Exhibit 3.26
THIS OPTION HAS BEEN ISSUED PURSUANT TO EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND THE
QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS (THE "LAWS"). IT
IS UNLAWFUL TO EXERCISE, SELL, PLEDGE OR OTHERWISE DISPOSE OF THIS OPTION, OR
ANY INTEREST THEREIN, OR RECEIVE ANY CONSIDERATION THEREFOR, IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND QUALIFICATION UNDER THE
LAWS, UNLESS EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION REQUIREMENTS
ARE AVAILABLE.
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THIS STOCK
OPTION AGREEMENT.
FOOD EXTRUSION, INC.
DIRECTORS STOCK OPTION AGREEMENT
Food Extrusion, Inc., a Nevada corporation (the "Company"), hereby
grants to Xxxxx X. Xxxxx (the "Optionee"), an option (the "Option") to purchase
up to 50,000 shares ("Shares") of Common Stock, par value $.001, of the Company
(the "Common Stock") at an exercise price (the "Exercise Price") equal to $1.00
per share, which is equal to the fair market value of the Company's Common Stock
on the date of grant, in all respects subject to the terms, definitions and
provisions of this Directors Stock Option Agreement (the "Agreement").
1. Nature of the Option. The Option is intended to be a nonstatutory
option and not an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
2. Payment of Exercise Price.
(a) Method of Payment. Payment of the Exercise Price for
shares purchased upon exercise of the Option shall be made (i) by delivery to
the Company of cash or a check to the order of the Company in an amount equal to
the purchase price of such shares; (ii) subject to the consent of the Company,
by delivery to the Company of shares of Common Stock of the Company then owned
by the Optionee having a fair market value equal in amount to the purchase price
of such shares in accordance with Section 2(b); (iii) by any other means
approved by the Board of Directors and which is consistent with applicable laws
and regulations (including, without limitation, the provisions of Rule 16b-3
under the securities Exchange Act of 1934 and Regulation T promulgated by the
Federal Reserve Board); or (iv) by any combination of such methods of payment.
(b) Method of Payment-Public Market. In the event there exists
a public market for the Company's Common Stock on the date of exercise, payment
of the exercise price may be made by surrender of shares of the Company's Common
Stock. In this case payment shall be made as follows:
(i) Optionee shall deliver to the Secretary of the
Company a written notice which shall set forth the portion of the purchase price
the Optionee wishes to pay with Common Stock, and the number of shares of such
Common Stock the Optionee intends to surrender pursuant to the exercise of this
Option, which shall be determined by dividing the aforementioned portion of the
purchase price by the average of the last reported bid and asked prices per
share of Common Stock of the Company, as reported in The Wall Street Journal
(or, if not so reported, as otherwise reported by the National Association of
Securities Dealers Automated Quotation NASDAQ) System or, in the event the
Common Stock is listed on a national securities exchange, or on the NASDAQ
National Market System, NASDAQ Small-Cap Market or any successor national market
system, the closing price of Common Stock of the Company on such exchange as
reported in The Wall Street Journal), for the day on which the notice of
exercise is sent or delivered;
(ii) Fractional shares shall be disregarded and the
Optionee shall pay in cash an amount equal to such fraction multiplied by the
price determined under subparagraph (i) above;
(iii) The written notice shall be accompanied by a
duly endorsed blank stock power with respect to the number of Shares set forth
in the notice, and the certificate(s) representing said Shares shall be
delivered to the Company at its principal offices within three (3) working days
from the date of the notice of exercise;
(iv) The Optionee hereby authorizes and directs the
Secretary of the Company to transfer so many of the Shares represented by such
certificate(s) as are necessary to pay the purchase price in accordance with the
provisions herein;
(v) If any such transfer of Shares requires the
consent of the California Commissioner of Corporations or of some other agency
under the securities laws of any other state, or any opinion of counsel for the
Company or Optionee that such transfer may be effected under applicable Federal
and state securities laws, the time periods specified herein shall be extended
for such periods as the necessary request for consent to transfer is pending
before said Commissioner or other agency, or until counsel renders such an
opinion, as the case may be. All parties agree to cooperate in making such
request for transfer, or in obtaining such opinion of counsel, and no transfer
shall be effected without such consent or opinion if required by law; and
(vi) Notwithstanding any other provision herein, the
Optionee shall only be permitted to pay the purchase price with shares of the
Company's Common Stock owned by him as of the exercise date in the manner and
within the time periods allowed under Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 as such regulation is presently constituted, as
it is amended from time to time, and as it is interpreted now or hereafter by
the Securities and Exchange Commission and any such shares shall have been held
by the Optionee for not less than six (6) months.
