Exhibit 4.5
CELESTIAL SEASONINGS, INC.
STOCK OPTION AGREEMENT
Agreement made as of the 16th day of June, 1997, between Celestial
Seasonings, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx
("Grantee").
1. Grant of Option. The Company hereby grants to Grantee, as of the date of
grant specified above, a nonqualified option to purchase 165,000 shares of
common stock, par value $0.01 per share (the "Common Stock"), of the Company
(which number of shares may be adjusted pursuant to Paragraph 5 below) at $21.50
per share, subject to the terms and conditions set forth herein.
2. Exercise of Option. Subject to the earlier termination of the option as
provided herein, the option may be exercised, by written notice to the Company
in the form attached as Exhibit A hereto, at any time and from time to time
after the date of grant; provided however, unless a Change in Control (as
defined in Section 5) occurs, such option shall not be exercisable for more than
the sum of (i) 20% of the aggregate number of shares covered by this option
multiplied by the number of full years from the date of grant thereof to the
date of such exercise, in accordance with the following schedule, plus (ii) the
product of 1b% multiplied by the number of full months from the most recent
one-year anniversary of the date of grant until the date of exercise (the
"Monthly Vesting Percentage") multiplied by the total number of shares covered
by this option. For example, if the date of grant is July 19, 1993 and the date
of exercise is between January 19, 1995 and February 18, 1995, the option may be
exercised for 30% of the total number of shares covered hereby.
Cumulative Percentage
Completed Years of Shares That May
From Date of Grant Be Exercisable
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1 but less than 2 years 20% plus Monthly Vesting Percentage
2 but less than 3 years 40% plus Monthly Vesting Percentage
3 but less than 4 years 60% plus Monthly Vesting Percentage
4 but less than 5 years 80% plus Monthly Vesting Percentage
5 or more years 100%
An option shall not be exercisable in any event after the expiration of ten
years from the date of grant. An option may not be exercised for a fraction of a
share of Common Stock
3. Conditions to Exercise. The option may not be exercised by Grantee
unless all of the following conditions are met:
(a) Legal counsel for the Company must be satisfied at the time of
exercise that the issuance of shares of Common Stock upon exercise will be
in compliance with the Securities Act of 1933, as amended (the "Act") and
applicable United States federal, state, local and foreign laws;
(b) Grantee must pay at the time of exercise the full purchase price
for the shares of Common Stock being acquired hereunder, by (i) paying in
United States dollars by cash, (ii) tendering shares of Common Stock owned
by Grantee which have a fair market value equal to the full purchase price
for the shares of Common Stock being acquired, such fair market value to be
determined in such reasonable manner as may be provided from time to time
by the Company or as may be required in order to comply with or conform to
the requirements of any applicable or relevant laws or regulations, (iii)
paying in such other form as the Company may determine in its sole
discretion, or (iv) tendering a combination of the forms of payment
provided for in Subparagraphs 3(b)(i) through 3(b)(iii) above; and
(c) Grantee must, at all times during the period beginning with the
grant date of the option and ending on the date of such exercise, have been
employed by the Company, except (i) if Grantee ceases to be an employee by
reason of Grantee's disability or early, normal or deferred retirement or
resignation, Grantee may, at any time within one year of the date of the
onset of such disability or retirement (but in no event after the
expiration of ten years from the grant date) exercise the option with
respect to the number of shares, determined under Paragraph 2 above, as to
which Grantee could have exercised the option on the date of the onset of
such disability or retirement or with respect to such greater number of
shares as determined by the Company in its sole discretion, and any
remaining portion of the option shall be cancelled by the Company, (ii) if
Grantee ceases to be an employee by reason of death, the provisions of
Paragraph 4 shall apply, (iii) if Grantees employment is terminated for any
other reason (including termination by the Company for reasons other than
death as described in Paragraph 4 or disability, retirement or resignation
as described above), Grantee may, at any time within ninety days of the
date of such termination (but in no event after the expiration of ten years
from the grant date) exercise the option with respect to the number of
shares, determined under Paragraph 2 above, as to which Grantee could have
exercised the option on the date of such termination or with respect to
such greater number of shares as determined by the Company in its sole
discretion, and any remaining portion of the option shall be cancelled by
the Company.
4. Transferability. The option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of by Grantee, except by will or the
laws of descent and distribution and is exercisable during Grantee's lifetime
only by Grantee. If Grantee or anyone claiming under or through Grantee attempts
to violate this Paragraph 4, such attempt shall be null and void and without
effect, and the Company's obligation to make any further payments (stock or
cash) hereunder shall terminate. If at the time of Grantee's death the option
has not been fully exercised, Grantee's estate or any person who acquires the
right to exercise the option by bequest or inheritance or by reason of Grantee's
death may, at any time within fifteen months after the date of Grantee's death
(but in no event after the expiration of ten years from the grant date),
exercise the option with respect to the number of shares, determined under
Paragraph 2 above, as to which Grantee could have exercised the option at the
time of Grantee's death, or with respect to such greater number of shares as
determined
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by the Company in its sole discretion. The applicable requirements of Paragraph
3 above must be satisfied at the time of such exercise.
