STOCK OPTION AGREEMENT
THIS AGREEMENT is made by and between Xxxxxxxx XxXxxx (the
"Shareholder") and Xxxxxx X. Xxxxx (the "Optionee"), as of December 13, 2001.
In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. Grant of Option. The Shareholder hereby grants to the Optionee, in the manner
and subject to the conditions hereinafter provided, the right, privilege and
option to purchase (the "Option") an aggregate of One Hundred Thousand (100,000)
shares (the "Stock") of the common stock (the "Common Stock") of NutraStar
Incorporated, a California corporation (formerly known as Alliance Consumer
International, Inc.) ("NutraStar"), no par value that is owned by the
Shareholder. This Option is specifically conditioned on compliance with the
terms and conditions set forth herein.
2. Term of Option. Subject to the terms, conditions, and restrictions set forth
herein, the term of this Option shall be one (1) year from the date of grant
(the "Expiration Date"). Any portion of this Option not exercised prior to the
Expiration Date shall thereupon become null and void.
3. Exercise of Option.
3.1. Vesting of Option. All or any portion of the Stock underlying this
Option may be purchased during the term of this Option, but not less than 100
shares of Stock (unless the remaining shares of this Option, are less than 100
shares of Stock) at any time.
3.2. Manner of Exercise. Any portion of this Option may be exercised
from time to time, in whole or in part, by presentation of a Request to Exercise
Form, substantially in the form attached hereto, to the Shareholder, which Form
must be duly executed by the Optionee and accompanied by the form of payment
indicated on the Form, subject to any legal restrictions, in the aggregate
amount of the Exercise Price (as defined below), multiplied by the number of
shares of Stock the Optionee is purchasing at such time. The form of payment may
include cash or check payable to the Shareholder or in the form of a Cashless
Exercise (as set forth in Section 3.4 hereof)
Upon receipt and acceptance by the Shareholder of such Form accompanied
by the payment specified, the Optionee shall be deemed to be the record owner of
the Stock purchased, notwithstanding that the stock transfer books of NutraStar
may then be closed or that certificates representing the Stock purchased under
this Option may not then be actually delivered to the Optionee. Upon such
receipt and acceptance, the Shareholder shall immediately execute a stock
transfer assignment in favor of the Optionee with respect to one of the
Shareholder's stock certificates of the common stock of NutraStar and deliver
such stock transfer assignment to the stock transfer agent of NutraStar.
3.3. Exercise Price. The exercise price (the "Exercise Price") payable
upon exercise of this Option shall be $1.00 per share of Stock.
3.4 Cashless Exercise. The Optionee may elect to exercise any portion
of this Option by the cancellation of a portion of the remaining shares of this
Option and the Shareholder shall cause the issuance to the Optionee the net
number of shares of Stock determined by application of the following formula:
X=Y(A-B)
------
A
Where: X= the number of shares of Stock to be issued;
Y= the number of shares of Stock as to which this
Option must be exercised to acquire the Stock;
A= the Fair Market Value (as defined below) of one
(1) share of the Stock; and
B= the Purchase Price
For purposes of this Section 3.4, the Fair Market Value of a share of
Stock shall mean the average closing price of the Common Stock quoted in the
over-the-counter Market Summary or the closing price quoted on the Nasdaq
National Market or any exchange on which the stock of NutraStar is listed,
whichever is applicable, as published in the Western Edition of The Wall Street
Journal for the thirty (30) trading days prior to the date of determination of
the Fair Market Value.
4. Compliance with Securities Laws. Upon exercising all or any portion of this
Option, the Optionee may be required to furnish representations or undertakings
deemed appropriate by the Shareholder or NutraStar to enable the offer and sale
of the shares of Stock or subsequent transfers of any interest in such shares to
comply with applicable securities laws. Evidence of ownership of shares of Stock
acquired upon exercise of Options shall bear any legend required by, or useful
for purposes of compliance with, applicable securities laws, this Option.
5. Reservation of Shares of Stock. The Shareholder represents and warrants that
it is the owner of more than 100,000 shares of the Common Stock, which shares
are free from all liens and encumbrances. The Shareholder agrees that prior to
the earlier of the expiration of this Option or the exercise and purchase of the
total number of shares of Stock represented by this Option, the Shareholder
shall retain ownership such number of the shares of the Common Stock as shall be
necessary to satisfy the terms and conditions of this Agreement.
