EXHIBIT 10.33(a)
▇▇▇▇▇▇ OPTION AGREEMENT
NEITHER THIS OPTION NOR THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF THIS OPTION HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM
REGISTRATION UNDER THE ACT, BUT ONLY UPON A EMPLOYEE HEREOF FIRST HAVING
OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE ISSUER, OR OTHER COUNSEL
REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION IS EXEMPT
FROM REGISTRATION UNDER THE ACT.
OPTION AGREEMENT
This AGREEMENT (the "Option Agreement") is dated this 8th day
of March, 2004 ("Grant Date") by and between Avenue Group, Inc., a Delaware
corporation (the "Issuer") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Employee") with respect to the
Issuer's grant to Employee of a non-transferable and non-qualified stock option
(the "Option") to acquire up to Two Million Two Hundred and Fifty Thousand
(2,250,000) shares of the Issuer's common stock (collectively, the "Option
Shares") pursuant to the terms of the Issuer's Amended and Restated 2000 Stock
Option Plan (the "Plan").
RECITALS
WHEREAS, the Issuer has adopted and the shareholders of the
Issuer have approved the Plan, pursuant to which the Issuer is authorized to
grant stock options to employees of the Issuer;
WHEREAS, Employee has received and reviewed a copy of the
Plan, a copy of which is attached hereto and made a part hereof as Exhibit "A";
WHEREAS, Employee has entered into an Employment Agreement
with the Issuer of even date herewith to serve of the Issuer's Director of
Strategic Planning (the "Employment Agreement"); and
WHEREAS, the Board of Directors of the issuer believes it to be in the
best interests of the Issuer to reward and create, through the grant of the
Option, an additional incentive for the Employee's continued employment with the
Issuer.
NOW THEREFORE, in consideration of the premises and intending to be
legally bound, the parties agree as follows:
AGREEMENT
1. Grant of Option.
The Issuer hereby grants to Employee, effective as of the date
hereof, the Option (the "Grant Date"), upon the terms and subject to the
conditions set forth in this Option Agreement, to purchase the Option Shares, at
a per share exercise price equal to fifteen cents ($0.15) per share (the
"Exercise Price"). The Option granted to Employee pursuant to this Agreement
shall be granted pursuant to the Plan as a non-qualified stock option and is not
intended to qualify as an "incentive stock option" under Section 422 of the
Internal Revenue Code of 1986, as amended.
2. Administration.
The Plan provides that the Plan Administrator shall be the
Board of Directors of the Issuer (the "Administrator"). Subject to the
provisions of the Plan, the Administrator shall have sole authority and
discretion to construe and interpret the Plan and of this Option Agreement and
the Option granted and to make all of the determinations necessary or advisable
for administration of the Plan and this Option The interpretation and
construction by the Administrator of any provision of the Plan, or of this
Option Agreement, shall be final and binding upon all parties. No member of the
Board shall be liable for any action or determination undertaken or made in good
faith with respect to the Plan or this Agreement.
3. Term of Option.
The Option shall terminate and expire at 5:00 p.m., Pacific
Standard Time, upon the first to occur of either of the following (the "Option
Expiration Date"):
(a) the third anniversary of the "Effective Date" of
the "Registration Statement", as such terms are defined in Section 8 below;
(b) one year after the date Employee's employment
with the Issuer terminates for whatever reason; or
(c) March 8, 2014.
Upon the occurrence of the Option Expiration Date no further
Options may be exercised and all unexercised Options shall automatically expire
and be of no further force or effect.
4. Vesting of Option.
The Option shall fully vest and be fully exercisable as of the
Effective Date; provided, however, that no portion of any vested Option may be
exercised unless and until any then-applicable requirements of all state and
federal securities laws shall have been fully complied with to the reasonable
satisfaction of the Issuer and its counsel.
