Exhibit 10.40
FORM OF
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of February 27, 1997 between AMBASSADOR
EYEWEAR GROUP, INC., a Delaware corporation (the "Company") and XXXXXX XXXX
(hereinafter referred to as the "Optionee").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue stock options (the "Options") to
Optionee to purchase 180,833 shares (the "Shares") of Common Stock of the
Company, $.01 par value per share (the "Common Stock"); and
NOW, THEREFORE, in consideration of the agreements herein set forth and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Optionee is hereby granted the right to purchase, at
any time from February 27, 1997 until February 26, 2002 at 5:00 p.m., New
York time (the "Option Exercise Term"), 180,833 Shares at an initial exercise
price (subject to adjustment as provided in Article 7 hereof) of $3.00 per
Share.
2. Option Certificate. An option certificate (the "Option
Certificate") shall be delivered to Optionee pursuant to this Agreement in
the form set forth in Exhibit A attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other variations as
required or permitted by this Agreement
3. Exercise of Options. The Options are exercisable at a price of
$3.00 per share of Common Stock payable in cash or by certified check to the
order of the Company, subject to adjustment as provided in Article 7 hereof.
Upon surrender of the Option Certificate with the Form of Election, attached
hereto as Exhibit B, duly executed, together with payment of the Exercise
Price (as hereinafter defined) for the Shares at the Company's principal
executive offices, the registered holder of the Option Certificate ("Holder")
shall be entitled to receive a certificate or certificates for the Shares so
purchased. The purchase rights represented by each Option Certificate are
exercisable at the option of the Holder hereof, in whole or in part (but not
as to fractional Shares). In the case of the purchase of less than all the
Shares, the Company shall cancel said Option Certificate upon the surrender
thereof and shall execute and deliver a new Option Certificate of like tenor
for the balance of the Shares.
4. Issuance of Certificates. Upon the exercise of the Options, the
issuance of certificates for the Shares purchased shall be made forthwith
(and in any event within three business days thereafter) without charge to
the Holder thereof including, and such certificates shall (subject to the
provisions of Article 5 hereof) be issued in the name of, or in such names as
may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance
and delivery of any such certificates and the Company shall not be required
to issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
The Option Certificate and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman or Vice Chairman of the Board
of Directors or President or Vice President of the Company under its
corporate seal reproduced thereon, attested to by the manual or facsimile
signature of the present or any future Secretary or Assistant Secretary of
the Company.
Upon exercise, in part or in whole, of the Options, certificates
representing the Shares purchased (collectively, the "Option Securities"),
shall bear a legend substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered or sold except (i) pursuant to an
effective registration statement under the Act, (ii) to the
extent applicable, pursuant to Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of
securities), or (iii) upon the delivery by the holder to the
Company of an opinion of counsel, reasonably satisfactory to
counsel to the Company, stating that an exemption from
registration under such Act is available."
5. Restriction on Transfer of Options. The Holder of the Option
Certificate, by its acceptance thereof, covenants and agrees that the Options
are being acquired as an investment and not with a view to the distribution
thereof.
6. Price.
6.1. Initial and Adjusted Exercise Price. The initial exercise
price of each Option shall be $3.00 per Share. The adjusted exercise price
shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions
of Article 7 hereof.
6.2. Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price, depending upon the
context.
7. Adjustments of Exercise Price and Number of Securities. The
following adjustments apply to the Exercise Price of the Options with respect
to the Shares and the number of Shares purchasable upon exercise of the
Options. In the event the Exercise Price per Share and/or the number of
Shares so purchasable is adjusted, then the Exercise Price of the Options
shall be adjusted in the same proportion.
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7.1. Computation of Adjusted Price. In case the Company shall at
any time after the date hereof pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock, then upon such dividend or
distribution the Exercise Price in effect immediately prior to such dividend
or distribution shall forthwith be reduced to a price determined by dividing:
(a) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution
multiplied by the Exercise Price in effect immediately prior to such dividend
or distribution, by
(b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance
with the provisions of this Section 7.1, the Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution.
7.2. Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
7.3. Adjustment in Number of Securities. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Article 7, the number
of Shares issuable upon the exercise of each Option shall be adjusted to the
nearest full number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of the Options immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
7.4. Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result
of a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of
the property of the Company as an entirety, the Holder shall thereafter have
the right to purchase the kind and number of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder were the owners of
the Shares immediately prior to any such events, at a price equal to the
product of (x) the number of shares of Common Stock issuable upon exercise of
the Holder's Options and (y) the Exercise Price in effect immediately prior
to
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the record date for such reclassification, change, consolidation, merger,
sale or conveyance as if such Holder had exercised the Options.
7.5. Determination of Outstanding Shares of Common Stock. The
number of shares of Common Stock at any one time outstanding shall include
the aggregate number of shares issued or issuable upon the exercise of
options, rights and upon the conversion or exchange of convertible or
exchangeable securities.
8. Replacement of Option Certificates. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Option Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of the Option, if mutilated, the Company
will make and deliver a new Option Certificate of like tenor, in lieu thereof.
9. Elimination of Fractional Interests.
The Company shall not be required to issue certificates
representing fractions of Shares upon the exercise of the Option, nor shall
it be required to issue scrip or pay cash in lieu of fractional interests, it
being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of Shares.
10. Reservation of Securities.
The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance
upon the exercise of the Option, such number of shares of Common Stock as
shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Options and payment of the Exercise Price
therefor, all Shares issuable upon such exercise shall be duly and validly
issued, fully paid, non-assessable and not subject to the preemptive rights
of any shareholder.
