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EXHIBIT 6.5
HAWAIIAN VINTAGE CHOCOLATE COMPANY, INC.
STOCK OPTION AGREEMENT
AGREEMENT made as of this 28 day of September, 1998 (the "Grant Date")
by and between HAWAIIAN VINTAGE CHOCOLATE COMPANY, INC., a Hawaii corporation
(hereinafter called the "Corporation"), and XXXXX XXXXX (hereinafter called
"Optionee").
WITNESSETH:
RECITALS
A. The Board of Directors of the Corporation (the "Board") has adopted a
resolution approving this Stock Option Agreement.
B. This Stock Option Agreement is granted without regard to qualifications or
under any particular section of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject and upon the terms and conditions set forth
in this Agreement, the Corporation hereby grants to Optionee, as of the Grant
Date, an option (the "Option") to purchase up to FIVE HUNDRED THOUSAND (500,000)
shares (the "Optioned Shares") of the Corporation's Common Stock from time to
time during the Option term at the Option price of TWO DOLLARS ($2.00) per
share.
2. OPTION TERM. The specified term of this Option shall be the period
commencing on the Grant Date and, unless sooner terminated in accordance with
Paragraphs 6 or 8(a), terminating upon the expiration of seven (7) years from
the date Optionee shall cease to be an employee of the Corporation. Upon the
expiration of the Option term or upon its sooner termination under Paragraphs 6
or 8(a), this Option shall cease to be exercisable and have no further force or
effect whatsoever.
3. OPTION NONTRANSFERABLE: EXCEPTION. This Option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution and may be exercised, during Optionee's lifetime, only
by Optionee, or his duly appointed representative.
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4. DATES EXERCISABLE. The Option shall become exercisable in four (4)
cumulative installments on the following dates:
September 28, 1998 125,000 Optioned Shares (25%)
September 28, 1999 125,000 Optioned Shares (25%)
September 28, 2000 125,000 Optioned Shares (25%)
September 28, 2001 125,000 Optioned Shares (25%)
Optioned Shares as to which the Option has become exercisable pursuant to this
paragraph may be purchased any time after the applicable exercise date and
before the expiration or termination of the Option.
5. EXERCISABLE IN INSTALLMENTS. Exercisable installments may be
exercised in whole or in part and to the extent not exercised shall accumulate
and be exercisable at any time on or before the expiration or sooner termination
of the Option term.
6. ACCELERATED TERMINATION OF OPTION TERM. The Option term specified in
Paragraph 2 shall terminate prior to the expiration of its term should one of
the following provisions become applicable:
(i) Should Optionee cease to be an employee of the Corporation or
its subsidiaries (other than by reason of death) at any time during the Option
term, then this Option may not be exercised for more than the number of Optioned
Shares for which it is exercisable at the date of Optionee's cessation of
employee status.
(ii) Should Optionee die while this Option is outstanding, the
executors or administrators of Optionee's estate or Optionee's heirs or legatees
(as the case may be) shall have the right to exercise this Option, but only with
respect to that number of Optioned Shares, if any, for which the Option is
exercisable on the date of Optionee's death. Such right shall lapse and this
Option shall cease to be exercisable upon the expiration of the one (1) year
period measured from the date of Optionee's death or upon the expiration of
seven (7) years from the date Optionee shall cease to be an employee of the
Corporation, whichever occurs first.
7. ADJUSTMENT IN OPTIONED SHARES. In the event of any change in the
outstanding shares of Common Stock of the Corporation resulting from any merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, exchange of shares or other change in capital structure
effected without receipt of consideration, then unless such changes result in
the termination of all outstanding options pursuant to the provisions of
Paragraph 8(a), the Board shall make appropriate adjustments to the number of
Optioned Shares subject to this Option and to the Option price per share in
order to prevent the dilution of benefits under this Agreement. The adjustments
determined by the Board shall be final, binding and conclusive.
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8. ACCELERATION AND TERMINATION OF OPTION.
