Exhibit (d)(1)(F)
STOCK OPTION AGREEMENT
AGREEMENT made as of this 28th day of December 2000 by and between THE
XXXXXX BIOMECHANICS GROUP, INC., a New York corporation (the "Company"), and
XXXXXX X. XXXXXX (the "Optionee").
WHEREAS, the Optionee has on this date become employed by the Company and
is expected to provide valuable services to the Company; and
WHEREAS, the Company desires to reward such services and encourage the
Optionee's continued dedication and to afford the Optionee the opportunity to
acquire stock ownership in, or otherwise share in the appreciation of the stock
of, the Company so that the Optionee may have a direct proprietary interest in
the Company's success.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant of Option. (a) Upon the terms and subject to the conditions set
forth herein, the Company hereby grants to the Optionee, during the period
commencing on the date of this Agreement and, unless earlier terminated pursuant
to Section 5 or Section 6 hereof, ending ten (10) years from the date hereof
(the "Expiration Date"), the right and option (the "Options") to purchase from
the Company, at a price of $1.525 per share, 175,000 shares of the Company's
Common Stock, par value $.02 per share (the "Common Stock"), pursuant to the
Company's 1992 Stock Option Plan, as amended (the "1992 Plan"). Notwithstanding
the foregoing, if the Optionee has not taken the office of President of the
Company on or before March 31, 2001, then the Options shall terminate on such
date, and the Optionee shall have no further rights under this Agreement. The
Options are intended to qualify under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code of 1986, as amended (the "Code"), as an incentive stock option.
(b) Nothing in this Agreement shall confer upon the Optionee any
right to continue in the employ of the Company or interfere in any way with the
right of the Company to terminate or otherwise modify the terms of the
Optionee's employment.
2. Vesting and Exercise of Options. The Options shall vest (subject to
acceleration and termination under the provisions hereof) in three installments
as follows: options as to 58,333 shares shall vest on each of December 31, 2001
and December 31, 2002 and Options for 58,334 shares shall vest on December 31,
2003.
3. Method of Exercising Options. The Optionee may exercise the Options by
delivering to the Company (i) a written notice stating the number of shares of
Common Stock that the Optionee has elected to purchase at that time from the
Company and (ii) full payment of the purchase price of the shares of Common
Stock then to be purchased.
Payment of the exercise price for the shares of Common Stock upon any
exercise of the Options may be made by check payable to the order of the
Company; provided, however, that in the event that the Optionee enters into an
Employment Agreement with the Company and Optionee's employment is terminated
without Cause or the Optionee terminates his employment for Good Reason (as and
if such capitalized terms are defined in his Employment Agreement with the
Company), subject to Sections 5 and 6 hereof, the Optionee shall have the right
to pay the exercise price for the shares of Common Stock by delivery of shares
of Common Stock of the Company or surrender of Options (having a fair market
value equal to the purchase price of the Common Stock issuable upon exercise of
the Options over the applicable exercise price) duly endorsed in blank or
accompanied by appropriate stock powers, together with such amount as the
Company shall, in its sole discretion, deem necessary to satisfy any tax
withholding obligation or tax arising by reason of the transfer of such shares
of Common Stock ("Cashless Exercise").
In connection with any Cashless Exercise, only full shares of Common Stock
of the Company with an aggregate fair market value not exceeding the exercise
price will be accepted in payment, and any portion of the exercise price which
is in excess of such aggregate fair market value must be paid in cash or by
certified or bank cashier's check payable to the order of the Company, it being
understood that the Company shall not be required to pay cash in exchange for
tendered certificates. If the tendered certificate(s) evidence more shares of
Common Stock than are accepted for payment, an appropriate replacement
certificate shall be issued to the Optionee for the number of excess shares of
Common Stock.
4. Issuance of Common Stock and Payment of Cash upon Exercise of Options.
As promptly as practicable after receipt of such written notification of the
Optionee's election to exercise the Options and full payment of such exercise
price and any applicable withholding taxes, the Company shall issue or transfer
to the Optionee the number of shares of Common Stock with respect to which the
Options have been so exercised and shall deliver to the Optionee a certificate
or certificates therefor, registered in the Optionee's name.