5. Adjustments. In the event of any change in the number of shares of
Common Stock outstanding by reason of any stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, sale by the Company of all or
part of its assets, distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event occurring after the grant date
specified above and prior to its exercise in full, the number and kind of shares
of Common Stock or other property for which the option may then be exercised and
the option price per share may or may not be adjusted so as to reflect such
change, all as determined by the Company in its sole discretion. In the event of
the proposed dissolution or liquidation of the Company, the option shall
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Company. In the event of a Change in Control, all
restrictions on the option shall lapse and Grantee shall be entitled to the full
benefit of the option immediately prior to the closing of such Change in
Control, and the option shall terminate upon consummation of the Change in
Control, unless otherwise provided by the Company. For purposes of this
Agreement, a Change in Control shall mean a sale of all or substantially all of
the assets of the Company, or the merger of the Company into another
corporation.
6. Withholding of Tax. It shall be a condition to the obligation of the
Company to furnish shares of Common Stock upon exercise of an option (i) that
Grantee (or any person acting under Paragraph 4 above) pay to the Company or its
designee, upon its demand, such amount as may be demanded for the purpose of
satisfying the Company's obligation to withhold federal, state, local or foreign
income, employment or other taxes incurred by reason of the exercise of the
option or the transfer of shares thereupon, and (ii) that Grantee (or any person
acting under Paragraph 4 above) provide the Company with any forms, documents or
other information reasonably required by the Company in connection with the
grant. If the amount requested for the purpose of satisfying the withholding
obligation is not paid, the Company may refuse to furnish shares of Common Stock
upon exercise of the option.
7. Amendment or Substitution of Awards. The terms of this Agreement may be
amended from time to time by the Company in its sole discretion in any manner
that it deems appropriate (including, but not limited to, acceleration of the
vesting provisions of the option in Paragraph 2); provided, however, that no
such amendment shall adversely affect in a material manner any right of Grantee
under this Agreement without Grantee's written consent, unless the Company
determines in its sole discretion that there have occurred or are about to occur
significant changes in Grantee's position, duties or responsibilities or
significant changes in economic, legislative, regulatory, tax, accounting or
cost/benefit conditions which are determined by the Company in its sole
discretion to have or to be expected to have a substantial effect on the
performance of the Company, or any subsidiary, affiliates, division, or
department thereof. The Company may, in its sole discretion, permit Grantee to
surrender this grant in order to exercise or realize the rights under other
awards, or in exchange for the grant of new awards, or require Grantee to
surrender this grant as a condition precedent to the grant of new awards.
8. Administration. Any action taken or decision made by the Companyss.s
board of directors or the compensation committee of the board or their delegates
arising out of or in connection with the construction, administration,
interpretation or effect of the Agreement shall lie within its
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sole and absolute discretion, as the case may be, and shall be final, conclusive
and binding on Grantee and all persons claiming under or through Grantee.
9. No Rights as Stockholder. Unless and until a certificate or certificates
representing such shares of Common Stock shall have been issued to Grantee (or
any person acting under Paragraph 4 above), Grantee shall not be or have any of
the rights or privileges of a stockholder of the Company with respect to shares
of Common Stock acquirable upon exercise of the option. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued to Grantee.
10. Investment Representation. Grantee hereby acknowledges that the shares
of Common Stock which Grantee may acquire by exercising the option shall be
acquired for investment without a view to distribution, within the meaning of
the Act, and shall not be sold, transferred, assigned, pledged or hypothecated
in the absence of an effective registration statement for the shares under the
Act and applicable state securities laws or an applicable exemption from the
registration requirements of the Act and any applicable state securities laws.
Grantee also agrees that the shares of Common Stock which Grantee may acquire by
exercising the option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state.
11. Registration of Common Stock. The Company, in its discretion, may
postpone the issuance and/or delivery of shares of Common Stock upon any
exercise of the option until completion of such registration or other
qualification of such shares under any state and/or federal law, rule or
regulation as the Company may consider appropriate.
12. Rights of Participants. Neither this Agreement nor the grant of options
creates any employment rights in Grantee and the Company shall have no liability
for terminating Grantee's employment. Grantee shall have no rights under this
Agreement other than as an unsecured general creditor of the Company except that
insofar as Grantee may have become entitled to payment of additional
compensation by performance of services, Grantee shall have the same rights as
other employees under general law.
13. Notices. Any notice hereunder to the Company shall be addressed to:
Celestial Seasonings, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Secretary, and any notice hereunder to Grantee shall be addressed to
Grantee at Grantee's last address on the records of the Company, subject to the
right of either party to designate at any time hereafter in writing some other
address. Any notice shall be deemed to have been duly given when delivered
personally, by facsimile (receipt verified) or enclosed in a properly sealed
envelope, addressed as set forth above, and deposited (with first class postage
prepaid) in the United States mail.
14. Counterparts. This Agreement may be executed in one or several
counterparts, each of which shall constitute one and the same instrument.
15. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Grantee.
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16. Governing Law. The validity, construction, interpretation,
administration and effect of this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Colorado.
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IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as
of the date first above written.
CELESTIAL SEASONINGS, INC.
By:
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GRANTEE
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Xxxxxxx X. Xxxxxx
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Social Security Number
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EXHIBIT A
Form of Letter to be Used on
Exercise of Stock Option
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Date
Celestial Seasonings, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Dear Sir:
I wish to exercise the stock option granted on June __, 1997 and evidenced
by my Option Agreement dated as of June __, 1997 to the extent of ________
shares of the Common Stock of Celestial Seasonings, Inc., at the option price of
$___ per share. My check in the amount of $________ in payment of the entire
purchase price for these shares accompanies this letter.
Please issue a certificate for these shares in the following name:
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Name
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Street Address
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City/State/Zip
Very truly yours,
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Xxxxxxx X. Xxxxxx
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Social Security Number
