STOCK OPTION AGREEMENT
AGREEMENT, made as of _________ __, 2000, by and between XXXXXXXXXX.XXX,
INC., a Delaware corporation (the "Company"), and __________________ (the
"Director" or "Holder").
WHEREAS, by written consent dated ________ __, 2000 (the "Grant Date"), the
Board of Directors of the Company authorized the grant to the Director of an
option (the "Option") to purchase an aggregate of 20,000 shares of the
authorized but unissued common stock of the Company, $.01 par value (the "Common
Stock"), conditioned upon the Director's acceptance thereof upon the terms and
conditions set forth in this Agreement; and
WHEREAS, the Director desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Director the Option
to purchase all or any part of an aggregate of 20,000 shares of Common Stock
(the "Option Shares") on the terms and conditions set forth herein.
2. Non-Incentive Stock Option. The Option represented hereby is not
intended to be an Option that qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $____ per
share, subject to adjustment as hereinafter provided.
4. Exercisability. This Option shall become exercisable on ________ __,
2000, subject to the terms and conditions of this Agreement, and shall remain
exercisable until the close of business on ________ __, 2005 (the "Exercise
Period").
5. Termination Due to Death. Upon the death of the Director, the portion of
the Option, if any, that was exercisable as of the date of death may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Director under the will of the Director, for a period of one year from the date
of such death or until the expiration of the Exercise Period, whichever period
is shorter. The portion of the Option, if any, that was not exercisable as of
the date of death shall immediately terminate upon death.
6. Withholding Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Director for Federal income tax
purposes with respect to the Option, the Director shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. The obligations of the Company pursuant to
this Agreement shall be conditional upon such payment or arrangements with the
Company and the Company shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the Director
from the Company.
7. Adjustments.
(a) In the event of a stock split, stock dividend, combination of shares,
or any other similar change in the Common Stock of the Company as a whole, the
Board of Directors of the Company shall make equitable, proportionate
adjustments in the number and kind of shares covered by the Option and in the
option price hereunder.
(b) In the event of any reclassification or reorganization of the
outstanding shares of Common Stock other than a change covered by subsection (a)
hereof or that solely affects the par value of such shares of Common Stock, or
in the case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), the Holder shall have
the right thereafter (until the expiration of the right of exercise of this
Option) to receive upon the exercise hereof after such event, for the same
aggregate Exercise Price payable hereunder immediately prior to such
reclassification, reorganization, merger or consolidation, the amount and kind
of consideration receivable by a holder of the number of shares of Common Stock
of the Company obtainable upon exercise of this Option immediately prior to such
event. The provisions of this subsection (b) shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
8. Method of Exercise.
8.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice.
8.2 Delivery of Option Shares. The Company shall deliver a certificate
for the Option Shares to the Director as soon as practicable after payment
therefor.
8.3 Payment of Purchase Price.
8.3.1 Cash Payment. The Director shall make cash payments by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company. The Company shall not be required to deliver certificates
for Option Shares until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof.
8.3.2 Cashless Payment. The Company, in its sole discretion, may
allow the Director to use Common Stock of the Company owned by him or her to pay
the purchase price for the Option Shares by delivery of stock certificates in
negotiable form that are effective to transfer good and valid title thereto to
the Company, free of any liens or encumbrances. Shares of Common Stock used for
this purpose shall be valued at the Fair Market Value of the Company's Common
Stock on the last trading day preceding the date of exercise. "Fair Market
Value", unless otherwise required by any applicable provision of the Internal
Revenue Code of 1986, as amended, and any successor thereto and the regulations
thereunder, means, as of any given date: (i) if the Common Stock is listed on a
national securities exchange or quoted on the Nasdaq National Market or Nasdaq
SmallCap Market, the last sale price of the Common Stock in the principal
trading market for the Common Stock on such date, as reported by the exchange or
Nasdaq, as the case may be; (ii) if the Common Stock is not listed on a national
securities exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap
Market, but is traded in the over-the-counter market, the closing bid price for
the Common Stock on such date, as reported by the OTC Bulletin Board or the
National Quotation Bureau, Incorporated or similar publisher of such quotations;
and (iii) if the fair market value of the Common Stock cannot be determined
pursuant to clause (i) or (ii) above, such price as the Board of Directors shall
determine, in good faith.
8.3.3 Payment of Withholding Tax. Any required withholding tax may be
paid in cash or with Common Stock in accordance with Sections 8.3.1. and 8.3.2.