5. Retirement, Death or Disability of the Optionee. If the employment of
the Optionee shall terminate for any reason, other than "Cause" by the Company
or voluntarily by the Optionee without "Good Reason" (as such terms are defined
in Optionee's Employment Agreement with the Company), the Optionee (or in the
case of Optionee's death or disability his executor, administrator or personal
representative) shall have the right to exercise the Options which have vested
hereunder for the three (3) month period following such termination to the
extent that the Options were vested at the date of Retirement or death. Upon a
termination by the Company for "Cause", or a voluntary termination by the
Optionee without "Good Reason," all vested but unexercised Options and all
unvested Options shall, upon such termination, lapse and be of no further
effect.
6. Acceleration of Vesting in Certain Circumstances Notwithstanding the
vesting provisions of Section 2:
(a) if the Optionee's employment terminates by reason of death or
disability, a portion of the Options which would next have vested under the
schedule set forth in Section 2 will vest, pro rata in proportion to the number
of days in the calendar year expired through the date of
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termination and the remaining options shall lapse and be of no further effect;
and
(b) if the Optionee is terminated without Cause or voluntarily
terminates his employment for Good Reason (as and if said capitalized terms are
defined in his Employment Agreement with the Company), all of the Options which
are not then vested (or such portion thereof as the Executive may elect) shall
vest.
7. Securities Matters. (a) Notwithstanding anything herein to the
contrary, the Optionee's ability to exercise this Option is subject to timely
shareholder approval of the increase in the number of shares of Common Stock
underlying the 1992 Plan (the "Increase") approved by the Board of Directors on
the date hereof.
(b) The shares of Common Stock issued pursuant to the terms of this
Agreement shall represent fully paid and non-assessable shares of Common Stock.
The Company represents, warrants and covenants that (i) the Company has
previously prepared and filed with the SEC a registration statement on Form S-8
under the Securities Act of 1933, as amended (the "Act"), registering the sale
of shares under the 1992 Plan, which registration is currently effective, (ii)
the Company shall as promptly as practicable, after Optionee becomes President
of the Company and the Increase is approved by the shareholders of the Company,
amend such registration on Form S-8 to include the shares of Common Stock
issuable pursuant to the terms of this Agreement, and (iii) the Company shall
maintain the effectiveness of the registration statement, as so amended, until
all of such Shares may be sold without restriction under the Act.
8. The Optionee. Whenever in any provision of this Agreement reference is
made to the Optionee, under circumstances where such reference should logically
be construed to apply to the executors, administrators, personal representatives
or a person or persons to whom the Options may be transferred by will or by the
laws of descent and distribution, the reference to the Optionee shall be deemed
to include such person or persons.
9. Non-Transferability. The Options are not transferable by the Optionee
otherwise than by applicable laws of descent and distribution and, except as set
forth herein, are exercisable during the Optionee's lifetime only by the
Optionee or the legally appointed administrator of his affairs. No assignment or
transfer of the Options, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, but immediately upon such assignment or transfer the
Options shall terminate and become of no further effect.
10. Rights as Shareholder. The Optionee shall have no rights as a
shareholder with respect to any share of Common Stock covered by the Options
until the Optionee shall have become the holder of record of such share of
Common Stock, and no adjustment shall be made for dividends or distributions or
other rights in respect of such share of Common Stock for which the record date
is prior to the date upon which the Optionee shall become the holder of record
thereof.
11. Adjustment for Recapitalization, Merger, Etc. The aggregate number of
shares of Common Stock that may be purchased pursuant to the Options, the number
of shares of Common
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Stock covered by the Options and the price per share shall be appropriately
adjusted for any increase or decrease in the number of outstanding shares of
Common Stock resulting from a stock split or other subdivision or consolidation
of shares of Common Stock or for other capital adjustments or payments of stock
dividends or distributions or other increases or decreases in the outstanding
shares of Common Stock effected without receipt of consideration by the Company.