5. Exercise of Option.
There is no obligation to exercise the Option, but any Option
Shares may be exercised in whole or in part at any time or from time to time on
or prior to the Option Expiration Date. The Option must be exercised by delivery
to the Issuer of:
(a) written notice of exercise in substantially the
form of Exhibit "B" attached to this Option; and
(b) payment of the Exercise Price of the Option
Shares pursuant to Section 6.
Upon receipt of the foregoing, the Issuer shall promptly issue
in the name of the Employee one or more stock certificates evidencing the Option
Shares issued pursuant to such exercise and deliver such certificate(s) to the
Employee in such denominations as the Employee shall request. Notwithstanding
anything to the contrary contained elsewhere herein, no portion of the Option
may be exercised prior to the Effective Date, as such term is defined pursuant
to Section 8 below.
6. Delivery of Shares; Payment of Exercise Price.
Payment of the Exercise Price shall be made in United States
currency by wire transfer to an account designated by the Issuer or by cash or
by delivery of a certified check, bank draft or postal or express money order
payable to the order of the Issuer or such other manner as may be permissible
under the Plan and expressly approved by the Administrator.
7. Restrictions on Transfer of Option and Option Shares.
This Option is non-transferable and Employee may not offer,
sell, transfer, pledge, hypothecate or assign either by operation of law or
otherwise ("Transfer") all or any portion of the Option or the Option Shares
prior to their exercise. In addition, the Employee may not Transfer all or any
portion of the Option Shares except pursuant to a registration statement which
has become effective and is current under the Act or pursuant to a specific
exemption from the registration requirements of the Act and then with the
written opinion of legal counsel acceptable to the Issuer to such effect. Any
purported transfer of all or any portion of the Option or the Option Shares in
violation of this Section shall be null and void.
8. Registration Rights.
The Issuer has agreed, subject to the requirements and
restrictions of the Act to include the issuance and sale of the Options and
Option Shares under the Plan in a Form S-8 registration statement under the Act
(the "Registration Statement"). The Issuer has agreed to utilize its best
commercially reasonable efforts to (i) file the Registration Statement with the
Securities and Exchange Commission (the "SEC") as soon as practicable after the
Grant Date which shall be within ninety (90) days after the Grant Date, and (ii)
to take such further actions and file such amendments to the Registration
Statement as may be necessary so that the Registration Statement is deemed or
declared effective by the SEC as soon as reasonably practicable after the filing
thereof (the "Effective Date"). The Employee shall cooperate with the Issuer in
connection with the preparation, filing and effectiveness of the Registration
Statement and shall take such actions as are reasonably requested by the Issuer
in connection therewith.
9. No Rights as Stock Holder.
Employee shall have no rights as a stockholder of the Issuer
with respect to the Option Shares until the date the exercise notice is received
by the Issuer together with payment (the "Exercise Date"). No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the Exercise Date.
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10. Taxes.
Employee agrees to be responsible for all United States,
Canadian, federal, state, provincial or local taxes arising out of or relating
to Issuer's grant or Employee's exercise of the Option, including but not
limited to any employer or employee withholding taxes which may become due with
respect thereto ("Taxes") and agrees to indemnify the Issuer against any claims,
losses, damages, charges or judgments or any kind whatsoever relating to such
Taxes. Issuer shall be entitled to deduct from Employee's salary withholding
taxes, if any, due upon the exercise of all or any portion of the Option at the
applicable rate.
11. Adjustment.
Subject in all events to the provisions of the Plan:
(a) If outstanding shares of the Common Stock of the
Issuer shall be subdivided into a greater number of shares, or a dividend in
Common Stock or other securities of the Issuer convertible into or exchangeable
for Common Stock (in which latter event the number of shares of Common Stock
issuable upon the conversion or exchange of such securities shall be deemed to
have been distributed), shall be paid or distributed in respect to the Common
Stock of the Issuer, the number of Option Shares for which this Option may be
exercised immediately prior to such subdivision or at the record date of such
dividend shall, simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend or other distribution, be
proportionately increased, and conversely, if outstanding shares of the Common
Stock of the Issuer shall be combined into a smaller number of shares, the
number of Option Shares for which this Option may be exercised prior to such
combination shall, simultaneously with the effectiveness of such combination, be
proportionately decreased. Any adjustment to the Option Shares under this
Section 11(a) shall become effective at the close of business on the date the
subdivision or combination referred to herein becomes effective.
