1
Exhibit 10(c)
NON-QUALIFIED STOCK OPTION AGREEMENT - CERTIFICATE 2
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is made and
entered into effective as of the 25th day of June, 1997, by and between FLORAFAX
INTERNATIONAL, INC., a Delaware corporation (the "Company") and Xxxxxx X.
Xxxxxxxx (the "Optionee").
BACKGROUND
A. The Company has determined to reward and to provide incentives to those who
are primarily responsible for the operations of the Company and for shaping and
carrying out the long-range plans of the Company and aiding in its continued
growth and financial success.
B. In furtherance of these purposes, the Board of Directors of the Company has
authorized the grant to Optionee of a stock option to purchase certain shares of
the common stock, par value $.01 per share, of the Company ("Common Stock") by
resolution dated June 25, 1997.
C. The Company and Optionee wish to confirm the terms, conditions, and
restrictions of this option.
For and in consideration of the premises, the mutual covenants
contained herein, and other good and valuable consideration, the parties hereto
agree as follows:
ARTICLE 1
GRANT AND EXERCISE OF OPTION
1.1 GRANT OF OPTION. Subject to the terms, restrictions, limitations,
and conditions stated herein, the Company hereby grants to Optionee an option
(the "Option") to purchase 150,000 shares of Common Stock (the "Option Shares").
The date first written above shall be the date on which the Option has been
granted (the "Grant Date").
1.2 EXERCISE OF THE OPTION (a) The Option may be exercised with respect
to all or any portion of the Option Shares at any time during the Option Period
(as defined below) by the delivery to the Company, at its principal place of
business, of (i) a written notice of exercise which shall be delivered to the
Company no earlier than thirty (30) days and no later than ten (10) days prior
to the date upon which Optionee desires to exercise all or any portion of the
Option (the "Exercise Date"); (ii) a certified check payable to the Company in
the amount of the Exercise Price (as defined below) multiplied by the number of
Option Shares being purchased (the "Purchase Price") or by delivery of a number
of shares of Common Stock, which have been held by Optionee for at least six
months, having a fair market value, as
Page 1
2
of the date the Option is exercised, at least equal to the Purchase Price OR by
a certified check payable to the Company in an amount less than the Exercise
Price and by delivery of a number of shares of Common Stock, which have been
held by Optionee for at least six months, having a fair market value, as of the
date the Option is exercised, at least equal to the balance of the Purchase
Price; and (iii) except as permitted in Paragraph 1.2(b) below, a certified
check payable to the Company in the amount of all withholding tax obligations
(whether federal state or local), imposed on the Company by reason of the
exercise of the Option, or the Withholding Election described in Section 1.2(b).
Upon acceptance of such notice, receipt of payment in full, the Company shall
cause a certificate representing the shares of Common Stock as to which the
Option has been exercised to be issued and delivered to the Optionee.
(b) In lieu of paying the withholding tax obligation in cash, as described in
Section 1.2(a) (iii), the Optionee may elect to have the actual number of shares
issuable upon exercise of the Option reduced by the smallest number of whole
shares of Common Stock which, when multiplied by the fair market value of the
Common Stock as of the date the Option is exercised, is sufficient to satisfy
the amount of the withholding tax obligations imposed on the Company by reason
of the exercise thereof (the "Withholding Election"). The Optionee may take a
Withholding Election only if all of the following conditions are met:
(i) the Withholding Election must be made by electing the
Withholding Election in the written notice of exercise; and by
executing and delivering to the Company a properly completed
Notice of Withholding Election; and
(ii) any Withholding Election made will be irrevocable;
however, the Company may, in its sole discretion, disapprove
and not give effect to any Withholding Election.
1.3 EXERCISE PRICE. The exercise price for each share of Common Stock
shall be $4.00 (the "Exercise Price").
