1 EXHIBIT 4.13
STOCK OPTION AGREEMENT
EFFECTIVE DATE: August 19, 1996
PLACE: Tempe, Arizona
PARTIES: RECONDITIONED SYSTEMS, INC., an Arizona corporation
(the "Company"), and Xxxxx X. Xxxxxxxxx ("Optionee")
RECITALS:
The Company desires to issue to Optionee options to acquire up to
83,334 shares of the Company's no par value common stock ("Common Stock").
Capitalized terms not otherwise defined herein shall have the same meaning
as ascribed to them in the Employment Agreement between the Company and
Optionee dated August 10, 1995.
AGREEMENTS:
In consideration of the mutual promises herein contained, the
parties agree as follows:
1. Grant of Option. Subject to the approval of Norwest
Business Credit, Inc., a Minnesota corporation ("Norwest"), pursuant to
that certain Credit and Security Agreement dated as of February 26, 1996
between the Company and Norwest, the Company hereby irrevocably grants to
Optionee the right and option (the "Option") to purchase all or any part of
an aggregate of up to eighty-three thousand three hundred thirty four
(83,334) shares of Common Stock (the "Shares") on the terms and conditions
set forth herein.
2. Purchase Price. The purchase price of the Shares acquired
pursuant to the exercise of an Option shall be One Dollar ($1.00) per
Share, which equals the fair market value of the Shares on the effective
date of this grant. The purchase price shall be paid in the manner set
forth in Paragraph 11.
3. Vesting. Optionee's right to acquire Shares pursuant to the
exercise of the Option as provided herein shall be fully vested as of the
date hereof; provided, however, that Optionee hereby agrees not to sell,
assign, transfer, pledge, hypothecate or otherwise dispose of any Shares
acquired upon exercise of this Option for a period of twelve (12) months
following the Effective Date of this Option.
4. Term of Option. Subject to early termination of the Option
as provided in Paragraphs 7, 8, and 9 hereof, the Option shall terminate as
the date ten (10) years after the date hereof.
5. Exercise of the Option. Subject to earlier termination of
the Option as provided in Paragraphs 7, 8 and 9 hereof, and to the lock-up
provisions contained in Paragraph 3 hereof, Optionee may exercise the
Option from time to time as to any part or all of the vested Shares covered
hereby.
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6. Nontransferability. The Option shall not be transferable
otherwise than by will or the laws of descent and distribution, and the
Option may be exercised, during the lifetime of Optionee, only by Optionee.
More particularly, but without limiting the generality of the foregoing,
and except as otherwise specified, the Option may not be sold, assigned,
transferred, pledged, hypothecated, or disposed of in any manner, shall not
be assignable by operation of law, and shall not be subject to execution,
attachment, or similar process. Any attempted sale, assignment, transfer,
pledge, hypothecation, or other disposition contrary to the provisions
hereof, and the levy of execution, attachment, or similar process upon the
Option, shall be null and void and without effect.
7. Termination of Employment; Effect on Employment. If the
employment of Optionee is terminated (otherwise than by reason of death),
the Option may be exercised at any time within three (3) months after the
date of such termination, but not more than ten (10) years from the date
hereof. To the extent the Option has not been exercised by such time, the
Option shall terminate. So long as Optionee shall continue to be an
employee of the Company or any parent or subsidiary of the Company, this
Option shall not be affected by any change of duties or position. Nothing
in this Agreement shall confer upon Optionee any right to continue in the
employ of the Company or any parent or subsidiary of the Company or
interfere in any way with the right of the Company or any parent or
subsidiary of the Company to terminate Optionee's employment at any time.
8. Death of Optionee. If Optionee dies while employed by the
Company or within three (3) months after the termination of his employment,
the Option may be exercised by the legal representative of his estate, or
by any person or persons who shall have acquired the Option directly from
Optionee by bequest or inheritance, at any time within one (1) year after
the date of his death, but not more than ten (10) years from the date
hereof. To the extent the Option has not been exercised by such time, the
Option shall terminate.
9. Dissolution or Liquidation of Company. In the event of the
proposed dissolution or liquidation of the Company, or in the event of a
proposed sale of substantially all of the assets of the Company, or in the
event of a merger or consolidation with another corporation in any manner
in which the Company is not the surviving corporation and the surviving
corporation does not agree to assume the Option granted hereunder, the
Option will terminate immediately before the consummation of such proposed
action, unless sooner terminated as of a date fixed by the Board of
Directors, in which even Optionee shall be given the right to exercise the
Option as to all or any part of the Shares subject to this Agreement.
10. Rights as Stockholder. Optionee shall not by reason of the
Option have any rights of a stockholder of the Company until Optionee
shall, from time to time, have exercised the Option, and, upon each such
exercise, Optionee shall have, with respect to the number of Shares as to
which the Option is then exercised, all rights of a stockholder of record
from the date of such exercise, irrespective of whether certificates to
evidence the Shares with respect to which the Option was exercised shall
have been issued on such date.
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11. Method of Exercising.
