Exhibit 10.9
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made effective June 13, 2003 ("EFFECTIVE DATE") by
and between VI Acquisition Corp., a Delaware corporation (the "COMPANY"), and
Xxxxxx Xxxxxxxxxx (the "OPTIONEE").
WHEREAS, pursuant to the terms of that certain Stock Purchase Agreement
dated as of the 15th day of April, 2003 (the "PURCHASE AGREEMENT"), by and among
the Company, Midway Investors Holdings, Inc. ("MIDWAY"), the shareholders of
Midway and certain other parties, the Company is acquiring all of the
outstanding equity of Midway (the "TRANSACTION");
WHEREAS, the Optionee will be retained as an employee of the Company or
one of its subsidiaries upon the consummation of the Transaction;
WHEREAS, pursuant to the terms of the Purchase Agreement, the Optionee
has elected to exchange options to purchase shares of Midway's Class A Preferred
Stock, Class C Preferred Stock and Class B Common Stock (as such terms are
defined in the Purchase Agreement) having an aggregate Option Spread (as such
term is defined in the Purchase Agreement) of $447,205, for an option to
purchase shares of the Company's Preferred Stock, and the Company, to create an
incentive for the Optionee, has agreed to grant him an option upon certain terms
and conditions; and
WHEREAS, the grant hereunder shall be independent of any formal stock
option plan to be maintained by the Company.
NOW, THEREFORE, in consideration of the following mutual covenants and
for other good and valuable consideration, the parties agree as follows:
1. GRANT OF OPTION
The Company grants to the Optionee the right and option (the "OPTION")
to purchase all or any part of an aggregate of 458.57 shares of the
Company's Preferred Stock (the "SHARES") on the terms and conditions
and subject to all the limitations set forth herein. The Optionee
acknowledges that the definitive records pertaining to the grant of
this Option, and exercises of rights hereunder, shall be retained by
the Company. The Option granted herein is intended to be a nonstatutory
option.
2. PURCHASE PRICE
The purchase price of the Shares subject to the Option shall be Twenty
Four and 80/100 Dollars ($24.80) per Share.
3. EXERCISE OF OPTION
Subject to this Agreement, the Option shall be fully vested and
exercisable on the Effective Date.
The Option shall expire on, and shall be exercised (if at all) prior to
the first to occur of:
(a) June 12, 2013;
(b) Ninety (90) days after the date on which the Optionee shall
cease, for any reason or cause whatsoever, and without regard
to such reason or cause (except as set forth in (c) and (d)
below) to be an employee of, or consultant to, the Company or
any affiliate or subsidiary thereof;
(c) The date the Optionee's services are terminated, whether as an
employee or otherwise, if such services are terminated for Due
Cause (as such term is defined in that certain Employment
Agreement executed by and between the Employee and the Company
of even date herewith (the "EMPLOYMENT AGREEMENT")); or
(d) Twelve months from the date the Optionee's services are
terminated, whether as an employee or otherwise, if such
services are terminated as a result of the Optionee's death or
Permanent Disability (as such term is defined in the
Employment Agreement), in which case the Option may be
exercised by the Optionee or his legal representative or
estate within such twelve month period.
4. ISSUANCE OF SHARES
The Option may be exercised in whole or in part (to the extent that it
is exercisable in accordance with its terms) by giving written notice
(or any other approved form of notice) to the Company. Such written
notice shall be signed by the person exercising the Option, shall state
the number of Shares with respect to which the Option is being
exercised and shall specify a date (other than a Saturday, Sunday or
legal holiday) not less than five (5) nor more than ten (10) days after
the date of such written notice, as the date on which the Shares will
be purchased, at the principal office of the Company during ordinary
business hours, or at such other hour and place agreed upon by the
Company and the person or persons exercising the Option, and shall
otherwise comply with the terms and conditions of this Agreement. On
the date specified in such written notice (which date may be extended
by the Company if any law or regulation requires the Company to take
any action with respect to the Shares prior to the issuance thereof),
the Company shall accept payment for the Shares and shall deliver to
the Optionee an appropriate certificate or certificates for the Shares
as to which the Option was exercised. The Optionee acknowledges and
agrees that the Shares to be acquired upon exercise of the Option shall
be subject to the Company's Stockholders' Agreement as in effect from
time to time and the Management Agreement, and the issuance of Shares
pursuant to the exercise of this Option shall be expressly conditioned
upon the Optionee's execution of such agreements.
The Option price of any Shares shall be payable at the time of exercise
and shall only be payable through the Optionee's delivery to the
Company of Shares that would otherwise be acquired upon the exercise of
the Option (the "WITHHELD SHARES"). The fair market value of the number
of Shares to be acquired by the Optionee upon exercise of the Option,
net of the Withheld Shares, shall be equal to $447,205 (the "ACQUIRED
SHARES")
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plus the value of Dividends (as provided for in Article 4 of the
Amended and Restated Certificate of Incorporation of VI Acquisition
Corp.) accrued on the Acquired Shares from the Effective Date.
The Company shall pay all original issue taxes with respect to the
issuance of Shares pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith. The holder
of this Option shall have the rights of a stockholder only with respect
to those Shares covered by the Option which have been registered in the
holder's name in the share register of the Company upon the due
exercise of the Option.