1.4 "TERM AND TERMINATION OF OPTION. Except as otherwise provided
herein, the term of the Option ("Option Period") shall commence on the Grant
Date and terminate on June 25, 2006. Subject to paragraph 1.6 below, this Option
shall become exercisable as to one-fourth (1/4) of the total number of Option
Shares at such time as the Fair Market Value (as defined below) of the Common
Stock of the Company Is equal to or greater than Five Dollars ($5.00) per share,
for twenty (20) consecutive trading days. This Option shall become exercisable
as to an additional one-fourth (1/4) of the total number of Option Shares at
such time as the Fair Market Value of the Common Stock of the Company is equal
or greater than
Page 2
3
Seven and 50/100 Dollars ($7.50) per share, for twenty (20) consecutive trading
days. This Option shall become exercisable as to an additional one-fourth (1/4)
of the total number of Option Shares at such time as the Fair Market Value of
the Common Stock of the Company is equal or greater than Ten and No/100 Dollars
($10.00) per share, for twenty (20) consecutive trading days. This Option shall
become exercisable as to the remaining one-fourth (1/4) of the total number of
Option Shares at such time as the Fair Market Value of the Common Stock of the
Company is equal to or greater than Twelve and 50/100 Dollars ($12.50) per
share, for twenty (20) consecutive trading days. Once the right to purchase
shares has accrued, such shares may thereafter be purchased at any time, or in
part from time to time, until the termination date of this Option, subject to
the provisions of Paragraph 1.6 below. In no case may this Option be exercised
for a fraction of a share."
Upon the expiration of the Option Period as set forth above, this
Option, and all unexercised rights granted to the Optionee hereunder shall
terminate, and thereafter be null and void.
1.5 RIGHTS AS STOCKHOLDER. Optionee, or, if applicable, any Transferee
(as defined in Section 3.13 (d)) shall have no rights as a stockholder with
respect to any shares covered by the Option until a stock certificate for the
shares is issued in Optionee's or Transferee's name. No adjustment to the Option
shall be made pursuant to Section 3.1 hereof for dividends paid or declared on
or with respect to Common Stock in cash, securities other than Common Stock, or
other property, for which the record date is prior to the date of exercise
hereof.
"1.6 EARLY TERMINATION OF OPTION. The Option Period shall terminate on
the date of the first to occur of the following:
(a) June 25, 2006:
(b) June 25, 2002, in the event all Option Shares have not vested;
(c) the date immediately preceding the consummation of: (i) dissolution
or liquidation of the Company; (ii) merger of the Company into another
corporation, or any consolidation, share exchange, combination, reorganization,
or like transaction in which the Company is not the survivor; or (iii) sale or
transfer (other than as security of the Company's obligations) of at least a
majority of the assets of the Company. The Company will use its best efforts to
provide written notice to Optionee of such dissolution, liquidation, merger,
consolidation, acquisition, separation, reorganization, sale, transfer, or like
transaction, at least (30) days prior to the closing of such transaction to
permit Optionee to exercise the Option."
Page 3
4
ARTICLE 2
RESTRICTION ON OPTION AND OPTION SHARES
2.1 RESTRICTIONS ON TRANSFER OF OPTION. The Option evidenced hereby is
non transferable other than by will or the laws of descent and distribution, and
shall be exercisable during the lifetime of Optionee only by Optionee (or, in
the event of Optionee's death or Disability, by a permitted Transferee).
2.2 RESTRICTIONS ON TRANSFER OF OPTION SHARES. Any Option Share
acquired upon exercise of the Option shall be subject to the following
restrictions:
(a) Except for transfers made in compliance with Section 2.2(b) below,
or as otherwise required or permitted hereunder, none of the Option
Shares may be conveyed, pledged, assigned, transferred, hypothecated,
encumbered, or otherwise disposed of by the Optionee, or in the case of
exercise of an Option by a Transferee, by such Transferee. The
foregoing notwithstanding, the Company may, but shall not be obligated
to, approve the transfer of such Option Shares upon the condition that
the transferee thereof execute and deliver to the Company such
documents and agreements as the Company shall reasonably require to
evidence the fact that the Option Shares to be owned, either directly
or beneficially, by such transferee shall continue to be subject to all
the restrictions set forth elsewhere herein, and that such transferee
is subject to and bound by such restrictions and provisions. Any Option
Shares transferred by bequest or by operation of the laws of descent
and distribution shall remain subject to the restrictions set forth in
this Section 2.2 and all applicable rights in favor of the Company set
forth elsewhere herein in the hands of any transferee thereof. Nothing
contained herein, however, shall be deemed to impose any requirement
that any transferee be an officer, director, or employee of, or
consultant to, the Company.
