EXHIBIT 6.4
XXXXXXXX.XXX, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
(XXXXX XXXXXXXXX)
Non-qualified Stock Option Agreement (the "Option") made effective as
of the 27th day of July, 1999 between Xxxxxxxx.xxx, Inc., a Delaware corporation
(the "Corporation"), and Xxxxx Xxxxxxxxx (the "Recipient"), an employee of the
Corporation, a Parent or a Subsidiary, pursuant to the Corporation's 1999
Combination Stock Option Plan, as it may be amended from time to time (the "1999
Plan").
W I T N E S S E T H:
WHEREAS, on July 27, 1999, the Corporation adopted the 1999 Plan which
provides for the issuance of stock options, and
WHEREAS, the Corporation and the Recipient desire to enter into an
agreement whereby the Corporation will grant the Recipient an option to purchase
shares of the Common Stock, $.00001 par value, of the Corporation (the "Stock"),
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Corporation and the Recipient
agree as follows:
1. GRANT OF OPTION.
Pursuant to the terms and conditions of the 1999 Plan and this Option,
the Corporation hereby grants to the Recipient an Option to purchase, as
provided in Section 3 hereof, all or any part of a total of 330,000 shares of
Stock (the "Option Shares").
2. PURCHASE PRICE.
The price at which the Option Shares may be purchased shall be $3.00
per share (the "Option Exercise Price"). This price is not less than the par
value of the Stock.
3. EXERCISE OF OPTION.
Subject to the provisions of Section 4 and the right of the Corporation
to accelerate the date upon which any or all of this Option becomes exercisable,
the Recipient shall be entitled to exercise this Option as follows: 146,000
shall be immediately exercisable and the remaining 184,000 shall become
exercisable in five (5) equal monthly installments commencing August 15, 1999.
Notwithstanding any provision of this Option to the contrary, in no event may
this Option be exercised after 10 years from the date of this Option (the
"Expiration Date"). In the event the Recipient's employment is terminated, other
than for cause, in connection with a "change of control" of the Corporation, the
purchase rights which were not exercisable at the date of termination of
employment shall as of such date become immediately exercisable. For purposes of
the foregoing, a
"change of control" shall be deemed to have occurred if the Corporation shall
consummate a transaction involving the sale of the Corporation's assets or all
the Corporation's capital stock or the merger of the Corporation with or into
another entity, following which the persons who were the Corporation's
stockholders prior to such transaction own less than a majority of the
outstanding voting stock of the surviving Corporation.
4. TERMINATION OF RELATIONSHIP.
If the Recipient's relationship with the Corporation is terminated, as
determined by the Corporation, then this Option may be exercised as to all
shares with respect to which Recipient could exercise this Option on the date of
termination of the relationship, and which shares have not been previously
purchased, until the earlier of Expiration Date, or:
(i) in the case of termination by reason of
death or Permanent Disability, one year after
termination of the relationship, or
(ii) in the case of any other termination, other than
termination for cause, three months after the
termination of the relationship.
Notwithstanding the foregoing, in the case of termination for cause, the ability
to exercise this option may be terminated on such earlier date as the
Corporation may specify, and such date may be set so as to prevent the Recipient
from further exercising any portion of this Option.
5. NONTRANSFERABILITY; PERSONS ABLE TO EXERCISE.
The Option may not be transferred other than by will or the
laws of descent and distribution. During the life of the Recipient, only the
Recipient may exercise this Option. If the Recipient dies while still employed
by the Corporation, or during the periods specified in Section 4, this Option
may be exercised by his executors, administrators, legatees or distributees,
provided that such person or persons comply with the provisions of this Option
applicable to the Recipient.
6. METHOD OF EXERCISING OPTION.
The Option may be exercised, in whole or in part, by written
notice to the Corporation, containing an executed Notice of Exercise in the form
of Attachment A, provided that the Corporation, in its discretion, may modify or
augment these requirements as provided in Section 9 of this Option, or where
appropriate because a person other than the Recipient is exercising the Option
pursuant to Section 5. The written notice specified in this Section must be
accompanied by payment of the Option Exercise Price for the shares being
purchased. Payment shall be made in cash, unless the Corporation, in its sole
discretion, authorizes payment to be made in shares of the Corporation, other
property, or a combination of such shares, other property and cash. As soon as
practical after receipt of this notice and payment, the Corporation shall
deliver a certificate or certificates representing the purchased shares
registered in the name of the person or persons exercising this Option. In the
event this Option is exercised by any person other than the Recipient, the
notice shall be accompanied by appropriate proof of the right of such person to
exercise this Option. All shares purchased upon the exercise of this Option and
payment of the full Option Exercise Price will be fully paid and nonassessable.
7. STOCK ADJUSTMENTS.
If there shall be any change in the Stock through merger,
consolidation, reorganization, recapitalization, or other change in the
corporate structure of the Corporation, appropriate adjustments in the Option
Exercise Price and total number and kind of shares subject to this Option shall
be made by the Corporation as provided in the 1999 Plan.
8. NO RIGHTS OTHER THAN THOSE EXPRESSLY CREATED.
Neither this Option nor any action taken hereunder shall be construed
as (i) giving the Recipient any right to be retained in the employ of, or
continue to be affiliated with, the Corporation, (ii) giving the Recipient any
equity or interest of any kind in any assets of the Corporation, or (iii)
creating a trust of any kind or a fiduciary relationship of any kind between the
Recipient and the Corporation. As to any claim for any unpaid amounts under this
Option, any person having a claim for payments shall be unsecured creditor. The
Recipient shall not have any of the rights of a stockholder with respect to any
Option Shares until such time as this Option has been exercised and Option
Shares have been issued.