(a) In the event the Corporation or its shareholders enter into
an agreement to dispose of all or substantially all of the assets or outstanding
capital stock of the Corporation by means of sale, merger, reorganization or
liquidation, then this Option, if outstanding at such time, shall become
exercisable during the fifteen (15) days immediately prior to the scheduled
consummation of such sale, merger, reorganization or liquidation, with respect
to the full number of Optioned Shares at the time covered by this Option. No
such acceleration of exercise dates shall occur, however, if the terms of the
agreement provide as a prerequisite to the consumption of such sale, merger,
reorganization or liquidation that outstanding options under nonqualified Stock
Option Agreements (including this Option) are either to be assumed by the
successor corporation or parent thereof or are to be replaced with comparable
options to purchase shares of capital stock of the successor corporation or
parent thereof, and that any such exercise of an option during such fifteen (15)
day period shall be conditioned upon the consummation of such transaction,
except to the extent that an Optionee may indicate, in writing, that such
exercise is unconditional with regard to all or part of the unaccelerated
portion of the Option. The determination of such comparability shall be made by
the Board and its determination shall be final, binding and conclusive. Upon
consummation of such sale, merger, reorganization or liquidation, this Option
(whether or not accelerated) shall terminate, unless assumed by the successor
corporation or parent thereof.
(b) This Agreement shall not in any way affect the right of the
Corporation to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this Option with respect to all or any
part of the Optioned Shares for which this Option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, the Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Provide the Secretary of the Corporation with written
notice of such exercise, specifying the number of Optioned Shares with respect
to which the Option is being exercised;
(ii) Pay the Option price in one or more of the following
alternative forms: (A) full payment, in cash or check payable to the
Corporation's order, of the option price for the Optioned Shares being
purchased; (B) full payment in shares of Common Stock of the Corporation having
a Fair Market Value on the Exercise Date (as such terms are defined below) equal
to the Option price for the Optioned Shares being purchased; (C) a combination
of such shares of Common Stock of the Corporation valued at Fair Market Value on
the Exercise Date and cash or check payable to the Corporation's order equal in
the aggregate to the Option price for the Optioned Shares being purchased; and
(D) or options can be exercised on a "cashless" basis with the Corporation; and
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(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the Option, if other than Optionee,
has/have the right to exercise this Option on behalf of and for Optionee.
(b) The Option price per share has been fixed by the Board.
(c) No fractional shares shall be issued, and fractional shares
remaining in any option shall be rounded down to the next nearest whole number
of shares.
(d) The Exercise Date is the date the Secretary of the
Corporation receives the notice described in Paragraph 9(a)(i).
(e) "Fair Market Value on the Exercise Date" means the average of
the last bid price and last asking price, if any, and if none, the last trading
price, on the last trading day of the Corporation's Common Stock preceding the
Exercise Date, provided neither the asking price, the bid price or the last such
trade, involved Optionee, directly or indirectly. Common Stock not registered in
accordance with the Securities Act of 1933, or not saleable through a stock
broker and transferable without such registration, does not have the Fair Market
Value on the Exercise Date defined herein.
10. CERTIFICATE LEGEND. Each certificate evidencing the issuance of
0ptioned Shares shall have imprinted on it the following legend condition:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
("ACT") AND ARE RESTRICTED SECURITIES. THE RESTRICTED
SECURITIES HAVE BEEN ACQUIRED FOR HOLDER'S OWN ACCOUNT
AND NOT WITH A VIEW TO DISTRIBUTE THEM TO THE PUBLIC.
RESTRICTED SECURITIES MUST BE HELD INDEFINITELY UNLESS
THEY ARE SUBSEQUENTLY REGISTERED UNDER THE ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 8(a), the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of
Corporation.
12. LIABILITY OF CORPORATION. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this Option shall relieve the Corporation of any liability in respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained.
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13. WITHHOLDING. Optionee hereby agrees to make appropriate arrangement
with the Corporation or subsidiary employing Optionee for satisfaction of any
federal, state or local income tax withholding requirements and federal social
security employee tax requirements applicable to the exercise of this Option (if
any).
14. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of Hawaii.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in duplicate on its behalf by its duly authorized officer and Optionee
has also executed this Agreement in duplicate, a1l as of the day and year
indicated above.
HAWAIIAN VINTAGE CHOCOLATE COMPANY, INC.
BY: /s/ XXX XXXXX
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Xxx Xxxxx, Chief Executive Officer
/s/ XXXXX XXXXX
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Xxxxx Xxxxx, Optionee
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