6. No Rights as Shareholder. The Optionee shall have no rights as a shareholder
with respect to any shares of Stock covered by this Option. The Optionee shall
have no right to vote any shares of Stock, or to receive distributions of
dividends or any assets or proceeds from the sale of NutraStar assets upon
liquidation until such Optionee has effectively exercised this Option and fully
paid for such shares of Stock.
7. Arbitration. Any controversy, dispute, or claim arising out of or relating to
this Option which cannot be amicably settled shall be settled by arbitration.
Said arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association at a location selected
by the arbitrator(s) within the County of Sacramento.
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7.1 Initiation of Arbitration. After seven (7) days prior written
notice to the other, either party hereto may formally initiate arbitration under
this Agreement by filing a written request therefor, and paying the appropriate
filing fees, if any.
7.2 Hearing and Determination Dates. The hearing before the arbitrator
shall occur within thirty (30) days from the date the matter is submitted to
arbitration. Further, a determination by the arbitrator shall be made within
forty-five (45) days from the date the matter is submitted to arbitration.
Thereafter, the arbitrator shall have fifteen (15) days to provide the parties
with his or her decision in writing. However, any failure to meet the deadlines
in this section will not affect the validity of any decision or award.
7.3 Binding Nature of Decision. The decision of the arbitrator shall be
binding on the parties. Judgment thereon shall be entered in a court of
competent jurisdiction.
7.4 Injunctive Actions. Nothing herein contained shall bar the right of
either party to seek to obtain injunctive relief or other provisional remedies
against threatened or actual conduct that will cause loss or damages under the
usual equity rules including the applicable rules for obtaining preliminary
injunctions and other provisional remedies.
7.5 Costs. The cost of arbitration, including the fees of the
arbitrator, shall initially be borne equally by the parties; provided, the
prevailing party shall be entitled to recover such costs, in addition to
attorneys' fees and other costs, in accordance with Section 10 of this
Agreement.
8. Notices. All notices to be given by either party to the other shall be in
writing and may be transmitted by personal delivery, facsimile transmission,
overnight courier or mail, registered or certified, postage prepaid with return
receipt requested; provided, however, that notices of change of address or
facsimile number shall be effective only upon actual receipt by the other party.
Notices shall be delivered at the following addresses, unless changed as
provided for herein.
To the Optionee: Xxxxxx X. Xxxxx
00000 XXXXXXXXX XXXX XXX 000
XXXXXX, XX 00000
To the Shareholder: Evolution Mobile, LLC
C/o NutraStar Incorporated
0000 Xxxx'x Xxxxxx Xxxxx
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000
9. Applicable Law. This Option and the relationship of the parties in connection
with its subject matter shall be governed by, and construed under, the laws of
the State of California.
10. Attorneys Fees. In the event of any litigation, arbitration, or other
proceeding arising out of this Option, the prevailing party shall be entitled to
an award of costs, including an award of reasonable attorneys' fees. Any
judgment, order, or award entered in any such proceeding shall designate a
specific sum as such an award of attorney's fees and costs incurred. This
attorneys' fee provision is intended to be severable from the other provisions
of this Agreement, shall survive any judgment or order entered in any proceeding
and shall not be deemed merged into any such judgment or order, so that such
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further fees and costs as may be incurred in the enforcement of an award or
judgment or in defending it on appeal shall likewise be recoverable by further
order of a court or panel or in a separate action as may be appropriate.
11. Binding Effect. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective heirs, executors, and successors.
12. Counterparts. This Option Agreement may be executed in one or more
counterparts, each of which when taken together shall constitute one and the
same instrument.
13. Tax Effect. The federal tax consequences of stock options are complex and
subject to change. Each person should consult with his or her tax advisor before
exercising any Option or disposing of any Shares acquired upon the exercise of
an Option.
IN WITNESS WHEREOF, this Option Agreement has been executed as of the
dated first written above.
XXXXXXXX XXXXXX
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THE OPTIONEE:
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