EXPLANATORY NOTE:
THE OTHER OPTIONS AGREEMENTS
ARE IN SUBSTANTIALLY THE SAME FORM
OPTION AGREEMENT
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This OPTION AGREEMENT (this "Agreement") dated as of November 7, 1994 by
and between XXXX X. LOVE ("Love") and XXXXXX X. XXXXXXXXXX (the "Optionee").
W I T N E S S E T H:
WHEREAS, Love is the record and beneficial owner of 242,083 shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Xxxxxxxx Convertibles, Inc., a Delaware corporation (the "Company");
WHEREAS, the Optionee is a principal shareholder, the Chief Executive
Officer and a director of the Company, and Love recognizes that the Optionee has
made a substantial contribution to the Company's growth and success and desires
to provide the Optionee with incentive to increase the value of the Company
further such that both Love and the Optionee will benefit therefrom; and
WHEREAS, simultaneously with the execution of this Agreement the
Optionee is remitting to Love the Purchase Price (as defined in Section 2
below).
NOW THEREFORE, in consideration of the premises and the mutual promises
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto intending to be
legally bound hereby agree as follows:
1. GRANT OF OPTION. Love hereby grants to the Optionee an option (the
"Option") to purchase up to a total of 121,042 of the Shares owned by Love (the
"Optioned Stock"), at the price and on the terms set forth herein.
2. PURCHASE PRICE. Love hereby acknowledges receipt from the Optionee of
$12,104.20 (the "Purchase Price") in full payment for the Option granted hereby.
3. DATE OF GRANT; TERM OF OPTION. This Option is granted as of November
7, 1994 (the "Grant Date"), and it may not be exercised later than November 7,
2004 (the "Termination Date").
4. OPTION EXERCISE PRICE. The Option exercise price is $15.00 per Share.
5. EXERCISE OF OPTION. The Option shall be exercisable during its term
only as follows:
(a) RIGHT TO EXERCISE. The Option shall vest and be exercisable as of
the Grant Date.
(b) METHOD OF EXERCISE. The Option shall be exercisable from time to
time as to all or any portion of the Optioned Stock by written notice in the
form of Attachment A attached hereto (the "Notice"). The Notice shall be signed
by the Optionee and shall be delivered in person or by certified mail to Love.
The Notice shall be accompanied by payment of the aggregate Option exercise
price. Such payment of the aggregate Option exercise price shall be by (i) cash
or certified check in the full amount of the aggregate Option exercise price or
(ii) cash or certified check in an amount equal to at least thirty-five percent
(35%) of the aggregate Option exercise price plus an assignment to Love of a
portion of the outstanding principal balance of the Note (as defined below) in
amount equal to the remainder of the aggregate Option exercise price. For
purposes hereof, the "Note" shall mean that certain Promissory Note of even date
herewith made by Xxxx Enterprises, Inc., a New York corporation, and payable to
the order of the Optionee in the original principal amount of $5,136,602. Any
such assignment of the outstanding principal balance of the Note shall be
applied to the Option exercise price on a dollar-for-dollar basis, without
regard for any reduction in interest or premium, if any, effected by such
assignment of principal outstanding. The certificate or certificates for the
Shares as to which this Option shall be exercised shall be registered on the
stock register and corporate records of the Company in the name of the Optionee.
(c) RESTRICTIONS ON EXERCISE. The Option may not be exercised for a
fraction of a Share.
(d) EFFECT OF EXERCISE. Exercise of the Option in any manner shall
result in a decrease in the number of Shares which thereafter will be available
for sale under the Option by the number of Shares as to which the Option is
exercised.
6. NO RIGHTS AS STOCKHOLDER. Until the Option is properly exercised in
whole or in part in accordance with the terms of Section 5 hereof, the Optionee
shall have no right to vote or receive dividends or any other rights as a
stockholder with respect to the Optioned Stock. No adjustment shall be made for
a dividend or other right for which the record date is prior to the date this
Option is exercised, except as provided in Section 12 hereof.