11. Rights of Option Holder.
Nothing contained in this Agreement shall be construed as
conferring upon the Holder the right to vote or to consent or to receive
notice as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights whatsoever
as a shareholder of the Company.
12. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt
requested:
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(a) If to Optionee, to the address of the Optionee as shown on the
books of the Company; or
(b) If to the Company, to the address of the Company's principal
executive officers or such address as the Company may designate.
13. Supplements and Amendments.
The Company and the Optionee may from time to time supplement or
amend this Option Agreement without the approval of any Holder of the Option
Certificate in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Optionee may deem
necessary or desirable and which the Company and the Optionee deem not to
adversely affect the interests of the Holder of the Option Certificate.
14. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Optionee inure to the benefit of their
respective successors and assigns hereunder.
15. Governing Law.
This Agreement and each Option Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and
for all purposes shall be construed in accordance with the laws of said State.
16. Counterparts.
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
AMBASSADOR EYEWEAR GROUP, INC.
By:
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Name:
Title:
OPTIONEE
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Xxxxxx Xxxx
0
EXHIBIT A
____ Shares
THE SECURITIES ISSUABLE UPON EXERCISE OF STOCK OPTIONS ISSUED PURSUANT
TO THE STOCK OPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT
(i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO
THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR
RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON
THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
AMBASSADOR EYEWEAR GROUP, INC.
Stock Option Certificate
Ambassador Eyewear Group, Inc. (the "Company"), a Delaware Corporation,
hereby grants to the person named below an option to purchase shares of
Common Stock, par value $.01 per share, of the Company (the "Option") under
and subject to the Stock Option Agreement between the Company and
______________ (the "Agreement") exercisable on the following terms and
conditions and those set forth in connection with this certificate:
Name of Optionee:__________________________________________________________
Address:__________________________________________________________
__________________________________________________________
__________________________________________________________
Social Security No.:__________________________________________________________
Number of Shares.:__________________________________________________________
Option Price:__________________________________________________________
Date of Grant:__________________________________________________________
Exercisability Schedule
Exercise Period
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Commencement
Number of Shares Subject to Option Date Expiration Date
----------------------------------- -------------- ---------------
180,833 February 27,1997 February 26, 2002
The Option shall not be treated as an Incentive Stock Option under
section 422 of the Internal Revenue Code of 1986, as amended. By acceptance
of this Option, the Optionee agrees to the terms and conditions hereof.
AMBASSADOR EYEWEAR GROUP, INC.
Stock Option Terms And Conditions
1. Agreement Incorporated by Reference. This Option is issued
pursuant to the terms of the Stock Option Agreement (the "Agreement) between
Ambassador Eyewear Group, Inc., a Delaware corporation (the "Company) and
Xxxxxx Xxxx. Capitalized terms used and not otherwise defined in this
certificate have the meanings given to them in the Agreement. This
certificate does not set forth all of the terms and conditions of the
Agreement, which are incorporated herein by reference.
2. Option Price. The price to be paid for each share of Common Stock
issued upon exercise of the whole or any part of this Option is the Option
Price set forth on the face of this certificate.
3. Exercisability Schedule. This Option may be exercised at any time
and from time to time for the number of shares and in accordance with the
Agreement. This Option may not be exercised as to any shares after the
Expiration Date.
4. Method of Exercise. To exercise this Option, the Optionholder
shall deliver written notice of exercise to the President of the Company
specifying the number of shares with respect to which the Option is being
exercised accompanied by payment of the Option Price for such shares in cash
or by certified check. Promptly following such notice, the Company will
deliver to the Optionee a certificate representing the number of shares with
respect to which the Option is being exercised.
5. Rights as a Stockholder. The Optionee shall not have any rights as
a stockholder of the Company in respect of shares as to which the Option
shall not have been exercised and payment made as provided above.
6. Recapitalization, Mergers, Etc. As provided in the Agreement, in
the event of certain corporate transactions affecting the Company's
outstanding Common Stock, the number and kind of shares subject to this
Option and the exercise price hereunder Committee shall be adjusted.
7. Compliance with Securities Laws. It shall be a condition to the
Optionee's right to purchase shares of Common Stock hereunder that the
Company may, in its discretion, require (a) in the opinion of counsel for the
Company, the proposed purchase shall be exempt from registration under that
Act and the Optionee shall have made such undertakings and agreements with
the Company as the Company may reasonably require, and (b) that such other
steps, if any, as counsel for the Company shall consider necessary to comply
with any law applicable to the issue of such shares by the Company shall have
been taken by the Company or the Optionee, or both. The certificates
representing the shares purchased under this Option may contain such legends
as counsel for the Company shall consider necessary to comply with any
applicable law.
8. Payment of Taxes. The Optionee shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by
law with respect to the exercise of this Option.
AMBASSADOR EYEWEAR GROUP, INC.
By:
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ACCEPTED:
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EXHIBIT B
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Option Certificate, to purchase _________ Shares of
Common Stock and herewith tenders in payment for such securities, cash or a
certified or official bank check payable to the order of Ambassador Eyewear
Group, Inc. in the amount of $_____________, all in accordance with the terms
of that Stock Option Agreement dated as of ____________. The undersigned
requests that a certificate for such securities be registered in the name of
_________________________, whose address is _________________________________.
Date: Signature: *
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(Insert Social Security or Other
Identifying Number of Holder)
* Signature must conform in all respects to
name of holder as specified on the face of
the Option Certificate.
