NON-QUALIFIED STOCK OPTION AGREEMENT
U.S. HOME & GARDEN INC.
AGREEMENT made as of this ____ day of____, 199_ between U.S.
Home & Garden Inc. (the "Company"), a Delaware corporation, having a principal
place of business in San Francisco, California, and ________________ (the
"Grantee") residing at ________________________, _______________, California
---------.
WHEREAS, the Company desires to grant to the Grantee a
Non-Qualified Option to purchase _________ shares (the "Shares") of its common
stock, $.001 par value per share (the "Common Stock"), under and for the
purposes of the 199_ Stock Option Plan of the Company (the "Plan") pursuant to
the terms thereof;
WHEREAS, the Company and the Grantee understand and agree
that unless otherwise defined herein any terms used herein have the same
meanings as in the Plan.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to the Grantee
the right and option to purchase all or any part of an aggregate of
______________________ (_____) shares of its Common Stock, $.001 par value, on
the terms and conditions and subject to all the limitations set forth herein
and in the Plan, which is incorporated herein by reference. The Grantee
acknowledges
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receipt of a copy of the Plan.
2. Purchase Price. The purchase price of the Shares covered
by the Option (the "Purchase Price") shall be $____ per share.
3. Exercise of Option. The Option granted hereby shall be
exercisable commencing on the date of this Agreement.
4. Term of Option. The Option shall terminate five (5) years
from the date of this Agreement, but shall be subject to earlier termination
as provided herein or in the Plan.
If the Grantee ceases to be employed by the Company for any
reason other than death, termination for cause, or voluntary termination
without the consent of the Company, the Option may be exercised within thirty
(30) days after the date the Grantee ceases to be an employee, or within five
(5) years from the granting of the Option, whichever is earlier, but may not
be exercised thereafter. In such event, the Option shall be exercisable only
to the extent that the right to purchase Shares under the Plan has accrued and
is in effect at the date of such cessation of employment.
In the event of disability of the Grantee (as determined by
the Board of Directors of the Company or the 199_ Stock Option Plan Committee
of the Company; as the case may be, and as to the fact and date of which the
Grantee is notified by the Board or that Committee, as the case may be, in
writing), the Option shall be exercisable within thirty (30) days after the
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date of such disability or, if earlier, the term originally prescribed by this
Agreement. In such event, the Option shall be exercisable to the extent that
the right to purchase the Shares hereunder has accrued on the date the Grantee
becomes disabled and is in effect as of such determination date.
In the event of the death of the Grantee while an employee
of the Company or within thirty (30) days after the termination of employment
(other than termination for cause or without the consent of the Company), the
Option shall be exercisable to the extent exercisable but not exercised as of
the date of death and in such event, the Option must be exercised, if at all,
within one (1) year after the date of death of the Grantee or, if earlier,
within the originally prescribed term of the Option.
5. Non-Assignability. The Option shall not be transferable
by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable, during the Grantee's lifetime, only by
the Grantee. The Option shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of the Option or of any rights
granted hereunder contrary to the provisions of this Section 5, or the levy of
any attachment or similar process upon the Option or such right, shall be null
and void.
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6. Exercise of Option and Issue of Shares.
5.1 Cash Exercise. 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 to the Company, together with the tender of the
Purchase Price of the Shares covered by the Option. 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, shall contain any
warranty required by Section 7 below and shall otherwise comply with the terms
and conditions of this Agreement and the Plan. The Company shall pay all
original issue taxes with respect to the issue of the Shares pursuant hereto
and all other fees and expenses necessarily incurred by the Company in
connection herewith. Except as specifically set forth herein, the Grantee or
other holder of this Option acknowledges that any income or other taxes due
from him with respect to this Option or the Shares issuable pursuant to this
Option shall be the responsibility of the holder. The holder of this Option
shall have rights as a shareholder only with respect to any Shares covered by
the Option after due exercise of the Option and tender of the full purchase
price for the shares being purchased pursuant to such exercise.
