EXHIBIT 99.02
FORM OF
STOCK OPTION AGREEMENT
NON-INCENTIVE STOCK OPTIONS
AGREEMENT made as of the day of November, 1995 between VITAFORT
INTERNATIONAL CORPORATION, a Delaware corporation (hereinafter referred to as
the "Company"), and _______________, an individual residing at _________________
(hereinafter referred to as the "Optionee").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has adopted the
Vitafort International Corporation 1995 Stock Option Plan (the "Plan"),
permitting the grant of stock options to officers, directors and other key
persons employed or retained by the Company or its subsidiaries or any parent
corporation of the Company. The stockholders of the Company have adopted the
Plan by the written consent of the holders of a majority of the issued and
outstanding shares of the Company's common stock, par value $.0001 per share,
("Common Stock") and an Information Statement, dated October 20, 1995 (the
"Information Statement"), has been mailed to the record holders of the Common
Stock. The Optionee is presently an officer, director, employee or consultant
of the Company. The Company is desirous of increasing the incentive of the
Optionee to exert Optionee's utmost efforts to improve the business and increase
the assets of the Company.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Optionee hereby agree as follows:
1. GRANT OF OPTION. Pursuant to a determination by the Board of
Directors, the Company, subject to the terms of the Plan, a copy of which has
been delivered to the Optionee, completion of stockholder ratification of the
adoption of the Plan, the Company's satisfaction of certain equity financing
requirements set forth in its Information Statement, a copy of which has been
delivered to the undersigned, and this Agreement, hereby grants to the Optionee,
as a matter of separate inducement and agreement, and in addition to and not in
lieu of salary or other compensation for services, the right to purchase
(hereinafter referred to as the "Option") an aggregate of shares of
Common Stock of the Company, on the terms and conditions herein set forth,
subject to adjustment as provided in Section 8 hereof.
2. PURCHASE PRICE. The purchase price of the shares of Common Stock
covered by the Option will be $.15 per share, such being the average of the
closing bid and asked price of the Common Stock as reflected on the Electronic
Bulletin Board maintained by NASDAQ on the date of this grant, subject to
adjustment as provided in Section 8 hereof.
3. EXERCISE OF OPTION.
(a) The Option shall become exercisable as follows: As to one-
third of the shares covered by this Option, on January 1, 1996 and as to an
additional one third on each succeeding January 1, provided that in no event
shall any portion of this option become exercisable unless a registration
statement covering the issuance of shares upon exercise of his Option, be made
effective in accordance with the rules of the Securities and Exchange
Commission.
(b) The Option may be exercised pursuant to the provisions of
this Section 3, by notice and payment to the Company as provided in Sections 9
and 14 hereof.
4. TERM OF OPTION.
(a) The term of the Option shall be a period expiring at 5:00
P.M. on ____________________ subject to earlier termination or cancellation as
provided herein. Except as otherwise provided in Sections 6 and 7 hereof, the
Option will not be exercisable unless the Optionee shall, at the time of
exercise, be an officer, director, employee or provider of services to the
Company or any of its subsidiaries.
(b) As used in this Agreement, the term "subsidiary" refers to
and includes each "subsidiary corporation" within the meaning of the term as
defined in Section 425(f) of the Internal Revenue Code of 1986, as amended.
(c) The holder of the Option will not have any rights to
dividends or any other rights of a stockholder with respect to any shares of
Common Stock subject to the Option until such shares shall have been issued to
such holder (as evidenced by the appropriate entry on the books of a duly
authorized transfer agent of the Company); provided that the date of issuance
shall not be earlier than the Closing Date (as hereinafter defined) with respect
to such shares pursuant to Section 9 hereof, upon purchase of such shares upon
exercise of the Option.
5. NON-TRANSFERABILITY OF OPTION. The Option shall not be
transferable otherwise than by will or by the laws of descent and distribution,
and the Option may be exercised during the lifetime of the Optionee only by him.
More particularly, but without limiting the generality of the foregoing, the
Option may not be assigned, transferred or otherwise disposed of, or pledged or
hypothecated in any way (whether by operation of law or otherwise), and shall
not be subject to execution, attachment or other process. Any assignment,
transfer, pledge, hypothecation or other disposition of the Option attempted
contrary to the provisions of this Agreement, or any levy of execution,
attachment or other process attempted upon the Option, shall be null and void
and without effect. Any attempt to make any such assignment, transfer, pledge,
hypothecation or other disposition of the Option or any attempt to make any such
levy of execution, attachment or other process shall cause the Option to
terminate immediately upon the happening of any such event if the Board of
Directors of the Company, at any time, should, in its sole discretion, so elect,
by written
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notice to the Optionee or to the person or persons then entitled to exercise the
Option under the provisions of Section 7 hereof; provided, however, that any
such termination of the Option under the foregoing provisions of this Section 5
will not prejudice any rights or remedies that the Company or any subsidiary
thereof may have under this Agreement or otherwise.
6. EXERCISES UPON CESSATION
OF EMPLOYMENT OR ASSOCIATION.
(a) If the Optionee ceases to serve as an employee or officer of
or provider of services to the Company or any of its subsidiaries by reason of
Optionee's discharge by reason of dishonesty or wrongful conduct, the Option
will forthwith terminate. If, however, the Optionee for any other reason (other
than death) ceases to serve as an employee, officer or provider of services of
or to the Company or its subsidiaries, the Option may, subject to the provisions
of Section 5 hereof, be exercised to the same extent the Optionee would have
been entitled under Section 3 hereof to exercise the Option on the date of such
cessation of employment or other association, at any time within three (3)
months after such cessation of employment or other association, at the end of
which period the Option shall terminate. In any event, the Option may not be
exercised after the expiration of the term provided in Section 4 hereof.
(b) The Option shall not be affected by any change of duties of
the Optionee so long as he continues to serve as an employee, officer, director
or provider of services to or of the Company or any subsidiary thereof. If the
Optionee is granted a temporary leave of absence, such leave of absence will be
deemed a continuation of his service to the Company or any subsidiary thereof
for the purposes of this Agreement, but only if and so long as the corporation
for which such service is rendered in its sole discretion consents thereto.
(c) Any termination of this Option by reason of cessation of
service, whether under this Section 6 or Section 7 hereof, shall be without
prejudice to any rights or remedies that the Company or any subsidiary thereof
may have against the Optionee hereunder or otherwise.
7. EXERCISE UPON DEATH OR DISABILITY. If the Optionee dies at a
time when this option is exercisable under the provisions of Section 6 hereof or
becomes incapacitated or incompetent and is not able to manage his affairs, the
Option may, subject to the provisions of Section 5 hereof, be exercised, to the
extent the Optionee would have been entitled under Section 3 hereof to exercise
the Option on the day preceding the date of Optionee's death, by the estate of
the Optionee or by the person or persons (including the estate of any such
person or persons who have died) who acquire the right to exercise the Option by
bequest or inheritance at any time within the period ending on the last to occur
of: (i) six (6) months after the death of the Optionee and (ii) three (3) months
after the appointment of an administrator executor or other fiduciary of the
estate or affairs of the Optionee, at the end of which period
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the Option shall terminate. In any event, the Option may not be exercised after
the expiration of the term provided in Section 4 hereof.
8. ADJUSTMENTS. In the event of a stock dividend, stock split-up,
share combination, exchange of shares, re-capitalization, merger, consolidation,
acquisition or disposition of property or shares, reorganization, liquidation or
other similar changes or transactions of or by the Company, the Board of
Directors of the Company shall make (or shall undertake to have the Board of
Directors of any corporation that merges with, or acquires the stock or assets
of, the Company make) such adjustment of the number or class of shares then
covered by the Option, or of the option price, or both, as it shall, in its sole
discretion, deem appropriate to give proper effect to such event; provided,
however, that no such adjustment shall be made so as to constitute a
modification, extension or renewal of the Option within the meaning of Section
424(h) of the Internal Revenue Code of 1986, as amended (the "Code"), or so as
to prevent the Company or any other corporation or a subsidiary thereof, if the
Optionee shall become employed by such corporation by reason of the transaction
in respect of which such adjustment is made, from being a corporation issuing or
assuming the Option in a transaction to which Section 424(a) of the Code
applies.
9. METHOD OF EXERCISE OF OPTION.
(a) Subject to the terms and conditions of this Agreement, the
Option shall be exercisable by notice and payment to the Company in accordance
with the procedure prescribed herein. Each such notice shall:
(i) state the election to exercise the Option and the number of
shares in respect of which it is being exercised;
(ii) contain a representation and agreement as to investment intent
and other matters, if required by counsel to the Company with respect to
such shares, in form satisfactory to counsel for the Company; and
(iii) be signed by the person or persons entitled to exercise the
Option and, if the Option is being exercised by any person or persons other
than the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option.
(b) Upon receipt of such notice, the Company shall specify, by
written notice to the Optionee, a date and time (such date and time being herein
called the "Closing Date") and place for payment of the full purchase price of
such shares. The Closing Date shall be not more than fifteen (15) days from the
date the notice of exercise is received by the Company unless another date is
agreed upon by the Company and the Optionee or is required upon advice of
counsel for the Company in order to meet the requirements of Section 11 hereof.