9. COMPLIANCE WITH LAWS.
(a) WITHHOLDING OF TAXES. Pursuant to applicable federal,
state, local or foreign laws, the Corporation may be required to collect or
withhold income or other taxes from Recipient upon the grant of this Option, the
exercise of this Option, or at some other time. The Corporation may require, as
a condition to the exercise of this Option, or demand, at such other time as it
may consider appropriate, that the Recipient pay the Corporation the amount of
any taxes which the Corporation may determine is required to be collected or
withheld, and the Recipient shall comply with the requirement or demand of the
Corporation.
(b) SECURITIES LAW COMPLIANCE. Upon exercise (or partial
exercise) of this Option, the Recipient shall make such representations and
furnish such information as may, in the opinion of counsel for the Corporation,
be appropriate to permit the Corporation to issue or transfer the Option Shares
in compliance with the provisions of applicable federal or state securities
laws. The Corporation, in its discretion, may postpone the issuance and delivery
of Option Shares upon any exercise of this Option until completion of such
registration or other qualification of such shares under any federal or state
laws, or stock exchange listing, as the Corporation may consider appropriate.
The Corporation may require that prior to the issuance or transfer of Option
Shares upon exercise of this Option, the Recipient enter into a written
agreement to comply with any restrictions on subsequent disposition that the
Corporation deems necessary or advisable under any applicable federal and state
securities laws. Certificates of Stock issued hereunder shall be legended to
reflect such restrictions.
(c) GENERAL. No Option Shares shall be issued upon exercise of
this Option unless and until the Corporation is satisfied, in its sole
discretion, that there has been compliance with all legal requirements
applicable to the issuance of such Option Shares.
10. MISCELLANEOUS.
(a) PROVISIONS OF THE PLAN. The Option hereby granted is
expressly subject to all of the terms and conditions contained in this Option
and in the 1999 Plan, except those which are expressly applicable only to "1999
Plan ISOs", and the 1999 Plan is hereby incorporated herein by reference. All
capitalized terms not defined in this Option have the meanings specified in the
1999 Plan. This stock option is not intended to be an Incentive Stock Option, as
that term is described in Section 422 of the Internal Revenue Code of 1986, as
amended.
(b) DISCRETION OF THE COMMITTEE. Unless otherwise explicitly
provided, the Committee, as defined in the Plan, shall make all determinations
required to be made hereunder, including determinations required to be made by
the Corporation, and shall interpret all provisions of this Option, as it deems
necessary or desirable, in its sole and unfettered discretion. Such
determinations and interpretations shall be binding and conclusive on the
Corporation and the Recipient. The Committee, in its sole discretion, is
authorized to accelerate the time at which this Option may be exercised.
(c) RESERVATION OF SHARES. During the term of this Option, the
Corporation shall at all times reserve and keep available shares of Stock
sufficient to satisfy the requirements of this Option.
(d) AMENDMENT. This Option may only be modified or
amended by a writing signed by both parties.
(e) NOTICES. Any notices required to be given under this
Option shall be sufficient if in writing and if hand-delivered or if sent by
first class mail and addressed as follows:
if to the Corporation:
Xxxxxxxx.xxx, Inc.
The Xxxx Building
0000 Xxxxx Xxxxx Xxxx
Xxxxx, XX 00000
if to the Recipient:
Xxxxx Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or to such other address as either party may designate under the provisions
hereof.
(f) SUCCESSORS AND ASSIGNS. The rights and obligations of the
Corporation under this Option shall inure to the benefit of and be binding upon
the successors and assigns of the Corporation.
(g) APPLICABLE LAW. All rights and obligations under this
Option shall be governed by the laws of the State of Delaware.
(h) PARAGRAPH HEADINGS. The paragraph headings used in this
Option are for convenience or reference, and are not to be construed as part of
this Option.
IN WITNESS WHEREOF, the parties have executed this Option as an
instrument under seal effective as of the date written on the first page of this
Option.
Xxxxxxxx.xxx, Inc.
By:
----------------------------
Xxxxxx X. Xxxx, Chairman
-------------------------------
Name: Xxxxx Xxxxxxxxx
ATTACHMENT A
NOTICE OF EXERCISE
Xxxxxxxx.xxx, Inc.
The Xxxx Building
0000 Xxxxx Xxxxx Xxxx
Xxxxx, XX 00000
ATTENTION: TREASURER
Gentlemen:
Pursuant to our Stock Option Agreement dated as of ___________, I
hereby elect to exercise this Option to the extent indicated:
Number of Shares Per Share Total
Which I Elect to x Price = Price
Purchase
________ x ________ = _____
Enclosed with this letter is full payment of the total price of the
shares described above in the following form:
(1) a check in the amount of $___________ payable to the order of
the Corporation; and/or [if authorized by the Corporation]
(2) shares of Stock of the Corporation properly endorsed and
having a fair market value equal to $____________________.
Kindly issue a certificate or certificates to me representing the
shares which I am acquiring by this exercise, and deliver it to the address
provided above.
Very truly yours,
--------------------------------