3. Exercise of Option. The Option shall vest and become exercisable
during its term subject to the provisions of section 4 below, as follows:
(a) Vesting and Right to Exercise.
(i) The Option hereby granted shall vest and become
exercisable in its entirety on the Grant Date.
(ii) In the event of the Optionee's death, disability
or other termination of employment prior to exercise, the exercisability of the
Option shall be governed by Section 4, below.
(iii) The Option may be exercised in whole or in part
but may not be exercised as to fractional shares.
(b) Method of Exercise. In order to exercise any portion of
the Option, the Optionee shall execute and deliver to the Chief Financial
Officer of the Company, the Notice of Exercise of Stock Option in the form
attached hereto as Exhibit A, together with the Consent of Spouse. The Notice of
Exercise must be accompanied by payment in full of the aggregate purchase price
for the Shares to be purchased in the type of consideration set forth in Section
2. The Notice of Exercise may be delivered to the Company at any time. The
certificate(s) for the Shares as to which the Option has been exercised shall be
registered in the name of Optionee or his designee.
(c) Restrictions on Exercise. The Option may not be exercised
if the issuance of the Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
Federal or state securities law or any other law or regulation. As a condition
to the exercise of the Option, the Company may require the Optionee to make any
representation or warranty to the Company at the time of exercise of the Option
as in the opinion of legal counsel for the Company may be required by any
applicable law or regulation, including the execution and delivery of an
appropriate representation statement. The stock certificate(s) for the Shares
issued upon exercise of the Option may bear appropriate legends restricting
transfer.
(d) Delivery of Certificates. The Company shall deliver the
certificate(s) for the Shares issued upon exercise of the Option to the Director
as soon as is practicable; provided, however, that if any law or regulation
requires the Company to take any action with respect to such shares before the
issuance thereof, including, without limitation, actions taken pursuant to
Section 5 below, then the date of delivery of such Shares shall be executed for
a period necessary to take such notice.
4. Term of the Option. Except as otherwise provided in this Agreement,
to the extent not previously exercised, the right to exercise the Option shall
terminate on the tenth (10th) anniversary of the Date of Grant. Notwithstanding
the foregoing, if an Optionee ceases to be an employee of the Company for any
reason, except death and disability; he or she may, but only within ninety (90)
days after the date he or she ceases to be an employee of the Company, exercise
his or her Option to the extent that he or she was entitled to exercise it at
the date of such termination, and in the case of the Optionee's death or
disability, the Optionee (or the Administrator or Executor or other
Representative of the Employee's Estate) may, but only within one (1) year,
after the date he or she ceases to be an employee of the Company due to death or
disability, exercise his or her Option to the extent that he or she was entitled
to exercise it at the date of such termination; provided, however that in no
event may the Option be exercised after its ten (10) year term has expired. To
the extent that the Optionee was not entitled to exercise an Option at the date
of such termination, or if he or she does not exercise such Option (which he or
she was entitled to exercise) within the time specified herein, the Option shall
terminate.
5. Adjustments Upon Changes in Capitalization; Other Adjustments.
Subject to any required action by the shareholders of the Company, the number of
Shares and the Exercise Price shall be proportionately adjusted for any increase
or decrease in the number of issued shares of common stock resulting from a
stock split, reverse stock split, combination, reclassification, the payment of
a stock dividend on the common stock or any other increase or decrease in the
number of shares of Common Stock of the Company effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of Shares subject to, or the Exercise Price of, this Option.
The Board may, if it so determines in the exercise of its sole
discretion also make provision for adjusting the number of Shares, as well as
the Exercise Price, in the event that the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other increases or
reductions of shares of its outstanding common stock, and in the event of the
Company being consolidated with or merged into any other corporation; provided,
however, that in no event shall the Optionee be adversely affected by such
adjustment.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for changing, modifying, amending or adjusting
any of the terms of this Option solely in order for the Company to perfect a
significant financing.
6. Rights of Shareholder. Optionee shall have no rights as a
shareholder with respect to the Shares until the date of the issuance or the
transfer to the Optionee of the certificate(s) for such Shares and only after
the Exercise Price for such Shares has been paid in full.
