STOCK OPTION AGREEMENT
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AGREEMENT made the 24th day of October 1997, between Disc Graphics, Inc., a
Delaware corporation, (hereinafter called the "Company") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
residing at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
called the "Optionee").
W I T N E S S E T H:
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Whereas, the Company, ▇▇▇▇▇▇ Press Inc. ("▇▇▇▇▇▇") and the Stockholders of
▇▇▇▇▇▇ entered into an Asset Purchase Agreement dated as of September 19, 1997,
pursuant to which the Company will acquire substantially all of the assets and
certain of the liabilities of ▇▇▇▇▇▇ (the "Acquisition"); and
Whereas, in connection with the Acquisition, the Optionee and the Company
have agreed that, upon the Closing of the Acquisition, the Optionee is to become
an employee of the Company; and
Whereas, the Board of Directors of the Company has determined that, in
connection with such employment, Optionee is eligible for, and should be
granted, upon the Closing of the Acquisition as hereinafter provided, an option
as hereinbelow provided, and Optionee desires to have such option;
Now, Therefore, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Grant and Exercise of Option. The Company hereby grants to Optionee an
option to purchase a total of 50,000 shares of the authorized and unissued
Common Stock of the Company, having a par value of $.01 per share, at the price
of $4.7625 per share, upon and subject to the following terms and conditions:
(a) The within option may be exercised on or before October 23, 2002
(the "Expiration Date"). The option may not be exercised until the expiration of
six (6) months from the date hereof (the "Effective Date") of this Agreement,
whereupon this option may be exercised in full. It is expressly understood and
agreed that in the event the within option is not exercised on or before the
Expiration Date, as to any part or all of the shares which may be purchased
under the option, the right to purchase such shares shall completely lapse;
(b) Each exercise of the within option shall be by delivery to the
Company, at its then principal office (attention of the Secretary) of written
notice stating the number of shares to be purchased, accompanied by payment in
full of the option price of such shares. The option price shall be payable in
United States dollars in cash or by certified check, bank draft, postal or
express money order; provided, however, that in lieu of payment in full in cash,
an optionee may, with the prior approval of the Board of Directors, exercise his
option by tendering to the Company shares of the Company's Common Stock owned by
him and having a fair market value (as determined by the Board of Directors in
its absolute discretion) equal to the cash exercise price (or the balance
thereof) applicable to his option.
(c) In the event of each exercise of the within option, the Company
shall deliver to the Optionee, personally or at the Optionee's designated
address, as soon as practicable, a certificate made out to the Optionee for the
number of shares being purchased.
2. Non-Transferability of Option. The option granted under this Agreement
shall not be transferred otherwise than by will or the laws of descent and
distribution and shall be exercisable during Optionee's lifetime only by the
Optionee. No option granted hereunder shall be subject to execution, attachment,
pledge, hypothecation, or other process.
3. Death of Optionee. Any option, the period of which has not expired,
shall terminate at the time of death of the Optionee, and no share of Common
Stock may thereafter be delivered pursuant to such option, except that upon the
death of the Optionee, the person or persons to whom such Optionee's rights
under the option are transferred by will or the laws of descent and distribution
may, within six (6) months after the date of such Optionee's death, but in no
event after the Expiration Date, purchase all or any part of the shares with
respect to which the option was exercisable on the date of termination of
employment or service in accordance herewith.
4. Dilution and Other Adjustments. In the event that there is any change in
the stock subject to the within option through merger, consolidation or
reorganization, or in the event of any dividend in stock of the same class to
holders of issued and outstanding stock of the same class, or the issuance to
the holders of such stock of rights to subscribe to stock of the same class, or
in the event of any split, combination or exchange of stock or other change in
the capital structure of the Company, the Board of Directors of the Company
shall make such adjustments in the within option as it may deem equitable to
prevent dilution or enlargement of the rights granted to the optionee hereunder,
and such adjustments, when so made, shall be conclusive and binding on the
parties to this Agreement; and provided, further, that nothing herein shall be
construed as limiting or preventing the Company from exercising any right or
power to make or enter into adjustments, reclassifications, reorganizations, or
changes in its capital or business structure or to merge, consolidate or
dissolve or to sell or transfer all or any part of its business or assets.
5. Requirements of Law.
(a) If any law, regulation of the Securities and Exchange Commission,
or any regulation of any other commission or agency having jurisdiction shall
require the Company or the Optionee to take any action with respect to the
shares of stock to be acquired upon the exercise of the within option, then the
date upon which the Company shall deliver or cause to be delivered the
certificate or certificates for the shares of stock shall be postponed until
full compliance has been made with all such requirements of law or regulation.
(b) Neither the Optionee nor any person or persons referred to in
Paragraph 3 above, as the case may be, shall be, or shall be deemed to be, a
holder of any shares subject to the within option unless and until certificates
for such shares are delivered to him or them in accordance with this Agreement,
and no certificates may be delivered until the shares represented thereby are
paid in full.
6. Purchase for Investment. The Optionee represents, on behalf of himself
and the person or persons referred to in Paragraph 3 above, that any shares of
the Company purchased pursuant to this Agreement will be acquired in good faith
for investment and not for resale or distribution, and Optionee on behalf of
himself and said person or persons, agrees that each notice of the exercise of
the within option shall contain or be accompanied by a representation in writing
signed by him or said person or persons, as the case may be, in form
satisfactory to the Company, that the shares of the Company to be purchased
pursuant to such notice are being so acquired and will not be sold except in
compliance with applicable securities laws. The requirements of this Paragraph 6
may be waived by the Company if the Company shall have received an opinion of
its counsel that such representation is not required.
7. Acknowledgment. Optionee represents that he has read and understands the
terms and conditions of this Agreement and agrees to be bound thereby.
In Witness Whereof, the parties hereto have duly executed this Agreement as
of the day and year first above written.
DISC GRAPHICS, INC.
By: ____________________________
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Optionee