7. ENCUMBRANCES ON SHARES. It is acknowledged and agreed that the
Optioned Stock is subject to a voting trust under that certain Voting Trust
Agreement dated October 15, 1986 by and between Love, the Optionee and Xxxxxx X.
Xxxxxxxxxx, as amended on November 7, 1994 (as so amended and as amended from
time to time, the "Trust Agreement"), and that the Shares as to which the Option
shall be exercised shall remain subject to such voting trust in accordance with
the terms of the Trust Agreement. To the extent that the Optioned Stock is
subject to any lien, encumbrance or security interest as of the Grant Date
(each, a "Prior Security Interest"), the Optionee shall have the right, but not
the obligation, in the event of any payment default by Love or other event
giving rise to the right of any holder of the relevant Prior Security Interest
to foreclose on the Optioned Stock (each such payment default or other event, a
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"Default") to make payment upon the underlying obligation or otherwise to cure
such Default in accordance with the provisions of the instruments creating such
Prior Security Interest.
8. TRANSFER OR FURTHER ENCUMBRANCE OF OPTIONED STOCK. After the Grant
Date, the Optioned Stock may not be sold, pledged, assigned, hypothecated,
gifted, transferred or disposed of in any manner (each a "Disposition") without
the prior written consent of the Optionee. Love will give notice to the Optionee
of any proposed Disposition of Shares of Optioned Stock at least 30 days prior
thereto, and the Optionee shall have the right to exercise the Option with
respect to such Shares prior to such proposed Disposition.
9. DELIVERY OF SHARE CERTIFICATES. As soon as practicable after any
proper exercise of the Option, Love shall, without transfer or issue tax to the
Optionee, deliver to the Optionee a certificate or certificates representing the
Shares for which the Option shall have been exercised, accompanied by a stock
power or powers executed in blank.
10. TERMINATION OF OPTION. To the extent that the Option is not
exercised on or before the Termination Date, the Option shall terminate.
11. NONTRANSFERABILITY OF OPTION. The Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. Notwithstanding the foregoing, the Optionee may
assign his rights to the Option to any or all of his children or to a trust or
trusts for the benefit of any or all of his children. The terms of the Option
shall be binding upon the executors, administrators, heirs, successors and
permitted assigns of the Optionee.
12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of Shares covered by the
Option, as well as the exercise price per Share of the Shares covered by this
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split or
combination of the payment of a stock dividend (but only on the 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 (other than stock
bonuses to employees or directors); provided, however, that the conversion of
any convertible securities of the Company shall not be deemed to have been
effected without the receipt of consideration. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares subject to the Option.
13. NOTICES. Any notice to be given to Love or the Optionee pursuant to
this Agreement shall be delivered personally or addressed to him at the address
given beneath his signature set forth below, or at such other address as Love or
the Optionee may hereafter designate in writing to the other. 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,
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postage and registry or certification fee prepaid, in a post office or branch
post office regularly maintained by the United States Postal Service.
14. INVALID PROVISIONS. In the event that any provision of this Option
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable provision were not
contained herein.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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16. CONSENT TO JURISDICTION; SERVICE OF PROCESS. The parties hereto
submit to the jurisdiction of any New York State or federal court sitting in the
City of New York over any suit, action or proceeding arising out of relating to
this Agreement. The parties agree that process may be served against either of
them in any suit, action or proceeding by sending the same by certified mail,
return receipt requested, to the address of the party being served set forth
beneath such party's signature below. The parties agree that such service shall
be deemed to be effective service of process and, to the fullest extent
enforceable under law, to be valid personal service and personal delivery.
/s/ Xxxx X. Love
---------------------------------
Xxxx X. Love
0 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxxx
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTACHMENT A
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NOTICE OF EXERCISE OF STOCK OPTION
----------------------------------
I, Xxxxxx X. Xxxxxxx (the "Optionee"), hereby agree, represent and
warrant to Xxxx X. Love as follows:
1. I was granted a Stock Option (the "Option") on November 7,
1994 (the "Option Grant Date").
