxxx Xxxxxxxx
STOCK OPTION AGREEMENT
WHEREAS, Room Plus, Inc. (the "Company") and Xxxxxxx Xxxxxxxx
("Grantee") are parties to a Stock Option Agreement dated September 21, 1998
(the "Prior Option"); and
WHEREAS, the Company and the Grantee have agreed to cancel the
Prior Option and to enter into this Stock Option Agreement ("Option") pursuant
to which Grantee shall have an option to purchase up to 100,000 shares of the
Company's Common Stock, par value $.00133 per share, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the Company and the Grantee agree that the Prior
Option is hereby cancelled and that, pursuant to this Option, the Grantee shall
have the option to purchase the number of shares of the Company's Common Stock
specified below, during the term ending at midnight (prevailing local time at
the Company's principal offices) on the expiration date of this Option specified
below, at the option exercise price specified below, subject to and upon the
following terms and conditions:
1. Identifying Provisions: As used in this Option, the
following termsshall have the following respective meanings:
(a) Grantee: Xxxxxxx Xxxxxxxx
(b) Date of grant: February 5, 1999
(c) Number of shares optioned: 100,000
(d) Option exercise price per share: $0.75
(e) Expiration date: September 20, 2003
(f) Employment Agreement: the Employment Agreement
dated as of September 21, 1998 between the Company
and the Grantee, together with any amended or
successor employment agreement (References herein
to any "Section" of the Employment Agreement shall
refer to the corresponding sections of the
Employment Agreement dated September 21, 1998 and
any comparable provision of any amended or
successor employment agreement.)
This Option is not intended to be and shall not be treated as an
incentive stock option under Section 422 of the Internal Revenue Code.
2. Exercise Schedule: Subject to Section 3 hereof, this
Option shall vest and become exercisable as follows: This Option shall become
exercisable in respect of 11,200 shares on February 8, 1999, in respect of an
additional 2800 shares on the 21st day of each month thereafter to and including
August 21, 2001 and in respect of 2000 shares on September 21, 2001
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(each such date a "Vesting Date") and shall be exercisable in whole or in part,
from time to time, on or prior to the expiration date.
3. Additional Exercise Provisions: Notwithstanding the
provisions of Section 2, the exercise of this Option shall be subject to the
following additional provisions:
(a) If the Grantee's employment shall be terminated for Cause
pursuant to Section 6.1 of the Employment Agreement by
reason of a criminal conviction covered by Section 6.3(c)
thereof, this Option, including all rights of exercise,
shall expire and terminate forthwith upon the effective
date of such termination for Cause; in addition, if the
Company gives notice to the Grantee pursuant to Section
6.3 of the Employment Agreement of its intention to
terminate Grantee's employment for Cause based on
subsection (c) thereof, Grantee's right to exercise this
Option shall be suspended during such period of notice;
(b) If the Grantee's employment is terminated by the Company
pursuant to (i) Section 2.2 of the Employment Agreement
effective at the end of the Initial Term (as therein
defined) or (ii) Section 6.1(a) (death) or Section 6.1(b)
(disability) of the Employment Agreement , this Option
shall thereupon become exercisable in respect of such
additional number of shares in respect of which it would
have become exercisable in the 12-month period immediately
following such termination of employment;
(c) If the Grantee's employment by the Company is terminated
by the Grantee pursuant to Section 6.1(d) ("Good Reason")
or Section 6.1(e) ("Change of Control") of the Employment
Agreement or by the Company under any of the circumstances
covered by Section 6.6(E) ("Termination by the Employer
Without Cause") thereof, this Option shall thereupon
become exercisable in respect of all shares for which the
Vesting Date had not occurred prior to such termination of
employment ; provided, however, -------- that, in the
event of a termination of Grantee's employment by the
Company under circumstances covered by Section 6.6(E)
prior to the end of the Initial Term, this Option shall
become exercisable only in respect of the number of shares
for which the Vesting Date would have occurred on or prior
to the second anniversary of the Effective Date (as
therein defined); and
(d) Except as set forth in (b) and (c) of this Section 3, if
Grantee ceases to be employed by the Company for any
reason, this Option shall not at any time become
exercisable in respect of any shares for which the Vesting
Date had not occurred prior to such termination of
employment.
