OPTION AGREEMENT
AGREEMENT, dated as of December 18, 1995, by and between XXXXX XXXXXXX
(the Holder") and Automobile Protection Corporation - APCO (the
"Company").
WHEREAS, the Holder has agreed to receive the option herein set forth as
consideration for services of Holder to the Company
NOW, THEREFORE, in consideration of the covenants herein contained, the
parties hereto agree as follows:
1. In consideration of the services of Holder to Company, the Company
hereby grants to the Holder the right to purchase up to 5,000 shares of
the Common Stock, $.00l per value ("Common Stock") of the Company at an
exercise price equivalent to $2.50 per share of Common Stock. This
option is not granted under a stock option plan other than the plan
formed by the terms of this agreement. This is not an incentive stock
option as that term is defined in the Internal Revenue Code of 1986, as
amended. The stock option may be exercised at any time prior to
December 18, 2000.
2. Payment of Exercise Price. The purchase price for the shares of
Common Stock pursuant to which the option is exercised, will be paid in
full at the time of exercise, either in cash or in a manner to be
determined at the sole discretion of the Company. Exercise of any
option hereunder shall be by written notice to the Company at its
principal place of business, specifying the number of shares of Common
Stock being purchased and accompanied by the purchase price and any
withholding tax obligations imposed on the Company by reason of the
exercise of the option. In the event that the tax obligation, if any,
is not paid, the Company will be permitted to treat as payment of any
withholding tax amount due, the exercise of that number of whole shares
of Common Stock equal to the amount of the tax due divided by the fair
market value of the Common Stock as of the date the option is exercised,
and the Company will be permitted to deduct such number of shares of
Common Stock from the total number being exercised. Certificates
representing the shares as to which the option shall have been exercised
shall be registered in the name of the person exercising the option.
3. Rights of Stockholder. The Holder shall not have any of the rights
of a stockholder with respect to the Common Stock covered by the option
until the date of the issuance of a stock certificate for shares of
Common Stock purchased hereunder.
4. Transferability. This option and the rights conferred may not be
transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of this option or any right
conferred hereby, or upon the levy of any attachment or similar process
on the rights conferred hereby, this option and the rights conferred
hereby shall immediately become null and void.
5. Restricted Nature of Securities. This option and the shares of
Common Stock receivable on the exercise of the option are not registered
under the Securities Act of 1933, as amended (the "Act") . As a
condition to the sale of Common Stock on the exercise of the option, the
person exercising such option may be required by the Company to give it
such documents, including such appropriate investment representations as
may be required by Counsel for the Company and such additional
agreements as the Counsel for the Company may determine, as a condition
to the acceptance of the exercise of any option hereunder.
The Holder represents that it has received and carefully reviewed the
Company's Annual Report on Form 10-K for the fiscal year ended August
31, 1994, and Annual Report to Stockholders and related proxy materials
for the Company's Annual Meeting to be held in February 1995, and has
been granted the opportunity to obtain any additional, publicly
available information relating to the Company and ask questions of
executives of the Company that it deems necessary to verify the accuracy
and completeness of the information provided to it. Holder represents
that it is acquiring this option solely for its own account for the
purpose of investment and not with a view to or for resale in connection
with any distribution thereof, except in compliance with the Act, any
applicable state securities laws and the rules and regulations
thereunder. Holder represents that its knowledge and experience in
financial and business matters is such that Holder is capable of
evaluating an investment in the option and that Holder's financial
condition is such that Holder can bear the economic risks of acquiring
and holding this option.
6. Sales under Securities Act. Anything in this agreement to the
contrary notwithstanding, the Holder hereby agrees that it shall not
sell, transfer by any means or otherwise dispose of the option or the
Common Stock acquired by him upon exercise of the option hereunder
without registration under the Act, or in the event that they are not so
registered, unless (a) an exemption from the Act is available
thereunder, and (b) the Holder has furnished the Company with notice of
such proposed transfer, and the Counsel for the Company, in its
reasonable opinion, shall deem such proposed transfer to be so exempt,
or the Holder has furnished the Company with notice of such proposed
transfer, together with an opinion of legal counsel reasonably
satisfactory to the Counsel for the Company, that in such counsel's
opinion such proposed transfer shall be so exempt.