8.3.4 Exchange Act Compliance. Notwithstanding the foregoing, the
Company shall have the right to reject payment in the form of Common Stock if in
the opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
9. Nonassignability. The Option shall not be assignable or transferable
except by will or by the laws of descent and distribution in the event of the
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death of the Director. No transfer of the Option by the Director by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and warrants
to the Director that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
the Director in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
11. Director Representations. The Director hereby represents and warrants
to the Company that:
(i) he or she is acquiring the Option and shall acquire the Option
Shares for his or her own account and not with a view towards the
distribution thereof;
(ii) he or she has received a copy of all reports and documents
required to be filed by the Company with the Securities and Exchange
Commission pursuant to the Exchange Act within the last 24 months and all
reports issued by the Company to its stockholders;
(iii) he or she understands that he or she must bear the economic risk
of the investment in the Option Shares, which cannot be sold by him or her
unless they are registered under the Securities Act of 1933 (the
"Securities Act") or an exemption therefrom is available thereunder and
that the Company is under no obligation to register the Option Shares for
sale under the 1933 Act;
(iv) in his or her position with the Company, he or she has had both
the opportunity to ask questions and receive answers from the officers and
directors of the Company and all persons acting on its behalf concerning
the terms and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may possess
such infor mation or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above;
(v) he or she is aware that the Company shall place stop transfer
orders with its transfer agent against the transfer of the Option Shares in
the absence of registration under the 1933 Act or an exemption therefrom as
provided herein; and
(vi) The certificates evidencing the Option Shares shall 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. 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 a Stock Option Agreement, dated as of ________ __,
2000, a copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with the
terms and conditions thereof."
12. Restriction on Transfer of Option Shares.
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(a) Anything in this Agreement to the contrary notwithstanding, the
Director hereby agrees that he or she shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him or her without
registration under the Securities Act, or in the event that they are not so
registered, unless (i) an exemption from the Securities Act registration
requirements is available thereunder, and (ii) the Director has furnished the
Company with notice of such proposed transfer and the Company's legal counsel,
in its reasonable opinion, shall deem such proposed transfer to be so exempt.
(b) Anything in this Agreement to the contrary notwithstanding, the
Director hereby agrees that he or she shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him except in accordance with
the Company's policy, if any, regarding the regarding the sale and disposition
of securities owned by employees and/or directors of the Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications that are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the Company at its principal executive office and
to the Director at his address set forth below, or to such other address as
either party shall have specified by notice in writing to the other. Notice
shall be deemed duly given hereunder when delivered or mailed as provided
herein.
13.2 Stockholder Rights. The Director shall not have any of the rights
of a stockholder with respect to the Option Shares until such shares have been
issued after the due exercise of the Option.
13.3 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Director and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives, any rights, remedies,
obligations or liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without regard to choice
of law provisions); provided, however, that all matters relating to or involving
corporate law shall be governed by the Delaware General Corporation Law.
13.7 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.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
XXXXXXXXXX.XXX, INC. Address:
By:______________________________
Name:
Title:
DIRECTOR: Address:
__________________________________
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
________________________
DATE
XxxxXxxxxx.xxx, Inc.
000 Xxxxxxxx Xxxx
Xxxxx 000X
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _______ __, 2000
("Agreement") with XxxxXxxxxx.xxx, Inc. (the "Company"), I hereby irrevocably
elect to exercise the right to purchase _____ shares of the Company's common
stock, par value $.01 per share ("Common Stock"), which are being purchased for
investment and not for resale.
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of the Company in the sum of $ ;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| With the consent of the Company, a certificate for ____ shares of the
Company's Common Stock, free and clear of any encumbrances, duly
endorsed, having a Fair Market Value (as such term is defined in my
Stock Option Agreement) of $_________.
I hereby represent, warrant to, and agree with, the Company that:
(i) I am acquiring the Option Shares for my own account, for
investment, and not with a view towards the distribution thereof;
(ii) I have received a copy of all reports and documents required to
be filed by the Company with the Commission pursuant to the Securities Exchange
Act of 1934 within the last 24 months and all reports issued by the Company to
its stockholders;
(iii) I understand that I must bear the economic risk of the
investment in the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "Securities Act") or an
exemption therefrom is available thereunder and that the Company is under no
obligation to register the Option Shares for sale under the Securities Act;
(iv) I agree that I will not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by me hereby except in accordance with
Company's policy, if any, regarding the sale and disposition of securities owned
by employees and/or directors of the Company;
(v) in my position with the Company, I have had both the opportunity
to ask questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and conditions
of the offer made hereunder and to obtain any additional information to the
extent the Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(vi) I am aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence of
registration under the Securities Act or an exemption therefrom as provided
herein; and
(vii) the certificates evidencing the Option Shares shall 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. 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 a Stock Option Agreement, dated as of _______ __,
2000, a copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with the
terms and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature) (Address)
------------------------------ ------------------------------
(Print Name)
------------------------------
(Social Security Number)
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