7. Amendment. Except as set forth in Section 5, this Agreement may not
be amended without the written consent of the Optionee.
8. Income Tax Withholding. The Optionee authorizes the Company to
withhold, in accordance with applicable law from any compensation payable to him
or her, any taxes required to be withheld be Federal, state or local laws as a
result of the exercise of this Option. Furthermore, in the event of any
determination that the Company has failed to withhold a sum sufficient to pay
all withholding taxes due in connection with the exercise of this Option, the
Optionee agrees to pay the Company the amount of such deficiency in cash within
(5) days after receiving a written demand from the Company to do so, whether or
not Optionee is an employee or director of the Company at that time.
9. Investment Representations; Legends.
(a) Representations. The Optionee represents, warrants and
covenants that:
(i) Any shares purchased upon exercise of this Option
shall be acquired for the Optionee's account for investment only, and not with a
view to, or for sale in connection with, any distribution of the shares in
violation of the Securities Act of 1933 ( the "Securities Act"), or any rule or
regulation under the Securities Act.
(ii) The Optionee has had such opportunity as he or
she has deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Optionee to evaluate the merits and
risks of his or her investment in the Company.
(iii) The Optionee is able to bear the economic xxxx
of holding such shares acquired pursuant to the exercise of this option for an
indefinite period.
(iv) The Optionee understands that the Shares
acquired pursuant to the exercise of this option are not registered under the
Securities Act and are "restricted securities" within the meaning of Rule 144
under the Securities Act and may not be transferred, sold or otherwise disposed
of in the absence of an effective registration statement with respect to the
Shares filed and made effective under the Securities Act of 1933, or an opinion
of counsel satisfactory to the Company to the effect that registration under
such Act is not required.
By making payment upon exercise of this option, the Optionee shall be deemed to
have reaffirmed, as of the date of such payment, the representations made in
this Section 9.
(b) Legends of Stock Certificate. All stock certificates
representing shares of Common Stock issued to the Optionee upon exercise of this
opinion shall have affixed thereto legend(s) substantially in the following
forms, in addition to any other legends required by applicable state law:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF ANY EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES EVIDENCED BY THIS
CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER SUCH ACT IS NOT REQUIRED."
DATE OF GRANT: July 9, 1997
FOOD EXTRUSION INCORPORATED
By: /s/Xxxxxx X. XxXxxx
Xxxxxx X. XxXxxx, Chairman of the Board
[corporate seal]
By: /s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, Vice President &
Chief Financial Officer
The Optionee acknowledges receipt of the Directors Stock Option
Agreement attached hereto and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts the Option subject to all of
the terms and provisions thereof. The Options hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board of
Directors of Food Extrusion, Inc. upon any questions arising under such
Agreement.
Dated: October 30, 1997
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OPTIONEE:
/s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
CONSENT OF SPOUSE
I, Xxx Xxxxx , spouse of the Optionee who executed the Directors Stock
Option Agreement attached hereto, hereby agree that my spouse's interest in the
shares of Common Stock of Food Extrusion, Inc. subject to said Agreement shall
be irrevocably bound by the Agreement's terms. I agree to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
of Food Extrusions, Incorporated upon any questions arising under such
Agreement. I further agree that my community property interest in such Shares,
if any, shall similarly be bound by said Agreement and that such consent is
binding upon my executors, administrators, heirs and assigns. I agree to execute
and deliver such documents as may be necessary to carry out the intent of said
Agreement and this consent.
Dated: October 30, 1997
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/s/Xxx Xxxxx
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Signature
Xxx Xxxxx
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Print Name
EXHIBIT A
TO: Food Extrusion, Inc.
0000 Xxxx'x Xxxxxx Xxxxx
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000
SUBJECT: NOTICE OF EXERCISE OF STOCK OPTION
With respect to the stock option granted to the undersigned by
Food Extrusion, Inc. (the "Company") on , 1997, to purchase an aggregate of
shares of the Company's Common Stock, this is official notice that the
undersigned hereby elects to exercise such option to purchase shares as follows:
NUMBER OF SHARES:
DATE OF PURCHASE:
MODE OF PAYMENT:
(Certified check or cash)
The shares should be issued as follows:
NAME:
ADDRESS:
Signed:
Dated:
Please send this notice of exercise to:
Food Extrusion, Inc.
0000 Xxxx'x Xxxxxx Xxxxx
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000