(b) The Option Shares may be transferred by the Optionee to a
Transferee upon the death or Disability of the Optionee, provided that
all such Option Shares shall remain subject to the restrictions set
forth in this Section 2.2 and all applicable rights in favor of the
Company set forth elsewhere herein in the hands the Transferee and of
any subsequent transferee of the Transferee.
Page 4
5
ARTICLE 3
GENERAL PROVISIONS
3.1 CHANGE IN CAPITALIZATION. If the number of outstanding shares of
the Common Stock shall be increased or decreased by a change in par value,
split-up, stock split, reverse stock split, reclassification, distribution of
common stock dividend, or other similar capital adjustment, an appropriate
adjustment shall be made by the Board of Directors in the number and kind of
shares as to which the Option, or the portion thereof then unexercised, shall be
or become exercisable, such that Optionee's proportionate interest shall be
maintained as before the occurrence of the event. The adjustment shall be made
without change in the total price applicable to the unexercised portion of the
Option and with a corresponding adjustment in the Exercise Price. No fractional
shares shall be issued or made subject to the Option in making such adjustment.
All adjustments made by the Board of Directors under this Section shall be
final, binding, and conclusive.
3.2 LEGENDS. Each certificate representing the Option Shares purchased
upon exercise of the Option shall be endorsed with the following legend and
Optionee shall not make any transfer of the Option shares without first
complying with the restrictions on transfer described in such legend:
TRANSFER IF RESTRICTED
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") OR
SIMILAR STATE SECURITIES LAWS APPLICABLE TO SUCH SECURITIES
(COLLECTIVELY THE "ACTS") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER
SUCH ACTS COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN
COMPLIANCE WITH RULE 144 PROMULGATED UNDER THE SECURITIES ACT, OR
SIMILAR STATE SECURITIES LAW, OR (3) THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACTS.
Optionee agrees that the Company may also include any other legends
required by applicable federal or state securities laws.
3.3 GOVERNING LAWS. This Agreement shall be construed, administered and
enforced according to the laws of the State of Delaware.
Page 5
6
3.4 SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
3.5 NOTICE. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given if personally delivered or if sent by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
3.6 SEVERABILITY. In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
3.7 ENTIRE AGREEMENT. This Agreement expresses the entire understanding
and Agreement of the parties with respect to the subject matter hereof. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
instrument.
3.8 VIOLATION. Any transfer, pledge, sale, assignment, or hypothecation
of the Option or any portion thereof made in violation of the terms of this
Agreement shall be void and without effect.
3.9 HEADINGS. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
3.10 SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
3.11 NO EMPLOYMENT RIGHTS CREATED. The grant of the Option hereunder
shall not be construed as giving Optionee the right to continued employment with
the Company.
Page 6
7
3.12 SPECIAL LIMITATION ON EXERCISE. Notwithstanding anything contained
herein to the contrary, no purported exercise of the Option shall be effective
without the written approval of the Company, which approval may be withheld if
the exercise of this Option, together with the exercise of other previously
exercised stock options and/or offers and sales pursuant to any prior or
contemplated offering of securities, would, in the sole and absolute judgment of
the Company, require the filing of a registration statement with the United
States Securities and Exchange Commission, or with the securities commission of
any state. The Company shall avail itself of any exemptions from registration
contained in applicable federal and state securities laws which are reasonably
available to the Company on terms which, in its sole and absolute discretion, it
deems reasonable and not unduly burdensome or costly. If the Option cannot be
exercised at the time it would otherwise expire due to the restrictions
contained in this Section 3.12, the exercise period may, upon request of
Optionee, be extended for successive one-year periods until it can be exercised
in accordance with this Section 3.12. Optionee shall deliver to the Company,
prior to the exercise of the Option, such information, representations, and
warranties as the Company may reasonably request in order for the Company to be
able to satisfy itself that the Option Shares to be acquired pursuant to the
exercise of the Option are being acquired in accordance with the terms of an
applicable exemption from the securities registration requirements of applicable
federal and state securities laws.
