Exhibit 1
RECOVERY ENGINEERING, INC.
1993 DIRECTOR STOCK OPTION PLAN
DIRECTOR'S NONQUALIFIED STOCK OPTION AGREEMENT
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OPTIONEE: Xxxxxx Xxxxx
XXXXX DATE: July 19, 1996
NUMBER OF OPTION SHARES: 1,000 Shares
OPTION PRICE PER SHARE: $11.26 per Share
EXPIRATION DATE: July 19, 2001
THIS AGREEMENT is made as of the Grant Date set forth
above, by and between Recovery Engineering, Inc. (the "Company"),
and the Optionee named above, who is a non-employee director of
the Company (the "Optionee").
The Company desires, by affording the Optionee an
opportunity to purchase shares of its Common Stock, $.01 par
value (the "Common Stock"), as hereinafter provided, to carry out
the purpose of the Recovery Engineering, Inc. 1993 Stock Option
Plan (the "Option Plan").
NOW, THEREFORE, in consideration of the mutual
covenants hereinafter set forth and for other good and valuable
consideration, the parties hereby agree as follows:
1. Grant of Option. The Company hereby grants to the
Optionee the right and option to purchase all or any part of the
aggregate number of shares of Common Stock set forth above (the
"Option Shares") (such number being subject to adjustment as
provided in paragraph 7 hereof) on the terms and conditions set
forth in this Agreement. This option is not intended to be an
"incentive stock option" within the meaning of section 422 of the
Internal Revenue Code of 1986, as amended.
2. Purchase Price. The purchase price of the Option
Shares shall be the Option Price Per Share set forth above (such
Option Price Per Share being subject to adjustment as provided in
paragraph 7 hereof).
3. Term and Exercise of Option.
a. The term of this option shall commence on the
Grant Date and shall continue until the Expiration Date set forth
above. Except as otherwise provided herein, this option may not
be exercised prior to six months after the Grant Date, and may
thereafter be exercised for the purchase of all or any part of
the Option Shares at any time, or from time to time, prior to the
Expiration Date set forth above.
b. Neither the Optionee nor the Optionee's legal
representatives, legatees or distributees, as the case may be,
will be, or will be deemed to be, a holder of any Option Shares
for any purpose unless and until certificates for such shares are
issued to the Optionee or the Optionee's legal representatives,
legatees or distributees, under the terms of the Option Plan.
4. Limitations on Exercise of Option.
a. The obligation of the Company to sell and deliver
shares under this option shall be subject to all applicable
federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be
required. The Company shall not be required to issue or deliver
any certificates for shares of Common Stock prior to the
completion of any registration or qualification for such shares
under any federal or state law, or any ruling or regulation of
any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
b. This option shall not be exercisable if at any
date of exercise, it is the opinion of counsel for the Company
that registration of said shares under the Securities Act of
1933, or other applicable statute or regulation, is required and
this option shall again become exercisable only if the Company
elects to and thereafter effects a registration of said shares
under the Securities Act of 1933, or other applicable statute or
regulation, within the period of this option.
c. It is the Company's intent that the provisions of
this option comply in all respects with Section 16 of the
Securities Exchange Act of 1934 and any regulations promulgated
thereunder, including Rule 16b-3. If any provision of this
option is found not to be in compliance with said Rule, the
provision shall be deemed null and void.
d. Payment upon exercise of this option may be made
in cash, by personal check payable to the Company, by delivery of
shares of Common Stock having an aggregate fair market value on
the date of exercise which is not less than the option price, or
by a combination thereof.
5. Nontransferability of Option. This option shall not be
transferable by the Optionee, other than by will or the laws of
descent and distribution. During the lifetime of the Optionee,
this option shall be exercisable only by the Optionee.
6. Termination of Service. This option will not confer
upon the Optionee any right with respect to continuance of
service as a director of the Company or a Subsidiary of the
Company, nor will it interfere in any way with the Company's
right or the Subsidiary's right to terminate his service at any
time. If for any reason the Optionee ceases to be a director of
the Company, this option will remain exercisable until the
Expiration Date set forth above. In the event of the death of
the Optionee, this option shall be exercisable only by the
executors or administrators of the Optionee's estate or by the
person or persons to whom the Optionee's rights under the option
shall pass by the Optionee's Will or the laws of descent and
distribution.
7. Adjustments in Event of Change in Common Stock. In the
event of any change in the Common Stock of the Company by reason
of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination, or exchange of shares, or
rights offering to purchase Common Stock at a price substantially
below fair market value, or of any similar change affecting the
Common Stock, the number and kind of shares which thereafter are
subject to this option and the purchase price per share thereof
shall be appropriately adjusted consistent with such change in
such manner as the Board of Directors may deem equitable to
prevent substantial dilution or enlargement of the rights granted
to the Optionee.
8. Interpretation. The interpretation and construction of
any provision of the Option Plan and this option shall be made by
the Board of Directors and shall be final, conclusive and binding
on the Optionee and all other persons.
9. Subsidiary. The term "Subsidiary" as used in the
Option Plan and in this Option Agreement means a subsidiary
corporation, at least 50% of the outstanding voting stock or
voting power of which is beneficially owned, directly or
indirectly, by the Company.
10. Option Plan Governs. This option is in all respects
subject to and governed by all of the provision of the Option
Plan.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed in its corporate name by its duly
authorized officer, and the Optionee has executed this Agreement
as of the Grant Date set forth above.
COMPANY: RECOVERY ENGINEERING, INC.
By \s\ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Chief Executive Officer
OPTIONEE: \s\ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
