EXHIBIT 10.10
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 31st day of March, 1997, between BIG
CITY BAGELS, INC., a New York corporation ("Company"), and XXXX XXXXXXX
("Director" or "Holder").
WHEREAS, pursuant to the Company's 1996 Performance Equity Plan
("Plan"), on March 31st of each calendar year, each person who is then a
director of the Company is to be awarded an option (the "Option") to purchase an
aggregate of 10,000 of the authorized but unissued or treasury shares of the
common stock of the Company, $.001 par value ("Common Stock"), on the terms and
conditions set forth in this Agreement and subject to provisions of the Plan
(capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Plan); and
WHEREAS, the Director desires to acquire said Option on the
terms and conditions set forth in this Agreement:
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants Director the Option to
purchase all or any part of an aggregate of 10,000 shares of Common Stock (the
"Option Shares") on the terms and conditions set forth herein and subject to the
provisions of the Plan.
2. Nonincentive Stock Option. The Option represented hereby is a
nonqualified stock option not intended to qualify under any section of the
Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $5.375 per
share, subject to adjustment as hereinafter provided.
4. Exercisability. This Option is exercisable, subject to the terms and
conditions of the Plan and this Agreement, at any time from and after the date
hereof, and it shall remain exercisable until the close of business on March 30,
2007 (the "Exercise Period").
5. Withholding Tax. Not later than the date as of which an amount first
must be included in the gross income of Director for Federal income tax purposes
with respect to the Option, Director may be required to pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. The obligations of the Company under the Plan
and pursuant to this Agreement shall be conditional upon such payments or
arrangements with the Company, if such payments or arrangements are required,
and the Company shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to Director from the
Company.
6. Adjustments.
(a) In the event of a stock split, stock dividend, combination of shares,
or any other similar change in the Common Stock of the Company as a whole, the
Board of Directors of the Company shall make equitable, proportionate
adjustments in the number and kind of shares covered by the Option and in the
option price hereunder.
(b) In the event of any reclassification or reorganization of the
outstanding shares of Common Stock other than a change covered by subsection (a)
hereof or which solely affects the par value of such shares of Common Stock, or
in the case of any merger or consolidation of the Company with or into
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another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification
or reorganization of the outstanding shares of Common Stock), the Holder shall
have the right thereafter (until the expiration of the right of exercise of this
Option) to receive upon the exercise hereof after such event, for the same
aggregate Exercise Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property (including
cash) receivable upon such reclassification, reorganization, merger or
consolidation by a holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Option immediately prior to such event. The
provisions of this subsection (b) shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
7. Method of Exercise.
7.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice.
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to Director as soon as practicable after payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. Director shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Company, in its sole discretion, may allow
Director to use Common Stock of the Company owned by him to pay the purchase
price for the Option Shares (and any required withholding taxes) by delivery of
stock certificates in negotiable form which are effective to transfer good and
valid title thereto to the Company, free of any liens or encumbrances. Shares of
Common Stock used for this purpose shall be valued at the Fair Market Value, as
defined below.
7.3.3 Fair Market Value. "Fair Market Value", unless otherwise required by
any applicable provision of the Internal Revenue Code of 1986, as amended, or
any regulations issued thereunder, means, as of any given date: (i) if the
Common Stock is listed on a national securities exchange or quoted on the Nasdaq
National Market or Nasdaq SmallCap Market, the last sale price of the Common
Stock in the principal trading market for the Common Stock on the last trading
day preceding the date of exercise in accordance with Section 7.3.2, above, as
reported by the exchange or Nasdaq, as the case may be; (ii) if the Common Stock
is not listed on a national securities exchange or quoted on the Nasdaq National
Market or Nasdaq SmallCap Market, but is traded in the over-the-counter market,
the closing bid price for the Common Stock on the last trading day preceding the
date of exercise in accordance with Section 7.3.2, above, as reported by the OTC
Bulletin Board or the National Quotation Bureau, Incorporated or similar
publisher of such quotations; and (iii) if the fair market value of the Common
Stock cannot be determined pursuant to clause (i) or (ii) above, such price as
the Company shall determine, in good faith.