(b) In the event of any recapitalization, consolidation,
merger or reorganization ("Reorganization"), where the Issuer shall not be the
surviving entity the Employee of the Options shall at the sole discretion of the
Issuer be entitled to either (1) receive, and provision shall be made therefore
in any agreement relating to any such Reorganization, upon exercise of the
Option the kind and number of shares of Common Stock or other securities or
property (including cash) of the Issuer, which the Employee would have received
in connection with the Reorganization as the Employee of the number of shares of
Common Stock into which the Option could have been exercised in full immediately
prior to such Reorganization; and in any such case appropriate adjustment shall
be made in the application of the provisions herein set forth with respect to
the rights and interests thereafter of the Employees, to the end that the
provisions set forth herein (including the specified changes and other
adjustments to the number of Option Shares) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares, to such other securities
or property thereafter receivable upon issuance of the Option Shares or (b) no
less than thirty (30) days prior notice of such Reorganization, during which
time the Employee may elect to exercise all Options which have then vested. In
such event all unexercised Options shall expire upon the consummation of the
Reorganization. The provisions of this Section 11(b) shall similarly apply to
successive Reorganizations. For purposes of this Section 11, the term
"Reorganization" shall include the acquisition of the Issuer by another entity
by means of a merger, consolidation or other reorganization.
(c) In addition to the adjustments to the number of Option
Shares or other property receivable upon exercise of the Options as provided in
Sections 11(a) and (b) above, the Exercise Price per Option Share shall be
appropriately adjusted so that the aggregate exercise price shall remain
constant.
12. Modification.
The Administrator may, in its sole discretion and subject to
the provisions of the Plan, modify, extend or renew the Option or accept the
surrender of, and authorize the grant of a new option in substitution for the
Option (to the extent not previously exercised).
13. General Provisions.
(a) Further Assurances. Employee shall promptly take all
actions and execute all documents requested by the Issuer, which the Issuer
deems to be reasonably necessary to effectuate the terms and intent of this
Option.
(b) Notices. All notices, requests, demands and other
communications under this Option shall be in writing and shall be given to the
parties hereto as follows:
If to the Issuer, to:
Avenue Group, Inc.
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Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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If to Employee, to:
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The Regional Group Companies, Inc.
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or at such other address or addresses as may have been furnished by
either party in writing to the other party hereto. Any such notice, request,
demand or other communication shall be effective (i) if given by mail, two days
after such communication is deposited in the mail by first-class certified mail,
return receipt requested, postage prepaid, addressed as aforesaid, or (ii) if
given by any other means, when delivered at the address specified in this
subparagraph (b).
(c) Governing Law, Resolution of Disputes.
(i) This Option Agreement shall be governed by and
construed in accordance with the Laws of the State of California applicable to
contracts made in, and to be performed in, that state.
(ii) The parties hereto agree that all disputes
arising out of or relating to this Option Agreement, including but not limited
to the interpretation or enforcement of any the terms hereof (the "Dispute")
shall be adjudicated in accordance with the terms of Section 14 of the
Employment Agreement.
BY INITIALING IN THE SPACE BELOW, THE ISSUER AND THE EMPLOYEE ARE
AGREEING TO HAVE ANY DISPUTE ARISING OUT THIS OPTION AGREEMENT DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY THE LAWS OF THE STATE
OF CALIFORNIA PURSUANT TO THE TERMS OF THE "ARBITRATION OF DISPUTES"
PROVISION OF THE EMPLOYMENT AGREEMENT AND THE ISSUER AND THE COMPANY ARE GIVING
UP ANY RIGHTS THEY MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR
JURY TRIAL. BY INITIALING IN THE SPACE BELOW THE ISSUER AND THE EMPLOYEE ARE
GIVING UP THEIR RESPECTIVE JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION OF
THE EMPLOYMENT AGREEMENT. IF EITHER PARTY REFUSES TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, SUCH PARTY MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE LAWS OF THE STATE OF CALIFORNIA. THE EMPLOYEE AGREES THAT
EMPLOYEE'S AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
OF THE EMPLOYMENT AGREEMENT TO NEUTRAL ARBITRATION.
