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Exhibit 10.77
OPTION AGREEMENT
THIS AGREEMENT is made effective as of June 1, 1997 by and between
Xxxxxxx XxXxxxx (hereinafter referred to as "Optionee"), and Decora Industries,
Inc., a Delaware corporation (hereinafter referred to as "Optionor").
RECITALS:
WHEREAS, Optionee is the Vice President of Operations of Optionor; and
WHEREAS, to compensate Optionee for his services to Optionor, Optionor
desires to grant to Optionee and Optionee is desirous of acquiring an option to
purchase shares of the common stock of Optionor, subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereby agree as follows:
1. Incorporation of Recitals. The parties hereby incorporate by this
reference the recitals set forth above.
2. Grant of Option. Subject to the terms and conditions hereinafter set
forth, Optionor hereby gives and grants to Optionee the right and option to
purchase heretofore authorized but unissued common shares of Optionor at such
time and for the purchase price specified below.
A. Optionor hereby gives and grants to Optionee, an option to
purchase up to 100,000 shares of the common stock of Optionor. The option shall
be exercisable at an exercise price of $1.00 (the fair market value of a share
of common stock as of the date hereof).
B. Such options shall all be vested.
C. The options shall be exercisable for three years following
vesting. Notwithstanding the foregoing, upon termination of Optionee's
employment with Decora Manufacturing no further options shall vest and Optionee
shall have a maximum of seven months to exercise the vested options hereunder.
3. Exercise of Option. Optionee may exercise any option granted
hereunder by notifying Optionor in writing of its intention to exercise such
option. A closing date shall then be agreed to in good faith no later than 30
days after the notice, at which time Optionee shall pay the purchase price of
the Shares being purchased, and Optionor shall deliver to Optionee the
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certificates for shares duly endorsed. Optionee may purchase all or any part of
the Shares subject to options granted hereby.
4. Representations. Optionor represents and warrants to Optionee that
Optionee, upon proper exercise, shall receive good and marketable title to the
shares of Optionor underlying the options being granted hereby, free of all
pledges, liens and encumbrances, except as stated in paragraph 5.
5. Representations and Warranties of Optionee. Optionee hereby
represents and warrants that:
A. The options granted hereby and the Shares which will be
purchased by and delivered to Optionee upon exercise of
such options are being acquired by Optionee for his own
account and not with a view to resale or other disposition
thereof.
B. Optionee will not sell, transfer, or make any other
disposition of the shares to be purchased and delivered to
Optionee hereunder upon the exercise of such option unless
and until (a) such option or shares, as applicable, are
included in a registration statement or a post-effective
amendment under the Securities Act which has been filed by
the Optionor and declared effective by the Securities and
Exchange Commission (the "SEC"), or (b) in the opinion of
counsel for the Optionor, no such registration statement or
post-effective amendment is required, or (c) the SEC has
first issued a "no action" letter regarding any such
proposed disposition of any option or the shares.
6. Federal and State Securities Law Requirements. The obligation of the
Optionor to deliver and transfer the shares to the Optionee upon any exercise of
any option shall be subject to the following:
A. Optionor may require Optionee, as an additional condition
of its obligation to deliver the shares upon exercise of
any option hereunder, to make any representations and
warranties (including without limit those set forth in
Paragraph 5 hereof) with respect to the shares as may, in
the opinion of counsel to Optionor, be required to ensure
compliance with the Securities Act, the securities laws of
any state, or any other applicable law, regulation, or rule
of any governmental agency.
B. Each certificate representing the shares issued pursuant to
this Agreement shall bear whatever legends are required by
federal or state law or by any governmental agency. In
particular, unless an appropriate registration statement is
filed pursuant to the Securities Act with respect to the
shares,
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each certificate representing such shares shall be
endorsed on its face with the following legend or its
equivalent:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
SECURITIES MAY BE SOLD OR TRANSFERRED ONLY IF THEY HAVE
BEEN REGISTERED UNDER SAID ACT OR THERE EXISTS AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT OR THE RULES
AND REGULATIONS THEREUNDER EVIDENCED BY A NO-ACTION LETTER
OR AN OPINION OF COUNSEL TO THE ISSUER OR TO THE HOLDER
HEREOF REASONABLY SATISFACTORY TO THE ISSUER.
7. Restrictions. Optionee:
A. Shall not be entitled to any type of dividend declared by
Optionor, unless and until an option is exercised; and
B. Shall not be entitled to any voting rights by virtue of an
option; and
C. Acknowledges that the options granted hereby are personal
to Optionee and that Optionee may not sell, assign,
transfer or otherwise dispose of such options to any other
person.
8. Anti-Dilution. If prior to the exercise of any option granted
hereunder Optionor shall have effected one or more stock split-ups, stock
dividends, or other increases or reductions of the number of Shares of its
common stock outstanding without receiving compensation therefor in money,
services or property, the number of Shares of common stock subject to the
options hereby granted shall (a) if a net increase shall have been effected in
the number of outstanding shares of Optionor's common stock, be proportionately
increased and the cash consideration payable per Share shall be proportionately
reduced; and (b) if a net reduction shall have been effected in the number of
outstanding Shares of Optionor's common stock, be proportionately reduced and
the cash consideration payable per Share be proportionately increased.
9. Notice and Opportunity to Cure Default. In the event of a perceived
default of the provisions of this agreement, Optionor agrees to provide Optionee
and his counsel written notice of any default and Optionor shall have 10 days
from receipt of said notice to cure the stated default.
10. Agreement to Perform Necessary Acts. The parties hereto agree to
cooperate fully with one another in executing all documents, certificates,
notices, filings and the like and performing all acts reasonably necessary to
carry out the intent of this agreement.
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11. Assignment and Transfer. No option granted hereby may be assigned by
Optionee without the prior written consent of Optionor.
12. Amendments. This agreement may not be modified, amended or changed
except by an instrument in writing signed by the parties hereto.
13. Arbitration: Any claim arising out of this Agreement shall be
settled by binding arbitration in Albany, New York in accordance with the
Commercial Rules of the American Arbitration Association. The arbitrator shall
be an active member of the New York bar. The arbitrator shall prepare an award
in writing which shall include factual findings and any legal conclusions on
which the decision is based. Judgement upon an award so rendered may be entered
in any court having jurisdiction
IN WITNESS WHEREOF, the parties have executed this option Agreement as
of the day and year first above written.
OPTIONOR OPTIONEE
DECORA INDUSTRIES, INC.
By:__________________________
Its:_________________________ ----------------------
XXXXXXX XXXXXXX
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