(a) Notice of Exercise/Payment of Purchase Price. Subject
to the terms and conditions of this Agreement, the Option may be exercised
by written notice to the Secretary of the Company, at the Company's main
office, or at such other address as the Company, by written notice to
Optionee, may designate from time to time. Such notice shall state the
election to exercise the Option and the number of Shares in respect of
which the Option is being exercised, and shall be signed by the person or
persons exercising the Option. Such notice shall be accompanied by payment
of the full purchase price of such Shares, by cashier's or certified check,
or by such other form of consideration, if any, as may be approved by the
Company's Board of Directors. In addition to the foregoing, the purchase
price for the Shares may be paid through a sale and remittance procedure by
which Optionee shall provide concurrent irrevocable written instructions
to: (i) a Company designated brokerage firm to effect the immediate sale
of the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the purchase
price for the Shares acquired pursuant to exercise of the Option, and (ii)
the Company to deliver the certificates for the purchased Shares directly
to such brokerage firm to complete the sale transaction.
(b) Stock Certificates. Upon the exercise of an Option,
the Company shall deliver a certificate or certificates representing any
Shares acquired hereunder as soon as practicable after the notice and
payment shall be received. Except if issued through the sale and
remittance procedure described in Paragraph 11(a), the certificate or
certificates for the Shares as to which the Option shall have been so
exercised shall be registered in the name of Optionee or in the name of any
other person or entity specified in writing by Optionee. If an Option
shall be exercised by the legal representative of Optionee's estate, or by
any person or persons who shall have acquired the Option directly from
Optionee as a result of Optionee's death, whether by bequest, inheritance,
or otherwise, such notice shall be accompanied by appropriate proof of the
right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of an Option as provided herein shall
be fully paid and nonassessable.
12. Reservation of Shares. The Company shall at all times
during the term of the Option reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of
this Agreement, shall pay all fees, expenses, and taxes necessarily
incurred by the Company in connection therewith, and shall, from time to
time, use its good faith efforts to comply with all laws, rules, and
regulations which, in the opinion of counsel for the Company, shall be
applicable thereto.
13. Registration of Shares. The Company shall register the
Shares issuable upon exercise of the Option with the Securities and
Exchange Commission (the "Commission") by filing a Registration Statement
on Form S-8 with the Commission.
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14. Adjustment for Recapitalization. In the event of any stock
dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Company or any merger,
consolidation, spin-off, split-off, split-up, reorganization, partial or
complete liquidation or other distribution of assets, issuance of warrants
or other rights to purchase securities or any other corporate transaction
or event having an effect similar to any of the foregoing, appropriate
adjustments shall be made by the Board of Directors of the Company to the
number and kind of Shares and the price per Share subject to this
Agreement.
15. Taxes. Optionee agrees, no later than the date as of which
the value of any Option or Shares acquired pursuant to this Agreement first
becomes includible in the gross income of Optionee for federal income tax
purposes, to pay to the Company, or make arrangements satisfactory to the
Company regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Option or such Shares.
The obligations of the Company under this Agreement shall be conditional on
such payment or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
of any kind otherwise due to Optionee.
16. Action Taken in Good Faith. No member of the Board of
Directors, nor any officer or employee of the Company acting on behalf of
the Board, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to this Agreement.
17. Miscellaneous.
(a) Waiver. The waiver of any provision of this Agreement
will not be effective unless in writing and executed by the party against
whom enforcement of the waiver is sought.
(b) Entire Agreement. This Agreement constitutes the
entire integrated agreement among the parties pertaining to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. This Agreement may not
be amended except by written instrument executed by the parties.
(c) Arbitration. Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Phoenix,
Arizona in accordance with the rules of the American Arbitration
Association then in effect. The decision of the arbitrators shall be final
and binding on the parties, and judgment may be entered on the arbitrators'
award in any court having jurisdiction. The costs and expenses of such
arbitration, including but not limited to attorneys' and other
professionals' fees, shall be borne in accordance with the determination of
the arbitrators.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona without
regard to its conflict of laws principles.
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(e) Severability. If any provision of this Agreement is
held to be unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall be severable and not affected thereby.
(f) Counterparts. This Agreement may be executed in one or
more counterparts each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(g) Delays or Omissions. No delay or omission to exercise
any right, power, or remedy accruing to any party hereunder or any breach
or default under this Agreement shall impair any such right, power, or
remedy, nor shall it be construed as a waiver of or acquiescence to any
such breach or default, or of or in any similar breach or default occurring
later; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default occurring before or after the waiver.
Any waiver, permit, consent, or approval of any kind of any breach or
default under this Agreement or of any provision or condition of this
Agreement must be in writing and shall be effective only to the extent
specifically stated in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party shall be cumulative.
(h) Headings. The headings in this Agreement have been
inserted for convenience only and shall not affect the meaning or
interpretation of any provision in this Agreement.
(i) Assignment. The rights and obligations of the Company
and Optionee hereunder shall inure to the benefit of and shall be binding
on their successors and assigns.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement effective as of the day and year first above written.
COMPANY: OPTIONEE:
RECONDITIONED SYSTEMS, INC.,
an Arizona corporation
By /s/ Xxxxx X. Xxxx /s/ Xxxxx X. Xxxxxxxxx
_____________________________ ________________________
Xxxxx X. Xxxx, Xxxxx X. Xxxxxxxxx
Chairman
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