4. Non-Transferable: The Grantee may not transfer this Option
except by will or the laws of descent and distribution. This Option shall not be
otherwise transferred, assigned, pledged, hypothecated or disposed of in any
way, whether by operation of law or otherwise, and
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shall be exercisable during the Grantee's lifetime only by the Grantee or his
guardian or legal representative.
5. Adjustments and Corporate Reorganizations: If the outstanding
shares of the class then subject to this Option are increased or decreased, or
are changed into or exchanged for a different number or kind of shares or
securities, as a result of one or more reorganizations, recapitalizations, stock
splits, reverse stock splits, stock dividends or the like, appropriate
adjustments shall be made in the number and/or kind of shares or securities for
which the unexercised portions of this Option may thereafter be exercised, all
without any change in the aggregate exercise price applicable to the unexercised
portions of this Option, but with a corresponding adjustment in the exercise
price per share or other unit. No fractional share of stock shall be issued
under this Option or in connection with any such adjustment. Such adjustments
shall be made by or under authority of the Company's board of directors whose
determinations as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.
In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merger with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all of its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then Grantee shall have the right thereafter to receive, upon
exercise of this Option, the number of shares of common stock of the successor
or acquiring corporation or of the company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Option is exercisable
immediately prior to such event (including after giving effect to the
accelerated vesting referred to in Section 3). In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor and acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Option to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of shares
of the Common Stock for which this Option is exercisable which shall be as
nearly equivalent as practicable to the adjustments provided for in this Section
5. For purposes of this Section 5, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscriber for or purchase any such stock. The
foregoing provisions of this Section 5 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
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6. Exercise, Payment For and Delivery of Stock: This Option may
be exercised by the Grantee or other person then entitled to exercise it by
giving five (5) business days' written notice of exercise to the Company
specifying the number of shares to be purchased and the total purchase price,
accompanied by a check to the order of the Company in payment of such price. If
the Company is required to withhold an account of any present or future tax
imposed as a result of such exercise, the notice of exercise shall be
accompanied by a check to the order of the Company in payment of the amount of
such withholding.
7. Alternative Payment with Stock: Notwithstanding the foregoing
provisions requiring payment by check, payment of such purchase price or any
portion thereof may be made with shares of stock of the same class as the shares
then subject to this Option, if shares of that class are then publicly traded
(as defined below), such shares to be credited toward such purchase price at the
Market Price thereof as defined in Section 8, in which event the stock
certificates evidencing the shares so to be used shall accompany the notice of
exercise and shall be duly endorsed or accompanied by duly executed stock powers
to transfer the same to the Company; provided, however, that such payment in
stock instead of cash shall not be effective and shall be rejected by the
Company if (i) the Company is then prohibited from purchasing or acquiring
shares of the class of its stock thus tendered to it, or (ii) the right or power
of the person exercising the Option to deliver such shares in payment of said
purchase price is subject to the prior interests of any other person (excepting
the Company), as indicated by legends upon the certificate(s) or as known to the
Company. For purposes of this Section, "publicly traded" shares are those which
are listed or admitted to unlisted trading privileges on a national securities
exchange or as to which sales or bid and offer quotations are reported in the
automated quotation system ("NASDAQ") operated by the National Association of
Securities Dealers, Inc. ("NASD"). If the Company rejects the payment in stock,
the tendered notice of exercise shall not be effective hereunder unless promptly
after being notified of such rejection the person exercising the Option pays the
purchase price in acceptable form. If and while payment of the purchase price
with stock is permitted in accordance with the foregoing provisions, the person
then entitled to exercise this Option may, in lieu of using previously
outstanding shares therefor, use some of the shares as to which this Option is
then being exercised, in which case the notice of exercise need not be
accompanied by any stock certificates but shall include a statement directing
the Company to withhold so many of the shares that would otherwise have been
delivered upon that exercise of this Option as equals the number of shares that
would have been transferred to the Company if the purchase price had been with
previously issued stock.
8. Definition of Market Price: The Market Price of a share of
stock or other securities on any day shall mean the average closing price of a
share of Common Stock or other security for the 5 consecutive trading days
preceding such day on the principal national securities exchange or NASDAQ
system on which the shares of Common Stock or securities are listed or admitted
to trading or, if not listed or admitted to trading on any national securities
exchange or NASDAQ system, the average of the reported bid and asked prices
during such 5 trading day period in the over-the-counter market as furnished by
the National Quotation Bureau, Inc., or, if such firm is not then engaged in
such business selected by the Company, or, if there is no such firm, as
furnished by any member of the National Association of Securities Dealers, Inc.
selected by the Company, or if the shares of Common Stock or securities are not
publicly traded, the Market Price
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for such day shall be the fair market value thereof as determined in good faith
by the Board of Directors of the Company.
9. Rights in Shares Before Issuance and Delivery: No person shall
be entitled to the privileges of stock ownership in respect of any shares
issuable upon exercise of this Option, unless and until such shares have been
issued to such person as fully paid shares.
10. Requirements of Law of Stock Exchanges: By accepting this
Option, the Grantee represents and agrees for himself and his transferees by
will or the laws of descent and distribution that, unless a registration
statement under the Securities Act of 1933 is in effect as to shares purchased
upon any exercise of this Option, (i) any and all shares so purchased shall be
acquired for his personal account and not with a view to or for sale in
connection with any distribution, and (ii) each notice of the exercise of any
portion of this Option shall be accompanied by a representation and warranty in
writing, signed by the person entitled to exercise the same, that the shares are
being so acquired in good faith for his personal account and not with view to or
for sale in connection with any distribution.
No certificate or certificates for shares of stock purchased upon
exercise of this Option shall be issued and delivered prior to the admission of
such shares to listing on notice of issuance on any stock exchange on which
shares of that class are then listed, nor unless and until, in the opinion of
counsel for the Company, such securities may be issued and delivered without
causing the Company to be in violation of or incur any liability under any
federal, state or other securities law, any requirement of any securities
exchange listing agreement to which the Company may be a party, or any other
requirement of law or of any regulatory body having jurisdiction over the
Company.
Notwithstanding the foregoing , the company agrees to use its
best efforts to cause a registration statement on Form S-8 (or comparable form)
to be filed with the Securities and Exchange Commission in respect of the shares
underlying this Option and to become effective and to take all steps as may be
necessary to cause such shares to be eligible for trading on any stock exchange
on which the Company's Common Stock is traded.
11. Notices: Any notice to be given to the Company shall be
addressed to the Company in care of its Secretary as its principal office, and
any notice to be given to the Grantee shall be addressed to him at the address
given beneath his signature hereto or at such other address as the Grantee may
hereafter designate in writing to the Company. Any such notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, registered or certified, and deposited, postage and registry or
certification fee prepaid, in a post office or branch post office regularly
maintained by the United States Postal Service.
12. Applicable Law: This Option shall be construed and enforced
in accordance with the laws of the State of New York applicable to contracts
made and to be performed therein.
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IN WITNESS WHEREOF, the Company has granted this Option as of the
date of grant specified above.
ROOM PLUS, INC.
By: /s/ Xxxx Xxxxxx
---------------------------------
Title: President of Merchandising
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ACCEPTED:
/s/ Xxxxxxx Xxxxxxxx
---------------------------------
Grantee
Xxxxxxx Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