5. REPRESENTATIONS AND COVENANTS OF THE OPTIONEE
In connection with the grant of the Option hereunder, the Optionee
represents and warrants to the Company that:
(a) The Shares subject to the Option under this Agreement shall be
acquired for the Optionee's own account and not with a view
to, or present intention of, distribution in violation of the
Securities Act of 1933 (the "1933 ACT") or any applicable
state securities laws, and the Shares will not be disposed of
in contravention of the 1933 Act or any applicable state
securities laws.
(b) The Optionee is sophisticated in financial matters and has
been given the opportunity prior to exercise to evaluate the
risks and benefits of the Option and the Shares.
(c) The Optionee acknowledges that he is able to bear the economic
risk of the exercise of the Option for an indefinite period of
time, because the Shares have not been registered under the
1933 Act and, therefore, cannot be resold unless subsequently
registered under the 1933 Act or an exemption from such
registration is available.
(d) The Optionee has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the
grant of the Option and has had full access to such
information concerning the Company as he has requested.
(e) The Optionee has the full right, power and authority to
execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid
and legally binding obligations of the Optionee enforceable
against him in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally, now
or hereafter in effect and subject to the application of
equitable principles and the availability of equitable
remedies.
(f) The Optionee is not a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body
which would prevent the execution or delivery of this
Agreement by him or the consummation of the transactions
contemplated hereby.
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(g) The Optionee understands that neither the issuance of the
Option nor any provision contained herein shall entitle the
Optionee to remain in the service of the Company or affect the
Company's right to terminate the Optionee's employment at any
time for any or no reason.
6. REGISTRATION
The Optionee understands that the Shares are not currently being
registered under the 1933 Act by reason of their contemplated issuance
in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) thereof. The
Optionee further agrees that he will not sell or otherwise dispose of
the Shares unless such sale or other disposition has been registered or
is exempt from registration under the 1933 Act and has been registered
or qualified or is exempt from registration or qualification under
applicable securities laws of any state. The Optionee understands that
a restrictive legend consistent with the foregoing, and as set forth in
Paragraph 8, will be placed on the certificates evidencing the Shares,
and related stop transfer instructions will be noted in the stock
transfer records of the Company and/or its stock transfer agent for the
Shares.
7. WITHHOLDING
The Company shall have the power and right to deduct or withhold, or
require the Optionee to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes required by law to be withheld
with respect to any grant made under or as a result of this Agreement.
In the alternative, upon any taxable event hereunder, the Optionee may
elect, subject to Company approval, to satisfy the withholding
requirement in whole or in part, by having the Company withhold Shares
that would otherwise be transferred to the Optionee having a fair
market value, on the date the tax is to be determined, equal to the
minimum marginal tax that could be imposed on the transaction. All
elections shall be made in writing and signed by the Optionee.
8. LEGEND
The Optionee shall be bound by the provisions of the following legend
(or similar legend) which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to the grant of the Option
hereunder.
"The shares of stock represented by this certificate have been
acquired for investment and they may not be sold or otherwise
transferred by any person in the absence of an effective
registration statement for the shares under the 1933 Act or an
opinion of counsel satisfactory to the Company that an
exemption is then available."
"The shares of stock represented by this certificate are
subject to the terms and conditions of a certain Stockholders'
Agreement dated as of June 13, 2003, among the Company and
certain of its stockholders, and the terms of the Management
Agreement dated as of June 13, 2003, between the
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Company and the Optionee. Copies of the Agreements are on file
in the office of the Secretary of the Company. The Agreements
provide, among other things, for restrictions upon the
holder's right to transfer the shares represented hereby, and
for certain prior rights to purchase and certain obligations
to sell the shares of stock evidenced by this certificate at a
designated purchase price determined in accordance with
certain procedures. Any attempted transfer of these shares
other than in compliance with the Agreements shall be void and
of no effect. By accepting the shares of stock evidenced by
this certificate, any permitted transferee agrees to be bound
by all of the terms and conditions of said Agreements."
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
If the outstanding Shares of the Company are changed into or exchanged
for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization,
merger or consolidation, or if a change is made to the stock of the
Company by reason of any recapitalization, reclassification, change in
par value, stock split, combination of shares or dividends payable in
capital stock, or the like, the Company shall make adjustments to the
Shares granted to, or available for, the Optionee as it may determine
to be appropriate under the circumstances.
10. NON-ASSIGNABILITY
This Option shall not be transferable by the Optionee and shall be
exercisable only by the Optionee, except as this Agreement may
otherwise provide.
11. NOTICES
Any notices required or permitted by the terms of this Agreement shall
be given by registered or certified mail, return receipt requested,
addressed as follows:
To the Company: VI Acquisition Corp.
x/x Xxxx Xxxxx Xxxxxxxx
Xxxxx 0000
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
To the Optionee: Xxxxxx Xxxxxxxxxx
0000 X. Xxxxxx Xxx
Xxxxxx, Xxxxxxxx 00000
or to such other address or addresses of which notice in the same
manner has previously been given. Any such notice shall be deemed to
have been given when mailed in accordance with the foregoing
provisions.
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12. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware.
13. BINDING EFFECT
This Agreement shall (subject to the provisions of Section 10 hereof)
be binding upon the heirs, executors, administrators, successors and
assigns of the parties hereto.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed on their behalf, by their duly authorized
representatives, effective on the day and year first above written.
VI ACQUISITION CORP. OPTIONEE
By: /s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxxx
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Its: Executive Vice President Xxxxxx Xxxxxxxxxx
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