EXHIBIT 10.19
STOCK OPTION AGREEMENT
This Agreement made as of this 6th day of December, 1996, by and between IRATA,
INC., a Texas corporation (the "Company"), and XXXXXX X. XXXXX, III (the
"Optionee").
W I T N E S S E T H:
WHEREAS, the Optionee is a valued director of the Company, having
substantial responsibility for its future growth; and
WHEREAS, the Board of Directors of the Company considers it advisable
and in the best interest of the Company to provide the Optionee with additional
incentive by providing Optionee with a proprietary interest in the success of
the Company; and
WHEREAS, in order to provide the Optionee with a proprietary interest in
the Company, the Board has granted the Optionee an option to purchase Class A
Common Stock, $.10 par value ("Class A Stock"), of the Company.
NOW, THEREFORE, in order to set forth the terms and conditions of such
option, the Company and the Optionee hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the option
to purchase 50,000 shares of Class A Stock at a price of $.50 per
share, such purchase to be upon the terms and conditions hereinafter
set forth. The Option granted hereunder is granted under the 1996
Stock Option Plan of the Company (the "Plan") and is designated a
"Non-Qualified Option" under the Plan.
2. Amount and Dates Exercisable. The Optionee shall become immediately
vested with respect to 25,000 shares which shall become exercisable
on August 1, 1997. The remainder of this option shall become
exercisable with respect to an additional 12,500 shares on
November 1, 1998 and the final additional 12,500 shares shall become
exercisable on November 1, 1999. All of such options shall thereafter
be fully exercisable until November 3, 2002, when the option shall
expire.
3. Exercise of Option. The option granted hereunder shall be exercised
in accordance with Section 6 of the Plan by delivering to the Company
a written notification specifying the number of shares of Class A
Stock which the Optionee desires to purchase, together with payment
of the exercise price either by check, cash, certified check, bank
draft, postal or express money order to the order of the Company, by
delivery to the Company for cancellation of a portion of this option
that is then exercisable valued at "Fair Market Value", or by
delivery to the Company of other shares of Class A Stock valued at
"Fair Market Value" or by any combination of such methods. For
purposes hereof the "Fair Market Value" of a portion of this option
or shares of Class A Common Stock shall be determined in good faith
by the Board of Directors of the Company. As promptly as practical
after receipt of such written notification and payment, the Company
shall deliver to the Optionee a certificate for the number of shares
with respect to which the option has been exercised in accordance
with Section 6 of the Plan.
4. Transferability of Option. Except as hereinafter set forth, this
option shall not be transferable by the Optionee otherwise than by
will or under the laws of descent and distribution, and shall be
exercisable, during Optionee's lifetime, only by Optionee.
5. Termination of Service of Optionee. In the event that the Optionee
ceases to be a director of the Company by reason other than death
before the expiration date of this option ("Expiration Date"), this
option shall terminate and the Optionee shall have the right, prior
to three months after the date of termination and prior to the
Expiration Date, to exercise any vested or exercisable portion of
this option. In the event of death, Optionee's executors,
administrators or any person or persons to whom this option may be
transferred by will or by the laws of descent and distribution, shall
have the right, prior to twelve months after the date of death and
prior to the Expiration Date, to exercise this option in whole or in
part to the extent to which the Optionee was entitled to exercise
this option immediately prior to the death of Optionee.
6. Requirements of Law. The Company shall not be required to sell or
issue any shares under this option if the issuance of such shares
shall constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority.
Specifically in connection with the Securities Act of 1933 (as now in
effect or hereunder amended) (the "'33 Act"), upon exercise of this option,
unless a registration statement under the '33 Act is in effect with respect to
the shares of Class A Stock covered hereby, the Company shall not be required to
issue such shares unless the Company has received evidence satisfactory to it to
the effect that the issuance of shares is exempt from the registration
provisions of the '33 Act, the Optionee is acquiring such shares for investment
and not with a view to distribution thereof, and unless the certificate issued
representing the share of Class A Stock bears a legend in substantially the
following form:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws
of any State and may not be sold or transferred except upon such
registration or upon receipt by the corporation of an opinion of counsel
for the Corporation that registration is not required for such sale or
transfer."
Any determination in this connection by the Company shall be final,
binding and conclusive. At such time as a registration statement under the '33
Act is in effect with respect to the shares of Class A Stock represented by
certificates bearing the above legend or at such time as, in the opinion of
counsel for the Company, such legend is no longer required solely for compliance
with applicable securities laws, then the holders of such certificates shall be
entitled to exchange such certificates for certificates representing a like
number of shares but without such legend. The Company may, but shall in no event
be obligated to, register any securities covered hereby pursuant to the '33 Act.