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(c) Payment of the purchase price of any shares of Common Stock,
in respect of which the Option shall be exercised, shall be made by the Optionee
at the place specified by the Company on or before the Closing Date by
delivering to the Company a certified or bank cashier's check in the amount of
such purchase price payable to the order of the Company. In lieu of the
foregoing method of payment, with the consent of the Board of Directors the
Optionee may elect to deliver either a bank or certified check equal to the
aggregate purchase price of the Shares. The Option shall be deemed to have been
exercised with respect to any particular shares of Common Stock if, and only if,
the preceding provisions of this Section 9 and the provisions of Section 10
hereof shall have been complied with, in which event the Option shall be deemed
to have been exercised on the Closing Date. Anything in this Agreement to the
contrary notwithstanding, any notice of exercise given pursuant to the
provisions of this Section 9 shall be void and of no effect if all the preceding
provisions of this Section 9 and the provisions of Section 11 hereof shall not
have been complied with. The certificate or certificates for shares of Common
Stock as to which the Option shall be exercised shall be registered in the name
of the Optionee or, if the Optionee so requests in the notice exercising the
Option, shall be registered in the name of the Optionee and another person
jointly, with right of survivorship, and shall be delivered on the Closing Date
to the Optionee at the place specified for the closing, but only upon compliance
with all of the provisions of this Agreement. If the Optionee fails to accept
delivery of and pay for all or any part of the number of shares specified in
such notice upon tender or delivery thereof on the Closing Date, Optionee's
right to exercise the Option with respect to such undelivered shares may be
terminated in the sole discretion of the Board of Directors of the Company. The
Option may be exercised only with respect to full shares.
10. APPROVAL OF COUNSEL. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Company's counsel of all legal matters in connection therewith,
including compliance with the requirements of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, and the requirements of any stock exchange upon which
the Common Stock may then be listed.
11. RESALE OF COMMON STOCK.
(a) Upon any sale or transfer of the Common Stock purchased upon
exercise of the Option, the Optionee shall deliver to the Company an opinion of
counsel satisfactory to the Company to the effect that either (i) the Common
Stock to be so sold or transferred has been registered under the Securities Act
of 1933, as amended, and that there is in effect a current prospectus meeting
the requirements of Subsection 10(a) of said Act, which is being or will be
delivered to the purchaser or transferee at or prior to the time of delivery of
the certificates evidencing the Common Stock to be sold or transferred, or (ii)
such Common Stock may then be sold without violating Section 5 of said Act.
(b) The Common Stock issued upon exercise of the Option shall
bear the following legend if required by counsel for the Company:
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THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNLESS, IN THE OPINION OF
COUNSEL FOR THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.
12. RESERVATION OF SHARES. The Company shall at all times
during the term of the Option reserve and keep available such number of shares
of the class of stock then subject to the Option as will be sufficient to
satisfy the requirements of this Agreement.
13. LIMITATION OF ACTION. The Optionee and the Company each
acknowledge that every right of action accruing to the Optionee or Company, as
the case may be, and arising out of or in connection with this Agreement against
the Company or any subsidiary thereof, on the one hand, or against the Optionee,
on the other hand, shall, irrespective of the place where an action may be
brought, cease and be barred by the expiration of one (1) year from the date of
the act or omission in respect of which such right of action arises.
14. NOTICES. Each notice relating to this Agreement shall be in
writing and delivered in person or by certified or registered mail, return
receipt requested, or by nationally recognized overnight courier service
providing for a signed return receipt, to the proper address. All notices to
the Company shall be addressed to it at 0000 Xxxxxx xx xxx Xxxxx - Xxxxx 000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Corporate Secretary. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect, effective upon actual receipt thereof. If the Company shall
file a periodic report on Form 10-Q or 10-K or any successor form with the
Securities and Exchange Commission which indicates a new address for its
principal office, such filing shall also be deemed a notice to the Optionee of
such new address.
15. SEVERABILITY. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal or unenforceable, such
illegality or unenforceability shall not affect the legality or enforceability
of the remaining legal and enforceable provisions hereof, which shall be
constructed as if such illegal or unenforceable provision or provisions had not
been inserted.
16. CONFLICTING PROVISIONS. In the event of any conflict
between any provision of this Agreement and the Plan, the relevant provision of
the Plan shall control. In the event of any conflict between the provisions of
this Agreement and any employment agreement (the "Employment Agreement") which
may exist between Optionee and the Company or a subsidiary of the Company, the
relevant provisions of the Employment Agreement shall control unless such
provisions are inconsistent with the provisions of the Plan.
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17. GOVERNING LAW. This Agreement will be construed and
governed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By:
------------------------------
Xxxx Xxxxxxx, President
------------------------------
Optionee
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SCHEDULE OF GRANTS
NAME NUMBER OF OPTIONS
Xxxx Xxxxxxx 3,000,000
Xxxxxxx Xxxxxxxx 4,000,000
Xxxxxxx X. Xxxxxxxx 3,000,000
Xxxxxx Xxxx 3,000,000
Xxxxxxx Xxxx 1,000,000
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