5.2 Cashless Exercise. At any time prior to the
expiration of the term of the Option specified in Section 4
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hereof, the holder of this Option may, at its option, exchange this Option, in
whole or in part (an "Option Exchange ") into the number of shares of Common
Stock determined in accordance with this Subsection 5.2, by surrendering this
Option at the principal office of the Company, accompanied by a notice stating
such holder's intent to effect such exchange, the number of Shares to be
exchanged and the date on which the holder requests that such Option Exchange
occur (the "Notice of Exchange"). The Option Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for
the Shares issuable upon such Option Exchange and, if applicable, a new Option
of like tenor evidencing the balance of the Shares remaining subject to this
Option, shall be issued as of the Exchange Date and delivered to the holder
within three (3) days following the Exchange Date. In connection with any
Option Exchange, this Option shall represent the right to subscribe for and
acquire the number of shares of Common Stock (rounded to the next highest
integer) equal to (i) the number of Shares specified by the holder in its
Notice of Exchange (the "Total Number") less (ii) the number of shares of
Common Stock equal to the quotient obtained by dividing (A) the product of the
Total Number and the existing Purchase Price by (B) the current Market Price
of a share of Common Stock (as hereinafter defined). As used herein, the
phrase "Market Price" at any date shall be deemed to be the
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last reported sale price, or, in case no such reported sale takes place on
such day, the average of the last reported sale prices for the last three
trading days, in either case as officially reported by the principal
securities exchange on which the Common Stock is listed or admitted to trading
or as reported in the NASDAQ SmallCap Market or National Market System, or, if
the Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on the NASDAQ SmallCap Market or National Market
System, the closing bid price as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or similar organization if NASDAQ is
no longer reporting such information, or if the Common Stock is not quoted on
NASDAQ, as determined in good faith by resolution of the Board of Directors of
the Company, based on the best information available to it for the two days
immediately preceding such issuance or sale and the day of such issuance or
sale.
7. Purchase for Investment. Unless the offering and sale of
the Shares to be issued upon the particular exercise of the Option shall have
effectively registered under the Securities Act of 1933, as now in force or
hereafter amended, or any successor legislation (the "Act"), the Company shall
be under no obligation to issue the Shares covered by such exercise unless and
until the following conditions have been fulfilled:
(a) The person(s) who exercise the Option shall
warrant to the Company, at the time of such exercise, that such
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person(s) are acquiring such Shares for his or her own account, for investment
and not with a view to, or for sale in connection with, the distribution of
any such Shares, in which event the person(s) acquiring such Shares shall be
bound by the provisions of the following legend or a substantially similar
legend which shall be endorsed upon the certificate(s) evidencing their option
Shares issued pursuant to such exercise:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). Such shares may not be sold, transferred or
otherwise disposed of unless they have first been registered
under the Act or, unless, in the opinion of counsel
satisfactory to the Company's counsel, such registration is
not required."
(b) The Company shall have received an opinion of
its counsel that the Shares may be issued upon such particular exercise in
compliance with the Act without registration thereunder. Without limiting the
generality of the foregoing, the Company may delay issuance of the Shares
until completion of any action or obtaining of any consent, which the Company
deems necessary under any applicable law (including without limitation state
securities or "blue sky" laws).
8. Notices. Any notices required or permitted by the terms
of this Agreement or the Plan shall be given by registered or certified mail,
return receipt requested, addressed as follows:
To the Company: U.S. Home & Garden Inc.
000 Xxxxxxxxxx Xxxxxx - Suite 830
-7-
San Francisco, California 94111
Attention: President
To the Grantee: Mr/Ms________
________________________________
____________, California _______
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. Either party hereto may
change the addresses to which notices hereunder may be given by providing the
other party hereto with written notice of such change.
9. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware.
10. Benefit of Agreement. This Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Grantee has hereunto set
his hand, all as of the day and year first above written.
U.S. HOME & GARDEN INC.
By: ______________________________
______________________________
________________, Grantee
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