EMPLOYEE'S INITIALS ______
ISSUER'S INITIALS ______
(d) Amendment; Waiver. This Option Agreement shall be binding
upon and inure to the benefit of the Employee and the Issuer and their
respective successors, heirs and personal representatives. No provision of this
Option Agreement may be amended or waived unless in writing signed by the
Employee and the Issuer. Waiver of any one provision of this Option Agreement
shall not be deemed to be a waiver of any other provision.
(e) Time is of the Essence. All times and dates in this Option
Agreement and each and every provision hereof in which time is an element are of
the essence; provided, however, that if the time period for exercising any
right, option or election provided in this Option Agreement or the time period
for the performance of any act required under this Option Agreement falls on a
Saturday, Sunday or legal or bank holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.
(f) Counterparts. This Option Agreement may be executed in two
(2) or more counterparts, each of which shall be considered an original and all
of which shall be considered one and the same agreement and shall become
effective when two (2) or more counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that all parties
need not sign the same counterpart.
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(g) Severability. If any term or other provision of this
Option Agreement is invalid, illegal or unenforceable, all other provisions of
this Option Agreement shall remain in full force and effect so long as the
economic or legal substance of the Agreement is not affected in any manner
materially adverse to any party. In the event that the enforceability of any
non-competition or similar covenants contained in this Option Agreement is
called into question as the result of time, geographical or other applicable
limitations specified in such covenants, such time, geographical or other
applicable limitations shall be deemed modified to the minimum extent necessary
to render the applicable provisions of such covenants enforceable.
(h) Construction; Interpretation. The headings contained in
this Option Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Option Agreement. Article,
Section, Schedule, Exhibit, recital and party references are to this Option
Agreement unless otherwise stated. No party, nor the counsel of such party,
shall be deemed the drafter of this Option Agreement for purposes of construing
the provisions of this Option Agreement, and all provisions of this Option
Agreement shall be construed in accordance with the fair meaning of such
provisions, and not strictly for or against any party. Except as defined herein,
capitalized terms shall have the meaning ascribed to them in the Plan.
(i) Entire Agreement; Amendments and Waivers. The terms and
conditions of this Option Agreement are in all respects governed by and subject
to the terms of the Plan. In the event of a conflict between the terms of this
Option Agreement and the terms of the Plan the terms of the Plan shall be deemed
to prevail. Expressly subject to the foregoing, this Option Agreement along with
Section 14 of the Employment Agreement, together with all Schedules and Exhibits
hereto, constitutes the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. No
supplement, modification or waiver of this Option Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Option Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
IN WITNESS WHEREOF, the Issuer has caused this Option Agreement to be
executed as of the date first above written.
AVENUE GROUP, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Executive Vice President
AGREED TO AND ACCEPTED THIS
8th DAY OF MARCH, 2004.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT "B"
NOTICE OF EXERCISE
(To be signed only upon exercise of the Option)
To: Avenue Group, Inc.
The undersigned hereby irrevocably elects to exercise at
fifteen cents ($0.15) per share the purchase right represented by the Option
purchased by the undersigned pursuant to that Option Agreement dated March __,
2004 and to purchase thereunder _______ shares (the "Option Shares") of Common
Stock of Avenue Group, Inc., a Delaware corporation (the "Issuer") for the
aggregate sum of $___________. In connection therewith enclosed is a check
payable to the Issuer in the sum of $___________ reflecting the full exercise
price for the Option Shares.
By: _______________________________