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EXHIBIT 10.80
OPTION AGREEMENT
THIS AGREEMENT is made effective as of August 1, 1998, by and between
Xxxx X. Gemmersdorfer (hereinafter referred to as "Optionee"), and Decora
Industries, Inc., a Delaware corporation (hereinafter referred to as
"Optionor").
RECITALS:
WHEREAS, Optionee has been appointed as Executive Vice President of
Optionor and as Chairman of the Management Board of Optionor's subsidiary,
Xxxxxx Xxxxxxxxxx AG ("Hornschuch"); and
WHEREAS, to compensate Optionee for his services to Optionor, Optionor
desires to grant to Optionee and Optionee is desirous of acquiring an option to
purchase shares of the common stock of Optionor, subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereby agree as follows:
1. Incorporation of Recitals. The parties hereby incorporate by this
reference the recitals set forth above.
2. Grant of Option. Subject to the terms and conditions hereinafter set
forth, Optionor hereby gives and grants to Optionee the right and option to
purchase theretofore authorized but unissued common shares of Optionor at such
time and for the purchase price specified below.
A. Optionee shall have the right and option to purchase, at $8.00
per share and Optionor shall have the obligation to issue to Optionee, 60,000
shares of the authorized but unissued common shares of Optionor. Such options
shall vest as follows: 12,000 shall vest as of August 1, 1998; 12,000 shall vest
on August 1, 1999; 12,000 shall vest on August 1, 2000, 12,000 shall vest on
August 1, 2001, and 12,000 shall vest on August 1, 2002. It shall be a further
condition to the vesting of any option described in this subsection A that at
the time of vesting, Optionee shall be an active employee of Optionor or an
affiliate of Optionor.
B. Optionee shall have the right and option to purchase, at $8.00
per share and Optionor shall have the obligation to issue to Optionee, an
additional 60,000 shares of the authorized but unissued common shares of
Optionor. Such options shall vest as follows:
On or about the commencement of each fiscal year of Hornschuch (starting
with the fiscal year ending December 31, 1999), a set of financial performance
objectives for Hornschuch shall be established based upon Hornschuch's operating
plan for that fiscal year, subject to approval by the Board of Directors of
Optionor. If, with respect to any of the fiscal years described below, such
financial performance objectives have been achieved for such fiscal year (as
shown by the audited financial statements for such fiscal year, which financial
statements shall be completed not later than the May 31 immediately following
the end of such fiscal year) then as of the June 1
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immediately following the end of such fiscal year, options shall vest and shall
be immediately exercisable in the amount shown below with respect to such fiscal
year:
Fiscal year ended December 31, 1999 24,000 Shares
Fiscal year ended December 31, 2000 12,000 Shares
Fiscal year ended December 31, 2001 12,000 Shares
Fiscal year ended December 31, 2002 12,000 Shares
It shall be a further condition to the vesting of any option described
in this subsections B that Optionee shall be an active employee of Optionor or
an affiliate of Optionor at the end of the fiscal year to which such Option
relates.
C. Each option described in subsections A and B above shall be
exercisable from and after the date of vesting until the first to occur of (i)
July 31, 2003 or (ii) the third anniversary of the date of vesting.
3. Exercise of Option. Optionee may exercise any option granted
hereunder by notifying Optionor in writing of Optionee's intention to exercise
such option. A closing date shall then be agreed to in good faith no later than
30 days after the notice, at which time Optionee shall pay the purchase price of
the Shares being purchased, and Optionor shall deliver to Optionee the
certificates for shares duly endorsed. Optionee may purchase all or any part of
the Shares subject to options granted hereby.
4. Representations. Optionor represents and warrants to Optionee that
Optionee, upon proper exercise, shall receive good and marketable title to the
shares of Optionor underlying the options being granted hereby, free of all
pledges, liens and encumbrances, except as stated in paragraph 5.
5. Representations and Warranties of Optionee. Optionee hereby
represents and warrants that:
A. The options granted hereby and the Shares which will be
purchased by and delivered to Optionee upon exercise of
such options are being acquired by Optionee for his own
account and not with a view to resale or other
disposition thereof.