2. Pursuant to the Option, I was granted the right to purchase
121,041 shares of the common stock of Xxxxxxxx Convertibles,
Inc. (the "Company") owned by you (the "Optioned Shares").
3. I am eligible to exercise the Option.
4. I hereby elect to exercise the Option to purchase ______ of
such Optioned Shares (the "Shares") in accordance with the
Stock Optioned Agreement evidencing said Option (the
"Agreement") at $15.00 per share, for an aggregate Option
exercise price of $_______.
5. This Notice of Exercise is accompanied by payment in full for
the Shares in the form of:
(a) cash in the amount of $_____.
(b) a certified check in the amount of $______.
(c) executed instruments required to effect the assignment of
a portion of the outstanding principal balance of the
Note (as defined in the Agreement) in the amount of
$______.
6. In connection with my exercise of the Option, I have received
a copy of the Company's Prospectus relating to the shares of
the Company's common stock issuable under the Option.
Dated: _______________, [199_] [200_] OPTIONEE
----------------- Signature:__________________
Social Security Number Address:____________________
____________________________
________________________________________________________________________________
Received on _______________, [199_] [200_]
Signature: _______________
Xxxx X. Love
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ACKNOWLEDGMENT
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The Optionee hereby accepts this Option subject to all of the terms and
provisions hereof.
Date: November __, 1994 ________________________________
Xxxxxx X. Xxxxxxxxxx
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE, TRANSFER OR DISTRIBUTION THEREOF. NO SUCH SALE OR
TRANSFER MAY BE EFFECTED OTHER THAN BY WILL OR BY THE LAWS OF DESCENT OR
DISTRIBUTION.
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16. CONSENT TO JURISDICTION; SERVICE OF PROCESS. The parties hereto
submit to the jurisdiction of any New York State or federal court sitting in the
City of New York over any suit, action or proceeding arising out of or relating
to this Agreement. The parties agree that process may be served against either
of them in any suit, action or proceeding by sending the same by certified mail,
return receipt requested, to the address of the party being served set forth
beneath such party's signature below. The parties agree that such service shall
be deemed to be effective service of process and, to the fullest extent
enforceable under law, to be valid personal service and personal delivery.
XXXXXXXX ADVERTISING, INC.,
a New York corporation
By: /s/ Xxxx X. Love
---------------------------------
Name: Xxxx X. Love
Title: President
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Attachment A
NOTICE OF EXERCISE OF STOCK OPTION
I, Xxxxxx X. Xxxxxxx (the "Optionee"), hereby agree, represent and warrant
to Xxxxxxxx Advertising, Inc. as follows:
1. I was granted a stock option (the "Option") on November 7, 1994
(the "Option Grant Date").
2. Pursuant to the Option, I was granted the right to purchase
17,500 shares of the common stock of Xxxxxxxx Convertibles, Inc.
(the "Company") owned by you (the "Optioned Shares").
3. I am eligible to exercise the Option.
4. I hereby elect to exercise the Option to purchase ______ of such
Optioned Shares (the "Shares") in accordance with the Stock Option
Agreement evidencing said Option (the "Agreement") at $15.00 per
share, for an aggregate Option exercise price of $________.
5. This Notice of Exercise is accompanied by payment in full for the
Shares in the form of:
(a) cash in the amount of $_______;
(b) a certified check in the amount of $_______;
(c) authorization to Xxxx Enterprises, Inc. to reduce the
outstanding principal balance of the Note (as defined in the
Agreement) in the amount of $_______.
6. In connection with my exercise of the Option, I have received a
copy of the Company's Prospectus relating to the shares of the
Company's common stock issuable under the Option.
Dated: __________, [199 ] [200 ] OPTIONEE
______________________ Signature: ________________
Social Security Number Address: __________________
___________________________
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Received on behalf of Xxxxxxxx Advertising, Inc. on __________, [199 ] [200 ].
Signature:_________________
Name:
Title:
