STOCK OPTION AGREEMENT
AGREEMENT made as of the 24th day of November, 1995,
(the "Date of Grant") by and between ACORN VENTURE CAPITAL
CORPORATION, a Delaware corporation, having its office and
principal place of business located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company") and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, residing at ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Optionee").
W I T N E S S E T H:
WHEREAS, on November 19, 1995, the Stock Option
Committee of the Company authorized the grant to the Optionee
of an option (the "Option") to purchase an aggregate of
150,000 shares of the authorized but unissued Common Stock of
the Company, $.01 par value (the "Common Stock"), pursuant to
the Company's 1991 Stock Option Plan, as amended (the "1991
Plan"), conditioned upon the Optionee's acceptance thereof
upon the terms and conditions set forth in this Agreement; and
WHEREAS, the Optionee desires to acquire the Option
on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, and in consideration of the
foregoing and of the terms and conditions herein contained,
the parties hereto agree as follows:
1. Grant of Stock Option. Subject to the terms
and conditions of the Plan, the Company hereby grants to the
Optionee, as a matter of separate agreement and not in lieu of
salary, the Option to purchase all or any part of an aggregate
of 150,000 shares of Common Stock (the "Option Shares") on the
terms and conditions set forth herein.
The Option has been granted to the Optionee under
the Plan, a copy of which is attached hereto. All of the
terms, conditions and other provisions of the Plan are hereby
incorporated by reference into this Agreement. Capitalized
terms used in this Agreement but not defined herein shall have
the same meanings as in the Plan.
2. Exercise Price. The exercise price of the
Option shall be $.875 per share, subject to adjustment as
hereinafter provided.
3. Exercise Period. The Option shall be
exercisable during the ten (10) year period (the "Exercise
Period") commencing on the Date of Grant and terminating at
the close of business on November 23, 2005 (the "Expiration
Date"); provided, however, that the Option shall only be
exercisable in cumulative installments, during the Exercise
Period, as follows:
(i) To the extent of 50,000 immediately; and
(ii) To the extent of an additional 100,000 of the
Option Shares any time after February 15, 1996.
4. Nonqualified Option; Withholding Tax. The
Option shall not be deemed an "Incentive Stock Option" under
the Internal Revenue Code of 1986, as amended ("the Code").
The Optionee will be subject to a withholding tax on the
difference between the purchase price of the Option Shares and
their market value on either (x) the exercise date, or (y) if
the Optionee is subject to Section 16(b) of the Securities
Exchange Act of 1934, in the case of any portion of the Option
exercised within six months of the Date of Grant with respect
to which a valid election under Section 83(b) of the Code is
not in effect, the first day after six months have elapsed
from the Date of Grant. Payment for said taxes shall be made
to the Company prior to or at time said tax is due.
5. Adjustments. If and to the extent that the
number of issued shares of Common Stock shall be increased or
reduced by split-up, reclassification, distribution of a
dividend payable in shares, or the like, the Company shall
proportionately adjust the number and kind of Option Shares,
and the exercise price of the Option, to such extent and in
such manner as shall as closely as possible maintain
Optionee's rights hereunder.
6. Method of Exercise.
6.1 Notice to the Company. The Option shall be
exercised by written notice in substantially 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 whole Option
Shares specified in the notice up to the number then permitted
to be exercised.
6.2 Delivery of Option Shares. The Company
shall make prompt delivery of the Option Shares upon receipt
of good and available funds in payment of the exercise price
and, if any, withholding taxes, provided that if any law or
regulation requires the Company to take any action with
respect to the Option Shares specified in such notice before
the issuance thereof (and the Company shall use its best
efforts to take such action), then the date of delivery of
such Option Shares shall be extended for the period necessary
to take such action. The Optionee shall not have any of the
rights of a stockholder with respect to the Option Shares
until such Shares have been issued after the due exercise of
the Option.
6.3 Additional Documents. In addition, the
Board of Directors of the Company may require, as a condition
to the sale of any Option Shares, that the Optionee deliver to
the Company such documents, including such appropriate
investment representations, as may reasonably be required by
counsel for the Company to effectuate compliance with
applicable securities laws.
6.4 Payment of Purchase Price. The purchase
price shall be paid in cash at the time of exercise. Any
required withholding tax shall be paid in cash at the time set
forth in Section 4. Such payments shall be made by means of
wire transfer, certified or bank check or personal check
payable to the Company.
6.5 Notice of Sale After Exercise. The
Optionee agrees that if Optionee transfers any of the Option
Shares within one year of the date of exercise or within two
years from the Date of Grant, Optionee will promptly notify
the Company in writing of the details of such transfer.
7. Nonassignability. The Option hereby granted is
nonassignable and may not be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbered or
charged, in any way (whether by operation of law or otherwise)
except in the event of the death of Optionee in accordance
with the terms of the Plan and shall not be subject to
execution, attachment or similar process. No transfer of the
Option by the Optionee by will or 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 such other evidence as the Company
may deem necessary to establish the validity of the transfer
and the acceptance of the transferee of the terms and
conditions of the Option. Upon any attempt to alienate, sell,
assign, hypothecate, pledge, exchange, transfer, encumber or
charge or otherwise dispose of the Option or any right or
privilege conferred hereby, contrary to the provisions hereof,
or upon the levy of any attachment or similar process on the
rights conferred hereby, the Option and the rights and
privileges conferred hereby shall immediately become null and
void.
8. Company Representations. The Company hereby
represents and warrants to the Optionee 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;
(ii) the Option Shares, when issued and
delivered by the Company to the Optionee in accordance
with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable; and
(iii) the Company hereby undertakes to register
the shares of Common Stock reserved for issuance pursuant
to the Plan under the Securities Act of 1933 on Form S-8
or any successor form) with the Securities and Exchange
Commission, at the Company's cost and expense, and to
maintain such registration as long as necessary.
9. Optionee Representations. The Optionee hereby
represents and warrants to the Company that:
(i) Optionee is acquiring the Option and will
acquire the Option Shares for Optionee's own account and
not with a view towards the distribution thereof;
(ii) Optionee has received a copy of the
Company's reports and documents required to be filed by
the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 within
the last twelve (12) months and all reports issued by the
Company to its stockholders;
(iii) Optionee must bear the economic risk of
the investment in the Option Shares, which cannot be sold
by Optionee unless they are registered under the Act or
an exemption therefrom is available thereunder;
(iv) in Optionee's position with the Company,
Optionee has had both the opportunity to ask questions of
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 grant of the
options 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; and
(v) Optionee 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 Act or an exemption therefrom
as provided herein.
10. Miscellaneous.
10.1 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, return receipt requested, postage prepaid 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.
10.2 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.
10.3 Entire Agreement. This Agreement
constitutes the entire agreement between the parties with
respect to the subject matter hereof. The Agreement may not
be amended except by a writing executed by the Optionee and
the Company.
10.4 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.
10.5 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Delaware.
10.6 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 of
interpretation of any of the terms or provisions of this
Agreement.
10.7 Amendments to Plan; Conflicts. No
amendment or modification of the Plan shall be construed as to
terminate the Option granted under this Agreement. 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.
IN WITNESS WHEREOF, the parties hereto have signed
this Agreement as of the day and year first above written.
ACORN VENTURE CAPITAL
CORPORATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
OPTIONEE:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
__________________________
DATE
Acorn Venture Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with the Stock Option Agreement dated as of
November 24, 1995 between myself and Acorn Venture Capital
Corporation ("Acorn"), I wish to purchase _______ shares of
Acorn stock which are being purchased for investment and not
for resale. I understand that if I should transfer ownership
of these shares within one year from the above date or within
two years from the Date of Grant, I must promptly notify you
in writing.
As payment for my shares, enclosed is a check payable to the
order of Acorn Venture Capital Corporation in the sum of
$_______.
Kindly forward to me my certificate at your earliest
convenience.
Very truly yours,
__________________________________
(Signature)
__________________________________
(Print Name)
__________________________________
(Address)
__________________________________
(Address)
__________________________________
(Social Security Number)