EXHIBIT 10.11
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 31st day of March, 1998, between BIG CITY BAGELS,
INC., a New York corporation ("Company"), and XXXX XXXXXXX ("Director" or
"Holder").
WHEREAS, pursuant to the Company's 1996 Performance Equity Plan ("Plan"),
on March 31st of each calendar year, each person who is then a director of the
Company is to be awarded an option (the "Option") to purchase an aggregate of
10,000 of the authorized but unissued or treasury shares of the common stock of
the Company, $.001 par value ("Common Stock"), on the terms and conditions set
forth in this Agreement and subject to provisions of the Plan (capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the
Plan); and
WHEREAS, the Director desires to acquire said Option on the terms and
conditions set forth in this Agreement:
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants Director the Option to
purchase all or any part of an aggregate of 10,000 shares of Common Stock (the
"Option Shares") on the terms and conditions set forth herein and subject to the
provisions of the Plan.
2. Nonincentive Stock Option. The Option represented hereby is a nonqualified
stock option not intended to qualify under any section of the Internal Revenue
Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $0.9375 per share,
subject to adjustment as hereinafter provided.
4. Exercisability. This Option is exercisable, subject to the terms and
conditions of the Plan and this Agreement, at any time from and after the date
hereof, and it shall remain exercisable until the close of business on March 30,
2008 (the "Exercise Period").
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of Director for Federal income tax purposes with
respect to the Option, Director may be required to pay to the Company, or make
arrangements satisfactory to the Company 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 under the Plan and
pursuant to this Agreement shall be conditional upon such payments or
arrangements with the Company, if such payments or arrangements are required,
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 Director from the
Company.
6. 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 which 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 which 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 event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon
such reclassification, reorganization, merger or consolidation 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.
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7. Method of Exercise.
7.1. Notice to the Company. The Option shall be exercised in whole or in
part by written notice in 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.
7.2. Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to Director as soon as practicable after payment therefor.
7.3. Payment of Purchase Price.
7.3.1. Cash Payment. 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.
7.3.2. Cashless Payment. The Company, in its sole discretion, may allow
Director to use Common Stock of the Company owned by him to pay the purchase
price for the Option Shares (and any required withholding taxes) by delivery of
stock certificates in negotiable form which 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, as
defined below.
7.3.3. Fair Market Value. "Fair Market Value", unless otherwise required by
any applicable provision of the Internal Revenue Code of 1986, as amended, or
any regulations issued 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 the last trading
day preceding the date of exercise in accordance with Section 7.3.2, above, 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 the last trading day preceding the
date of exercise in accordance with Section 7.3.2, above, 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 Company shall determine, in good faith.
8. Nonassignability. The Option shall not be assignable or transferable, without
the consent of the Company, except by will or by the laws of descent and
distribution in the event of the death of Director. No transfer of the Option by
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/or 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.
9. Company Representations. The Company hereby represents and warrants to
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
Director in accordance with the terms and conditions hereof, will
be duly and validly issued and fully paid and non-assessable.
10. Director Representations. Director hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares
for his own account and not with a view towards the distribution
thereof;
(ii) he has received a copy of the Plan as in effect as of the date of
this Agreement;
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(iii)he has received a copy of all reports and documents required to
be filed by the Company with the Commission pursuant to the
Exchange Act within the last 24 months and all reports issued by
the Company to its shareholders;
(iv) he understands that he must bear the economic risk of the invest
ment in the Option Shares, which cannot be sold by him unless
they are registered under the Securities Act of 1933 (the "1933
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;
(v) in his position with the Company, he 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 information or can acquire
it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (iii)
above;
(vi) he 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
(vii)the certificates evidencing the Option Shares shall bear the
following legend:
"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."
(viii)the agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him 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.
11. Restriction on Transfer of Option Shares.
(a) Anything in this Agreement to the contrary notwithstanding, Director
hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him without
registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration
requirements is available thereunder, and (ii) 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, Director
hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him 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.
12. Miscellaneous.
12.1. Notices. All notices, requests, deliveries, payments, demands and
other communications which 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 to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
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12.2. Conflicts with Plan. In the event of a conflict between the
provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall in all respects be controlling.
12.3. Director and Stockholder Rights. Director shall not have any of the
rights of a shareholder with respect to the Option Shares until such shares have
been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Director any right to a continued
directorship position with the Company or any subsidiary thereof, nor shall it
interfere in any way with the right of the Company to terminate such
directorship in accordance with the provisions regarding such termination set
forth in the Company's Certificate of Incorporation and By-laws and/or under
applicable laws of the State of New York.
12.4. 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.
12.5. 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 Director and the Company.
12.6. 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.
12.7. 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).
12.8. 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.
BIG CITY BAGELS, INC. Address: 00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
By: ------------------------------
Xxxxx Xxxxxx, President
and Chief Operating Officer
DIRECTOR: Address:
----------------------------------- -------------------------------
XXXX XXXXXXX
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
-------------------------
DATE
Big City Bagels, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: The Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of March 31, 1998
with Big City Bagels, Inc. (the "Company"), I hereby irrevocably elect to
exercise the right to purchase _________ shares of the Company's common stock,
par value $.001 per share ("Common Stock").
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 "Big City Bagels, Inc." 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 Section 7.3.3 of the Stock Option Agreement)
of $_________.
I hereby represent and warrant to, and agree with, the Company that:
(i) I am acquiring the Option and shall acquire 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 the Plan and all reports and documents
required to be filed by the Company with the Commission pursuant
to the Exchange Act within the last 24 months and all reports
issued by the Company to its shareholders;
(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
"1933 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) 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 1933 Act or an exemption
therefrom as provided herein; and
(vii)the certificates evidencing the Option Shares shall bear the
following legend:
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"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."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
_____________________________________ ____________________________________
(Signature) (Address)
_____________________________________ ____________________________________
(Print Name)
____________________________________
(Social Security Number)
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