EXHIBIT 2B
NON-QUALIFIED STOCK OPTION AGREEMENT
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This Option Agreement (the "Agreement") made and effective as of the 11th
day of April, 1997, between BUFFTON CORPORATION, a Delaware corporation (the
"Corporation"), and XXXX-XXXXXX XXXXXX, an employee of the Corporation or one
or more of its Subsidiaries (the "Employee").
WHEREAS, pursuant to Employee becoming employed by Corporation as the
Corporation's President and Chief Operating Officer pursuant to that certain
Employment Agreement between Corporation and Employee of even date herewith (the
"Employment Agreement"), the Corporation desires to afford Employee the
opportunity to purchase shares of Corporation's $.05 par value common stock as
an incentive for future performance to the Corporation.
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 Corporation hereby grants to the Employee the
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right and option (the "Option") to purchase an aggregate of 250,000 shares of
Corporation's $.05 par value common stock (the "Shares"), such Shares being
subject to adjustment as provided in paragraph 7 hereof, and on the terms and
conditions herein set forth.
2. Purchase Price. The purchase price of the Shares covered by the
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Option shall be $3.00 per Share.
3. Term of Option. The term of the Option shall be for a period of five
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(5) years from the date hereof subject to earlier termination pursuant to
paragraph 5 hereof.
4. Exercise of Option. From and after the date hereof, the Option shall
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be fully exercisable, in whole or in part, for the remaining term of the Option.
The Option granted herein shall be exercisable only by the Employee, the
Administrator or Executor of the Estate of the Employee, the heirs of the
Employee taking title to the Option pursuant to the Employee's Will or the laws
of descent and distribution, a court appointed guardian of the Employee, or by
power of attorney duly appointed by the Employee.
5. Termination of Employment. In the event Employee's employment with
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the Corporation (which term includes subsidiaries of the Corporation) is
terminated "for cause', as hereinafter defined, by the Corporation or is
terminated for any reason by Employee (except if terminated by Employee for
failure of the sale of substantially all of the assets of Corporation's wholly
owned subsidiary Current Technology, Inc., to close prior to August 31, 1997)
then the Option granted under this Agreement, or any unexercised portion
thereof, shall terminate and be unexercisable as of the effective date of such
termination of employment if by Corporation or the date notice of termination is
given, if by Employee. For purposes of this provision, the term "for cause"
shall mean (a) the failure or refusal to perform diligently the duties of
Employee's employment after written notice of such failure or refusal and a
reasonable opportunity to remedy such has been provided, (b) the conviction of
an offense involving moral turpitude which, in the judgment of the Board of
Directors of EMPLOYER might bring discredit on EMPLOYER. In addition, if
Employee violates any noncompete, nondisclosure, or nonsolicitation of
Corporation's employees
covenants in any written employment agreement with Corporation, or any
subsidiary or affiliate of Corporation, then this Option shall terminate upon
date of such breach. The determination of whether or not Employee has breached
any noncompete, nondisclosure, or nonsolicitation of Corporation's employees
covenants and the date of such breach shall be made by Corporation and such
determination shall be binding upon Employee unless, within thirty (30) days
after the Corporation notifies Employee of such determination, Employee invokes
the mandatory arbitration provisions in Section 12 hereof, in which case, the
decision of the arbitrator shall control. Employee shall not exercise any
options hereunder between the date Employee is notified of termination and the
date, if any, on which Employee invokes the arbitration provisions. If Employee
invokes the arbitration provisions, and if Employee exercises any options
hereunder after such invocation, Employee will deliver the stock (or proceeds
from the sale of the stock) to the arbitrator to be held in escrow pending a
final decision by the arbitrator, with the stock and proceeds to be delivered to
Corporation by the arbitrator if the arbitrator makes the determination that the
termination by Corporation was proper.
6. Transferability of Option. This Option may not be transferred by
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Employee by Will, by the laws of descent and distribution, or otherwise. Upon
the death of Employee, Employee's estate shall have 180 days from the date of
Employee's death to exercise the Option. If Employee's estate fails to exercise
the Option within this time period, the Option shall terminate.