8. Nonassignability. The Option shall not be assignable or transferable,
without the consent of the Company, except by will or by the laws of descent and
distribution in the event of the death of Director. No transfer of the Option by
Director by will or by the laws of descent and distribution shall be effective
to bind the Company unless the Company shall have been furnished with written
notice thereof and a copy of the will and/or such other evidence as the Company
may deem necessary to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions of the Option.
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9. Company Representations. The Company hereby represents and warrants to
Director that:
(i) the Company, by appropriate and all required action, is duly authorized
to enter into this Agreement and consummate all of the transactions contemplated
hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
Director in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Director Representations. Director hereby represents and warrants to
the Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of the Plan as in effect as of the date of this
Agreement;
(iii) he has received a copy of all reports and documents required to be
filed by the Company with the Commission pursuant to the Exchange Act within the
last 24 months and all reports issued by the Company to its shareholders;
(iv) he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are registered
under the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
(v) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of the Company
and all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (iii) above;
(vi) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
(vii) the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not be
sold or transferred in the absence of such registration
or an exemption therefrom under said Act."
(viii) he agrees that he shall not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by him except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company.
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11. Restriction on Transfer of Option Shares.
(a) Anything in this Agreement to the contrary notwithstanding, Director
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) Director
has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
(b) Anything in this Agreement to the contrary notwithstanding, Director
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him except in accordance with Company's policy,
if any, regarding the sale and disposition of securities owned by employees
and/or directors of the Company.
12. Miscellaneous.
12.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
12.2 Conflicts with Plan. In the event of a conflict between the provisions
of the Plan and the provisions of this Agreement, the provisions of the Plan
shall in all respects be controlling.
12.3 Director and Stockholder Rights. Director shall not have any of the
rights of a shareholder with respect to the Option Shares until such shares have
been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Director any right to a continued
directorship position with the Company or any subsidiary thereof, nor shall it
interfere in any way with the right of the Company to terminate such
directorship in accordance with the provisions regarding such termination set
forth in the Company's Certificate of Incorporation and By-laws and/or under
applicable laws of the State of New York.
12.4 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
12.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by Director and the Company.
12.6 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
12.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
12.8 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.
BIG CITY BAGELS, INC. Address: 00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
By:
---------------------
Xxxxx Xxxxxx
President
DIRECTOR:
----------------------------------
XXXX XXXXXXX
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
Big City Bagels, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: The Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of March
31, 1997 with Big City Bagels, Inc. (the "Company"), I hereby irrevocably elect
to exercise the right to purchase _________ shares of the Company's common
stock, par value $.001 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete
applicable box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order of
"Big City Bagels, Inc." in the sum of $_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for ___________ shares of
the Company's Common Stock, free and clear of any encumbrances, duly
endorsed, having a Fair Market Value (as such term is defined in Section
7.3.3 of the Stock Option Agreement) of $---------.
I hereby represent and warrant to, and agree with, the Company
that:
(i) I am acquiring the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
(ii) I have received a copy of the Plan and all reports and documents
required to be filed by the Company with the Commission pursuant to the Exchange
Act within the last 24 months and all reports issued by the Company to its
shareholders;
(iii) I understand that I must bear the economic risk of the investment in
the Option Shares, which cannot be sold by me unless they are registered under
the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
(iv) I agree that I will not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by me hereby except in accordance with
Company's policy, if any, regarding the sale and disposition of securities owned
by employees and/or directors of the Company;
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(v) in my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(vi) I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
(vii) the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate
have been acquired for investment and have not
been registered under the Securities Act of
1933. The shares may not be sold or
transferred in the absence of such
registration or an exemption therefrom under
said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
------------------------------ ----------------------------------------
(Signature) (Address)
------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
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