3.13 CERTAIN DEFINITIONS. The capitalized terms listed below are used
herein with the meaning thereafter ascribed:
(a) "Cause" means conduct amounting to (1) fraud or dishonesty against
the Company, (2) repeated intoxication with alcohol or drugs while on
the Company's premises or otherwise in a manner which materially
interferes with Optionee's performance of duties of employment, or (3)
a conviction or plea of guilty or nolo contendere to a felony or a
crime involving dishonesty.
(b) "Disability" means (1) the inability of Optionee to perform the
duties of Optionee's employment with the Company due to physical or
emotional incapacity or illness, where such inability is expected to be
of long-continued and indefinite duration or (2) Optionee shall be
entitled to (i) disability retirement benefits under the federal Social
Security Act or (ii) recover benefits under any long-term disability
plan or policy maintained by the Company. In the event of a dispute,
the determination of Disability shall be made by the Board of Directors
and shall be supported by advice of a physician competent in the area
to which such Disability relates.
(c) "Fair Market Value" means of the applicable prices selected from
the following
Page 7
8
alternatives for the date as of which Fair Market Value is to be
determined as quoted in the Wall Street Journal (or in such other
reliable publication as the committee, in it's discretion, may
determine to rely upon): (i) if the common stock is listed on the New
York Stock Exchange, the highest and lowest sales prices per share of
the Common Stock as quoted in the NYSE - Composite transactions listing
for such date, (ii) if the common Stock is not listed on such exchange,
the highest and lowest sales prices per share of Common stock for such
date on (or on any composite index including) the principal United
States Securities Exchange registered under the 1934 Act on which the
Common Stock is listed, or (iii) if the Common Stock is not listed on
any such exchange, the highest and lowest sales prices per share of the
Common Stock for such date on the National Associates of Securities
Dealers Automated Quotations Systems or any successor system then in
use ("NASDAQ"). If there are no such sales price quotations for the
date as of which Fair Market Value is to be determined but there are
such sales price quotations within a reasonable period both before and
after such date, then Fair Market Value shall be determined by taking a
weighted average of the means between the highest and lowest sales
prices per share of the Common Stock as so quoted on the nearest date
before, and the nearest date after, the date as of which Fair Market
Value is to be determined. The average should be weighted inversely by
the respective numbers of trading days between the selling dates and
the date as of which Fair Market Value is to be determined. If there
are no such sales price quotations on, or within a reasonable period
both before and after, the date as of which Fair Market Value is to be
determined, then Fair Market Value of the Common Stock shall be the
mean between the bonafide bid and asked prices per share of Common
Stock as so quoted for such date on NASDAQ, or if none, the weighted
average of the means between such bonafide bid and asked prices on the
nearest trading date before, and the nearest trading date after, the
date as of which Fair Market Value is to be determined, if both such
dates are within a reasonable period. If the Fair Market Value of the
Common Stock cannot be determined on the basis set forth in this
definition for the date as of which Fair Market Value is to be
determined, the Committee shall in good faith determine the Fair Market
Value of the Common Stock on such date. Fair Market Value shall be
determined without regard to any restriction, other than a restriction
which, by its terms, will never lapse."
(d) "Transferee" means the estate, or the executor or administrator of
the estate, of a deceased Optionee, or the personal representative of
an Optionee suffering a Disability.
Page 8
9
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first set forth above.
ATTEST: FLORAFAX INTERNATIONAL, INC.
by:
----------------------------------- ----------------------------
Xxxxx X. XxXxxxx, Treasurer Xxxxx X. Xxxx, President
ACCEPTED:
-----------------------------------
Xxxxxx X. Xxxxxxxx
Page 9