B. Optionee will not sell, transfer, or make any other
disposition of any option or the shares to be purchased
and delivered to Optionee hereunder upon the exercise of
such option unless and until (a) such option or shares,
as applicable, are included in a registration statement
or a post-effective amendment under the Securities Act
which has been filed by the Optionor and declared
effective by the Securities and Exchange Commission (the
"SEC"), or (b) in the opinion of counsel for the
Optionor, no such registration statement or
post-effective amendment is required, or (c) the SEC has
first issued a "no action" letter regarding any such
proposed disposition of any option or the shares.
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6. Federal and State Securities Law Requirements. The obligation of the
Optionor to deliver and transfer the shares to the Optionee upon any exercise of
any option shall be subject to the following:
A. Optionor may require Optionee, as an additional condition
of Optionee's obligation to deliver the shares upon
exercise of any option hereunder, to make any
representations and warranties (including without limit
those set forth in Paragraph 5 hereof) with respect to the
shares as may, in the opinion of counsel to Optionor, be
required to ensure compliance with the Securities Act, the
securities laws of any state, or any other applicable law,
regulation, or rule of any governmental agency.
B. Each certificate representing the shares issued pursuant
to this Agreement shall bear whatever legends are required
by federal or state law or by any governmental agency. In
particular, unless an appropriate registration statement
is filed pursuant to the Securities Act with respect to
the shares, each certificate representing such shares
shall be endorsed on its face with the following legend or
its equivalent:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
SECURITIES MAY BE SOLD OR TRANSFERRED ONLY IF THEY HAVE
BEEN REGISTERED UNDER SAID ACT OR THERE EXISTS AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT OR THE RULES
AND REGULATIONS THEREUNDER EVIDENCED BY A NO-ACTION LETTER
OR AN OPINION OF COUNSEL TO THE ISSUER OR TO THE HOLDER
HEREOF REASONABLY SATISFACTORY TO THE ISSUER.
7. Restrictions. Optionee:
A. Shall not be entitled to any type of dividend declared
by Optionor, unless and until an option is exercised;
and
B. Shall not be entitled to any voting rights by virtue of
an option; and
C. Acknowledges that the options granted hereby are personal
to Optionee and that Optionee may not sell, assign,
transfer or otherwise dispose of such options to any other
person.
8. Anti-Dilution. If prior to the exercise of any option granted
hereunder Optionor shall have effected one or more stock split-ups, stock
dividends, or other increases or reductions of the number of Shares of its
common stock outstanding without receiving compensation therefor in money,
services or property, the number of Shares of common stock subject to the
options hereby granted shall (a) if a net increase shall have been effected in
the number of outstanding shares of Optionor's common stock, be proportionately
increased and the cash consideration payable per Share
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shall be proportionately reduced; and (b) if a net reduction shall have been
effected in the number of outstanding Shares of Optionor's common stock, be
proportionately reduced and the cash consideration payable per Share be
proportionately increased.
9. Notice and Opportunity to Cure Default. In the event of a perceived
default of the provisions of this agreement, Optionor agrees to provide Optionee
and his counsel written notice of any default and Optionor shall have 10 days
from receipt of said notice to cure the stated default.
10. Agreement to Perform Necessary Acts. The parties hereto agree to
cooperate fully with one another in executing all documents, certificates,
notices, filings and the like and performing all acts reasonably necessary to
carry out the intent of this agreement.
11. Assignment and Transfer. No option granted hereby may be assigned by
Optionee without the prior written consent of Optionor.
12. Amendments. This agreement may not be modified, amended or changed
except by an instrument in writing signed by the parties hereto.
13. Litigation and Attorneys' Fees. In the event of any litigation
between the parties to in connection with this Agreement or to enforce any
provision or right hereunder, the unsuccessful party to such litigation shall
pay to the successful party therein by such successful party, which costs,
expenses and attorneys' fees shall be included as a part of any judgment
rendered in such action in addition to any other relief to which the successful
party may be entitled.
IN WITNESS WHEREOF, the parties have executed this Option Agreement as
of the day and year first above written.
OPTIONEE:
/s/ XXXX X. GEMMERSDORFER
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XXXX X. GEMMERSDORFER
OPTIONOR
Decora Industries, Inc.
By: /s/ XXXXXXX XXXXXXX
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Its: Executive Vice President and
Secretary
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