7. Anti-Dilution Provisions.
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(a) In case at any time or from time to time after the date of this
Option, the holders of common stock of the Corporation shall have received or
shall have become legally entitled to receive,
(i) other or additional stock or other securities or property (other
than cash) by way of a dividend or other distribution, or
(ii) other or additional (or less) stock or other securities or
property (including cash) by way of stock-split, spin-off, split-up,
reclassification, combination of shares or similar corporate rearrangements,
then and in each such case the holder of this Option, upon the exercise hereof
as provided
herein, shall be entitled to receive, in lieu of (or in addition to, as the case
may be) the Shares theretofore receivable upon the exercise of this Option, the
amount of stock and other securities and property (including cash in the case
referred to in clause (ii) above) which such holder would have held on the date
of such exercise if on the date such dividend, distribution, corporate
rearrangement or such other event as described in clause (ii) above such holder
had been the holder of record of the number of Shares receivable upon the
exercise of this Option and had thereafter, during the period from the date
thereof to and including the date of such exercise, obtained such Shares and all
other or additional (or less) stock and other securities and property (including
cash in the case referred to in clause (ii) above) receivable by him as
aforesaid during such period, giving effect to all adjustments called for during
such period by the following subparagraph.
(b) In case of any reorganization of the Corporation (or any other
corporation the stock or other securities of which are at the time receivable on
the exercise of this Option) after the date hereof, or in case, after such date,
the Corporation (or any such other corporation) shall consolidate, amalgamate or
merge with or into or enter into a mandatory share exchange with another entity,
then and in each such case the holder of this Option, upon the exercise hereof
as provided herein at any time after the consummation of such reorganization,
consolidation, amalgamation, merger, mandatory share exchange, or conveyance,
shall be entitled to receive, and any third parties participating in such
transaction shall acknowledge in writing that the holder is entitled to receive,
in lieu of the Shares, stock or other securities and property receivable upon
the exercise of this Option prior to such consummation, the stock or other
securities or property to which such holder would have been entitled upon such
consummation if such holder had exercised this Option immediately prior thereto,
all subject to further adjustment as provided in the preceding subparagraph (a).
(c) So long as this Option shall be outstanding and unexercised, if the
Corporation shall enter into any transactions referred to in this Section 7,
which effects a change in the securities, other property or any cash
distribution to which the holder is entitled upon exercise of this Option, then,
in any such case, the Corporation shall cause to be sent to the holder a brief
statement of the event giving rise to such effect, and a description thereof,
together with advance notice of the record date relevant to any such
transaction.
8. Rights as a Shareholder. The Employee or Employee's permitted
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transferee shall have no rights as a stockholder with respect to any Shares
covered by the Option until the date of issuance of a stock certificate for such
Shares. No adjustments, other than as provided in paragraph 6 above, shall be
made for dividends (ordinary or extraordinary, whether in cash, securities, or
other property) or distributions for which the record date is prior to the date
such stock certificate is issued.
9. Conditions to Issue. The Option granted herein is subject to the
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requirement that, if at any time the listing, registration, or qualification of
Shares issuable upon exercise of the Option is required by any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary as a condition of, or in connection
with the issuance of any Shares, no Shares shall be issued in whole or in part,
unless such listing, registration, qualification, consent or approval has been
obtained. The Corporation agrees, at its own expense, to take all action
necessary to obtain such listing, registration, qualification, consent or
approval so the Corporation can perform its contractual obligation to issue the
Shares covered by this Option.
10. Method of Exercising Option. Subject to the terms and conditions of
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this Agreement, the Option may be exercised by written notice delivered in
person or by first class mail to the Secretary of the Corporation at its offices
which are presently located at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxx
00000. Such notice shall state the election to exercise the Option and the
number of Shares in respect of
which it is being exercised, and shall be signed by the person or persons so
exercising the Option. Such notice shall be accompanied by payment of the full
purchase price of such Shares, in which event the Corporation shall deliver a
certificate or certificates representing such Shares as soon as practicable
after the notice shall be received.
Payment of such purchase price shall, in either case, be made in cash or
cashier's, certified or personal check payable to the order of the Corporation.
The certificate or certificates for the Shares as to which the Option shall have
been so exercised shall be registered in the name of the person or persons so
exercising the Option; or if the Option shall be exercised by the Employee, and
if the Employee shall so request in the notice exercising the Option, such
Option shall be registered in the name of the Employee and another person, as
joint tenants with right of survivorship, and shall be delivered as provided
above to or upon the written order of the person or persons other than the
Employee, such notice shall be accompanied by appropriate proof satisfactory to
the Corporation of the right of such person or persons to exercise the Option.
All shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable. Upon the exercise of less than
all of the Options hereunder, the Corporation shall promptly execute and deliver
a new Option Agreement in the form hereof covering the balance of unexercised
Options. The Corporation shall pay all expenses incurred by it in connection
with the preparation, issuance and delivery of such new Option Agreements.
11. Non-Qualified Options. The Options granted hereunder are not part of
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or authorized pursuant to any plan or arrangement which is qualified or created
incident to any provision of the Internal Revenue Code of 1986, as amended.
12. Arbitration. In the event of a dispute arising out of or relating to
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this Agreement, or relating to any claim or cause of action which may arise or
be asserted under any federal, state or local statutory,
regulatory or common law, including, without limitation, claims of
discrimination, breach of contract or tort, such as intentional infliction of
emotional distress, then, upon notice by any party to the other party (an
"Arbitration Notice") and to American Arbitration Association ("AAA"), 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 [telephone (000) 000-0000; fax (212)
000-0000], the controversy or dispute shall be submitted to a sole arbitrator
who is independent and impartial, for binding arbitration in Fort Worth, Texas,
in accordance with AAA's Commercial Arbitration Rules (the "Rules"). The parties
agree that they will faithfully observe this agreement and the Rules and that
they will abide by and perform any award rendered by the arbitrator. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. Section
1-16 (or by the same principles enunciated by such Act in the event it may not
be technically applicable). The award or judgment of the arbitrator shall be
final and binding on all parties and enforced by any court having jurisdiction.
If any party becomes the subject of a bankruptcy, receivership or other similar
proceeding under the laws of the United States of America, any state or
commonwealth or any other nation or political subdivision thereof, then, to the
extent permitted or not prohibited by applicable law, any factual or substantive
legal issues arising in or during the pendency of any such proceeding shall be
subject to all of the foregoing mandatory arbitration provisions and shall be
resolved in accordance therewith. The agreements contained herein have been
given for valuable consideration, are coupled with an interest and are not
intended to be executory contracts. The fees and expenses of the arbitrator will
be shared equitably and ratably (as determined by the arbitrator) by all parties
engaged in the dispute or controversy.
Promptly after the Arbitration Notice is given, AAA will select five
possible arbitrators, to whom AAA will give the identities of the parties and
the general nature of the controversy. If any of those arbitrators disqualifies
himself or declines to serve, AAA shall continue to designate potential
arbitrators
until the parties have five to select from. After the panel of five potential
arbitrators has been completed, a two page summary of each of the potential
arbitrators will be given to each of the parties, and the parties will have a
period of 10 days after receiving the summaries in which to attempt to agree
upon the arbitrator to conduct the arbitration. If the parties are unable to
agree upon an arbitrator, then one of the parties shall notify AAA, and AAA
shall select the arbitrator from one of the five. The decision of AAA with
respect to the selection of the arbitrator will be final and binding.
Within 10 days after the selection of the arbitrator, the parties and their
council will appear before the arbitrator at a price an time designated by the
arbitrator for the purpose of each party making a one hour or less presentation
and summary of the case. Thereafter, the arbitrator will set dates and times
for additional hearings until the proceeding is concluded. The desire and goal
of the parties is, and the arbitrator will be advised that his goal should be,
to conduct and conclude the arbitration proceeding as expeditiously as possible.
If any party or his council fails to appear at any hearing, the arbitrator shall
be entitled to reach a decision based on the evidence which has been presented
to him by the parties who did appear.
13. Subsidiary. As used herein, the term "Subsidiary" shall mean any
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present or future corporation in which the Corporation shall own 50% or more of
its accrued voting stock.
14. Severability. Each provision of this Agreement is intended to be
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severable from the others so that if any provision or term hereof is illegal or
invalid (Pounds)or any reason whatsoever, such illegality or invalidity shall
not affect the validity of the remaining provisions and terms hereof.
15. Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the respective heirs, executors, administrators and successors of the
parties hereto.
16. Governing Law. This Agreement shall be construed and interpreted in
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accordance with the laws of the State of Delaware.
17. Headings. Headings are for the convenience of the parties and are not
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deemed to be part of this Agreement.
EXECUTED as of the day and year first written above.
EMPLOYER: BUFFTON CORPORATION:
By: /S/ Xxxxxx XxXxxx
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Chairman of the Board and
President
EMPLOYEE:
/S/Xxxx-Xxxxxx Xxxxxx
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XXXX-XXXXXX XXXXXX, Individually