7. Stop Transfer: Legend.
(a) The Company may place stop transfer orders with its transfer agent
against the transfer of the shares of Common Stock issuable under the
option hereof in the absence of registration under the Act or an
exemption therefrom provided herein.
(b) The certificates evidencing shares of Common Stock to be
issued upon the exercise of the option may bear the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered under the
Securities Act of 1933, as amended. The shares may not be sold
or transferred in the absence of such registration or an
exemption therefrom under said Act."
"The shares represented by this certificate have been
acquired pursuant to an agreement dated as of August 31, 1995, a
copy of which is on file with the Company, and may not be
transferred, pledged or disposed or exempt in accordance with the
terms and conditions thereof."
8. Adjustment to Number of Securities.
(a) If the outstanding shares of Common Stock of the Company are
increased, decreased, changed into or exchanged for a different number
or kind of stock or securities of the Company or stock of a different
par value or without par value, through reorganization,
recapitalization, reclassification, stock dividend, stock split,
amendment to the Company's Certificate of Incorporation or reverse stock
split, an appropriate and proportionate adjustment shall be made in the
maximum number and/or kind of securities allocated to this option,
without change in the aggregate purchase price applicable to the
unexercised portion of the outstanding option.
(b) Upon the effective date of the dissolution or liquidation
of the Company, or of a reorganization, merger or consolidation of the
Company with one or more corporations in which the Company will not
survive as an independent publicly owned corporation, or of a transfer
of substantially all the property or more than eighty percent (80%) of
the then outstanding shares of Common Stock of the Company to another
corporation, this option shall terminate unless provision be made in
writing in connection with such transaction for the assumption of the
option granted, or the substitution for the option of a new option
covering the shares of a successor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to number and kind
of stock and prices in which event the new option substituted therefor,
shall continue in the manner and under the terms so provided.
(c) Adjustments under this paragraph shall be made by the
Board of Directors, whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive. No
fractional shares of Common Stock shall be issued under the Plan or any
such adjustment.
9. Termination.
If the Holder fails to fulfill its obligations pursuant to
paragraph 1, then that portion of this option that is not then
exercisable on such termination shall immediately terminate and no
additional shares of Common Stock shall become exercisable hereunder.
Notwithstanding the foregoing, in the event of a termination of this
option, if the Holder, as of a time immediately prior to such
termination, has the right to acquire any shares of Common Stock, the
Holder will have the right to exercise such right pursuant to the terms
of this Option.
10. Miscellaneous Provisions.
(a) Applicable Law. This agreement shall be governed by the
laws of the State of Georgia applicable to contracts made and to be
wholly performed therein.
(b) Amendment. This agreement may only be amended by a
written instrument executed by the Company and by the Holder.
(c) Entire Agreement. This agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the
parties, oral and written, with respect to the subject matter hereof.
(d) Execution in Counterparts. This agreement may be executed
in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
(e) Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly
given when delivered by hand or mailed by registered or certified mail,
postage prepaid, return receipt requested, as follows:
If to the Holder, to: Mr. Xxxxx Xxxxxxx
If to Company, to: Automobile Protection Corporation - APCO
00 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Secretary
(f) Headings. The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way limit
or affect the meaning or interpretation of any of the terms or
provisions of this agreement.
(g) Severability. Any provision of this agreement which is
held by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction(s) shall be, as to such jurisdic
tion(s), ineffective to the extent of such prohibition or unen
forceability without invalidating the remaining provisions of this
agreement or affecting the validity or enforceability of such provision
in any other jurisdiction.
(h) Gender. Unless the context otherwise requires, all
personal pronouns used in this agreement, whether in the masculine,
feminine or neuter gender, shall include all other genders.
IN WITNESS WHEREOF, this agreement has been executed and delivered by
the parties hereto.
AUTOMOBILE PROTECTION CORPORATION
By:
HOLDER
By:
