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Exhibit 4.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT between BridgeStreet Accommodations, Inc., a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxxxxx (the "Grantee")
dated effective as of June 12, 1998 (the "Date of Grant").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto act and agree as follows:
Section 1. The Plan
The option granted pursuant to this Agreement is not granted pursuant to
the Company's 1997 Equity Incentive Plan, as amended (the "Plan"). This
Agreement shall nevertheless be subject to the terms of the Plan, a copy of
which is attached hereto as Exhibit A and is incorporated herein in its entirety
by this reference, except to the extent this Agreement and the Plan are in
conflict, in which case this Agreement shall control. Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Plan.
Section 2. Grant of Option
The Company hereby grants to the Grantee, as of the Date of Grant, an
option (the "Option") to purchase up to one hundred twenty-five thousand
(125,000) shares of Common Stock, par value $.01 per share, of the Company (the
"Option Shares") at a price per share of $7.50, both the price and the number of
shares being subject to adjustment only as provided in the Plan.
Section 3. Terms of Option
(a) Subject to such further limitations as are provided herein, the Option
shall become exercisable in full on the eighth anniversary of the Date of Grant.
(b) The right to exercise the Option as to one-third (ignoring fractional
shares) of the total number of Option Shares shall be accelerated, and the
Option shall be exercisable as to such number of Option Shares, from and after
the first date the Average Closing Price is at least twice the Base Price.
(c) The right to exercise the Option as to an additional one-third
(ignoring fractional shares) of the total number of Option Shares shall be
accelerated, and the Option shall be exercisable as to such number of Option
Shares from and after the first date the Average Closing Price is at least three
times the Base Price.
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(d) The right to exercise the Option as to the remaining Option Shares
shall be accelerated, and the Option shall be exercisable in full, from and
after the first date the Average Closing Price is at least four times the Base
Price.
(e) For purposes hereof:
(i) "Average Closing Price" shall mean the average closing price of a
share of Common Stock for ten (10) consecutive trading days on the
principal national securities exchange (including the Nasdaq National
Market) on which the shares of Common Stock are listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange (including the Nasdaq National Market), the average of the bid and
asked prices during such ten-day period in the over-the-counter market as
furnished by Nasdaq; provided, however, as of immediately prior to the
consummation of any Change of Control of the Company the Average Closing
Price shall be deemed to be the price at which the Common Stock is valued
in such Change of Control and provided, further, the Average Closing Price
shall be appropriately adjusted in the event of any stock split, stock
dividend or similar transaction occurring during the period when the
Average Closing Price is being determined;
(ii) "Cause" shall mean "cause" as defined in the Employment Agreement
dated June 12, 1998, between the Company and the Grantee, except for a
termination by the Executive for Cause pursuant to Section 13 thereof.
(iii) "Change of Control" shall mean a merger, consolidation, tender
offer, sale of all or substantially all of the Company's assets or
comparable transaction in which the holders of the Company's outstanding
voting securities (including other securities convertible or exercisable
therefor) as of immediately prior to such transaction do not hold
immediately following such transaction securities of the surviving or
acquiring entity (or the direct or indirect parent of such entity) entitled
to cast a majority of the votes entitled to be cast for the election of
Directors; and
(iv) "Common Stock" shall mean the Company's presently authorized
Common Stock and any stock into or for which such Common Stock may
hereafter be converted or exchanged.
(v) "Base Price" shall mean $4 7/8.
Section 4. Termination of the Option
The Option and all rights hereunder with respect thereto, to the extent
such rights shall not have been exercised, shall terminate and become null and
void after the close of business on the day that is ten (10) years from the Date
of Grant (the "Option Term").
Section 5. Cessation of Grantee's Employment
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(a) If the Grantee ceases to be employed by the Company either by reason of
his or her death or by reason of termination by Grantee without Cause during the
Option Term, the Option shall be exercisable, to the extent the Option was
exercisable at the time of the Grantee's death or termination, as the case may
be, either by the Grantee, in the event of termination, or by the Grantee's
executor or administrator or, if not so exercised, by the legatees or
distributees of the Grantee's estate, in the event of death, in all events only
during the one (1) year period immediately following the Grantee's death or
termination, as the case may be, after which time the Option shall terminate.
(b) If the Grantee ceases to be employed by the Company by reason of a
termination by the Company without Cause or by termination by Grantee for Cause,
the Option shall become immediately exercisable as to all remaining Option
Shares by the Grantee only during the one (1) year period immediately following
such cessation or termination, as the case may be, after which time the Option
shall terminate.
(c) If there is a Change of Control, the Chairman of the Company shall
request that the Board of Directors approve that the Option shall become
immediately exercisable as to all remaining Option Shares by the Grantee only
during the one (1) year period immediately following such Change of Control,
after which time the Option shall terminate.
(d) Notwithstanding any other provisions set forth herein or in the Plan,
in no event shall the Option be exercised after the expiration of the Option
Term.
(e) Notwithstanding any other provisions set forth herein or in the Plan,
the Option shall terminate automatically and without notice to the Grantee on
the date the Grantee's employment is terminated for Cause.
Section 6. Exercise of Option
(a) The Grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving written notice
of election to the Company, attention: Treasurer. Such notice shall specify the
number of Option Shares as to which the Option is to be exercised.
(b) At the time the Option is exercised, the Grantee shall make full
payment for the Option Shares purchased, in cash, certified check or bank
cashier's check, or through the surrender of shares of Common Stock at their
fair market value on the date of exercise or a note pursuant to any cashless
exercise program that the Company shall adopt. The Grantor also shall pay to the
Company or make provision satisfactory to the Company for the payment of any
taxes required by law to be withheld by the Company at the time of the exercise
of the Option or the sale of the Option Shares acquired upon such exercise.
(c) In the event exercise of the Option shall require the Company to issue
a fractional share of Common Stock of the Company, such fraction shall be
disregarded and the purchase price
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payable in connection with such exercise shall be appropriately reduced. Any
such fractional share shall be carried forward and added to any shares covered
by future exercisers) of the Option.
(d) Notwithstanding anything to the contrary contained herein, the Option
shall not be exercisable unless either (a) a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the Option
Shares shall have become, and continues to be, effective; (b) the Grantee (i)
shall have represented, warranted and agreed, in form and substance satisfactory
to the Company, at the time of exercising the Option, that he or she is
acquiring the Option Shares for his or her own account, for investment and not
with a view to or in connection with any distribution, (ii) shall have agreed to
restrictions on transfer in form and substance satisfactory to the Company, and
(iii) shall have agreed to an endorsement which makes appropriate reference to
such representations, warranties, agreements and restrictions on the
certificate(s) representing the option shares; or (c) the Grantee shall have
complied with any other applicable exemption requirement to registration under
the Act. The Company shall use its best efforts to ensure that a registration
statement has become and continues to be effective with respect to the offer and
sale of the Option Shares to the Grantee.
Section 7. No Rights of a Shareholder
Neither the Grantee nor any personal representative shall be, or shall have
any of the rights and privileges of, a shareholder of the Company with respect
to any Option Shares, in whole or in part, prior to the date of exercise of the
Option.
Section 8. Nontransferability of Option
During the Grantee's lifetime, unless otherwise allowed by the Board of
Directors of the Company pursuant to Section 6.3 of the Plan, the Option shall
be exercisable only by the Grantee, and the Option shall not in any event be
transferable except, in case of the death of the Grantee, by will or the laws of
descent and distribution.
Section 9. Employment not Affected
Neither the granting of the Option nor its exercise shall be construed as
granting to the Grantee any right with respect to his or her continued
employment by the Company. Except as may otherwise be limited by a written
agreement between the Company and the Grantee, the right of the Company to
terminate. at will the Grantee's employment at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by the Company.
Section 10. Amendment of Option
The Option may be amended or modified at any time by the Company; provided,
however, that the Grantee's consent to such amendment or modification shall be
required unless the Board of Directors or the Compensation Committee of the
Company determines that the amendment or
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modification, taking into account any related action, would not materially and
adversely affect the Grantee.
Section 11. Notice
(a) Any notices required or permitted hereunder shall be addressed to the
Company at 00000 Xxxxxxxxxx Xxxx, Xxxxx, Xxxx 00000, Attention: Treasurer, or to
the Grantee at the most current address of the Grantee appearing in the records
of the Company, as the case may be.
(b) Either the Company or the Grantee may, by notice to the other given in
the manner provided in Section 11(a), change his, her or its address for future
notice.
Section 12. Governing Law
The validity, construction, interpretation and effect of this instrument
shall be governed by and determined in accordance with the law of the State of
Delaware, without regard to conflicts of law principles.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunder duly authorized and the Grantee has hereunto
set his hand all as of the 12th day of June, 1998.
BRIDGESTREET ACCOMMODATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Its
ACCEPTED:
/s/ Xxxx X. Xxxxxxxxx
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______________________, Grantee
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[Exhibit A containing the 1997 Equity Incentive Plan is incorporated herein by
reference to the Company's Proxy Statement filed with the Securities and
Exchange Commission on April 14, 1998 and used in connection with its 1998
Annual Meeting of Stockholders.]
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