Specifically in connection with The Securities Act of the State of Texas
(as now in effect or hereafter amended) (the "Texas Act"), upon exercise of this
option, unless a registration statement under the Texas Act is in effect with
respect to the shares of Class A Stock covered hereby, the
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Company shall not be required to issue such shares unless, in the opinion of
counsel for the Company, the issuance of such shares is exempt from the
provisions of the Texas Act. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the Texas Act.
The Company shall not be obligated to take any other affirmative action
in order to cause the exercise of this option or the issuance of shares pursuant
hereto to comply with any law or regulation of any governmental authority.
7. No Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to shares covered by this option until the
date of issuance of a stock certificate for such shares; no
adjustment for dividends, or otherwise, shall be made if the record
date therefor is prior to the date of issuance of such certificate.
8. Changes in the Company's Capital Structure.
(i) The existence of this Option shall not affect in any way
the right or power of the Company or its stockholders to
make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the
Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or
any other corporate act or proceeding, whether of a similar
character or otherwise.
(ii) If, while this Option is outstanding, the Company shall
effect a subdivision or consolidation of shares or other
increase or reduction of the number of shares of the Common
Stock outstanding without receiving compensation therefor
in money, services or property, then (a) in the event of an
increase in the number of such shares outstanding, the
number of shares of Common Stock then subject to this
Option shall be proportionately increased; and (b) in the
event of a decrease in the number of such shares
outstanding the number of shares then available under this
Option shall be proportionately decreased.
(iii)After a merger of one or more corporations into the
Company, or after a consolidation of the Company and one or
more corporations in which the Company shall be the
surviving corporation, the holder of this Option shall, at
no additional cost, be entitled upon exercise of this
Option to receive (subject to any required action by
stockholders) in lieu of the number of shares as to which
this Option shall then be so exercisable, the number and
class of shares of stock or other securities to which such
holder would have been entitled to receive pursuant to the
terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, such
holder had been the holder of record of a number of shares
of the Company equal to the number of shares as to which
this Option had been exercisable.
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(iv) If the Company is merged into or consolidated with another
corporation or other entity under circumstances where the
Company is not the surviving corporation, or if the Company
sells or otherwise disposes of substantially all of its
assets to another corporation or other entity while this
Option remains outstanding, then the Plan Administrator (as
defined in the Plan) may direct that any of the following
shall occur:
(a) If the successor entity is willing to assume the
obligation to deliver shares of stock or other
securities after the effective date of the merger,
consolidation or sale of assets, as the case may be,
the holder of this Option shall be entitled to receive,
upon the exercise of this Option and payment of the
option price, in lieu of shares of Common Stock, such
shares of stock or other securities as the holder of
this Option would have been entitled to receive had
this Option been exercised immediately prior to the
consummation of such merger, consolidation or sale.
(b) The Plan Administrator may waive any limitations set
forth in or imposed pursuant to the Plan or this Option
Agreement with respect to this Option such that this
Option shall become exercisable prior to the record or
effective date of such merger, consolidation, or sale
of assets.
(c) The Plan Administrator may cancel this Option as of the
effective date of any such merger, consolidation, or
sale of assets provided that prior notice of such
cancellation shall be given to the holder of this
Option at least 30 days prior to the effective date of
such merger, consolidation, or sale of assets, and the
holder of this Option shall have the right to exercise
this Option in full during a period of not less than 30
days prior to the effective date of such merger,
consolidation, or sale of assets.
(v) Except as provided in the Plan, the issuance by the Company
of Common Stock or any other shares of capital stock or
securities convertible into shares of capital stock, for
cash property, labor done, or other consideration, shall
not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of
Common Stock then subject to this Option.
9. Optionee has been previously granted options under the Company's 1993
Stock Option Plan. This grant has been made to Optionee conditioned upon
Optionee's agreement to surrender and cancel the options previously granted
under the 1993 Plan. Accordingly, by the acceptance hereof, Optionee hereby
surrenders and cancels all unexercised options granted to Optionee under the
1993 Plan.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on this ___ day of _____________, 19__, but as of the day and year
first above written.
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IRATA, INC.
By:_________________________________
Authorized Officer
By:_________________________________
XXXXXX X. XXXXX, III, Optionee
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