In the event of a liquidation of the Company, or a merger, reorganization
or consolidation of the Company with any other corporation in which the Company
is not the surviving corporation or the Company becomes a wholly owned
subsidiary of another corporation, any unexercised Options shall be deemed
canceled unless the surviving corporation in any such merger, reorganization or
consolidation elects to assume the Options or to issue substitute options in
place thereof. Notwithstanding the foregoing, the Company shall deliver written
notice to Optionee of its intent to effect such liquidation, merger or
consolidation, following which the Optionee shall have the right, exercisable
during a ten (10) day period ending on the fifth day prior to such liquidation,
merger or consolidation, to exercise the Options in whole or in part.
Adjustments under this Section 11 shall be made in a proportionate and equitable
manner by the Board of Directors (or Committee), whose determination as to the
nature of the adjustments shall be made, and the extent thereof, shall be final,
binding and conclusive. In the event that a fraction of a share results from the
foregoing adjustment, said fraction shall be eliminated and the price per share
of the remaining shares subject to the Options adjusted accordingly.
12. Compliance with Law. Notwithstanding any of the provisions hereof,
except in connection with a Change of Control (as and if such capitalized terms
are defined in Optionee's Employment Agreement with the Company) or the
dissolution or liquidation of the Company, the Optionee hereby agrees that the
Optionee will not exercise the Options, and that the Company will not be
obligated to issue or transfer any shares of Common Stock to the Optionee
hereunder, if the exercise hereof or the issuance or transfer of such Common
Stock shall constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority.
13. Notice. Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed effective (a) upon personal
delivery, if delivered by hand, (b) upon receipt of electronic confirmation, if
sent by facsimile transmission, (c) three (3) days after the date of deposit in
the mails, if mailed by certified or registered mail (return receipt requested),
or (c) on the next business day, if mailed by an overnight mail service to the
parties,
if to the Company: if to the Optionee:
The Xxxxxx Biomechanics Group, Inc. Xx. Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxx 31 The Birches
Xxxx Xxxx, XX 00000 Xxxxxx Xxxxxxx, XX 00000
Attn.: Chief Financial Officer
Copies of all notices to the Company or the Optionee under this Agreement shall
be sent to:
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Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or at such other address or facsimile number as either party may from time to
time specify to the other.
14. Entire Agreement. This Agreement sets forth the complete understanding
of the Company and the Optionee with respect to the subject matter hereof and
supersedes all prior understandings, whether oral or written.
15. Conflict with 1992 Plan. This Agreement is subject to all of the terms
and provisions of the 1992 Plan and the Optionee shall be entitled, with respect
to the Options, to all of the rights and benefits provided by the 1992 Plan. In
the event that there is any inconsistency between the provisions of this
Agreement and of the 1992 Plan, other than Section 9 hereof, the provisions of
the 1992 Plan shall govern.
16. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without giving
effect to the principles of conflicts of law). The Company and the Optionee each
agrees that the federal or state courts located in the State of New York shall
have exclusive jurisdiction in connection with any dispute arising out of this
Agreement.
17. Severability. If any provision of this Agreement, or any part of any
of them, is hereafter construed or adjudicated to be invalid or unenforceable,
the same shall not affect the remainder of the covenants or rights or remedies
which shall be given full effect without regard to the invalid portions. If any
of the covenants set forth herein is held to be invalid or unenforceable because
of the duration of such provision or the area covered thereby, the parties agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision and in its reduced form said provision
shall then be enforceable.
18. Headings. The headings of this Agreement are for convenience of
reference only and shall not affect in any manner any of the terms and
conditions hereof.
19. Modifications and Waivers. No term, provision or condition of this
Agreement may be modified or discharged unless such modification or discharge is
authorized by the Board and is agreed to in writing and signed by the parties
hereto. No waiver by either party hereto of any breach by the other party hereto
of any term, provision or condition of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
THE XXXXXX BIOMECHANICS GROUP, INC.
By:
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Name:
Title:
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Xxxxxx X. Xxxxxx
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