Exhibit 1 OPTION AGREEMENT
THIS OPTION AGREEMENT ("Option Agreement") is entered into this 29th
day of December, 1997, between XXXXXX X. XXXXXXX ("Grantee"), and XxXXX X.
XXXXXXX ("Shareholder").
Shareholder has sold to Grantee certain shares of the Common Stock
of Xxxxxxx, Xxxxxx and Company, a Michigan corporation ("Company"). After
the sale and purchase of such shares, Shareholder owns in excess of 100,000
shares of Common Stock of the Company. Shareholder wishes to grant to
Grantee an irrevocable option to purchase 100,000 of Shareholder's remaining
shares of Common Stock of the Company.
In consideration of the premises, and the sum of $10 paid by Grantee
to Shareholder (receipt and adequacy of which is acknowledged by
Shareholder), and the mutual promises, covenants and undertakings
hereinafter set forth, the parties agree as follows:
1. Option. Shareholder hereby grants to Grantee an irrevocable option
("Option") to purchase 100,000 shares of Common Stock of the Company owned
by Shareholder (the "Optioned Stock") on the terms hereinafter set forth.
2. Purchase Price. The purchase price for the Optioned Stock, in the
event of exercise of the Option by Grantee, shall be the Fair Value (as
hereinafter defined) of each share of Optioned Stock, provided that the
purchase price shall not be less than $7.50 per share nor more than $12.00
per share. For purposes of this agreement, Fair Value is defined as the
average closing price of a share of Common Stock of the Company during the
twenty (20) trading days prior to the date of exercise of the option during
which the Company's Common Stock has actually traded on the American Stock
Exchange, if listed on the American Stock Exchange (or actually traded on
any other stock exchange or on the Nasdaq Stock Market if listed on an
exchange other than the American Stock Exchange or listed on the Nasdaq
Stock Market).
3. Term. The term of this Option Agreement (i.e., the period during
which the Option must be exercised, if at all) shall be for a period ending
at 6:00 p.m. on June 30, 1999. If the Option is not exercised during the
term of this Option Agreement, the Option Agreement shall be deemed
terminated and the Option shall thereupon be deemed to have expired.
4. Exercise of Option. The Option may be exercised by Grantee at any
time after June 30, 1998 and prior to 6:00 p.m. on June 30, 1999, but only
on one occasion and only with respect to all of the Optioned Stock. In
addition, if there shall occur a "Change in Control Event" prior to June 30,
1998, the Option may be exercised by Grantee at any time after such an
event, but only on one occasion and only with respect to all of the
Optioned Stock. The exercise of all or any part of the Option shall be by
written notice by Grantee to Shareholder exercising the Option as to the
Optioned Stock. As used herein, a "Change of Control Event" shall mean
either of the following events:
(a) the Board of Directors of the Company shall have
approved a merger or consolidation of the Company, a sale of all or
substantially all of the Company's assets or a tender offer by
another Person (as defined by Section 13(d)(3)(e) of the Securities
Exchange Act of 1934, as amended) for more than 50% of the Company's
outstanding common stock; or
(b) a Person, other than the Grantee or a Person who is
a shareholder of the Company on the date hereof owning more than 10%
of the Company's outstanding common stock, or an Affiliate of either
the Grantee or such Person, acquires beneficial ownership (as such
term is defined in Rule 13d-3 as promulgated under the 0000 Xxx) of
twenty percent (20%) or more of the then outstanding common stock of
the Company or securities representing, or the right or option to
acquire beneficial ownership of, or to vote securities representing,
ten percent (10%) or more of the then outstanding common stock, and
after the occurrence of such acquisition the Board of Directors of
the Company (A) recommends such acquisition to its shareholders for
acceptance or (B) fails to undertake such acts as Grantee reasonably
requests to oppose such acquisition.
5. Closing. Delivery of the certificates and stock powers representing
shares of the Optioned Stock in the form required hereunder by Grantee shall
take place at the offices of Grantee within sixty (60) days (as determined
by Grantee) after delivery of Grantee of such written notice of exercise of
the Option. The date upon which the delivery of the certificates for the
Optioned Stock and payment therefor shall take place shall be referred to
herein as the closing date and such transaction shall be referred to as
Closing. At the Closing on a closing date, Grantee shall deliver to
Shareholder payment of the purchase price for the Optioned Stock to be
assigned and transferred to Grantee by cashier's check or other immediately
available funds.
6. Representations and Warranties. Shareholder represents and warrants
the following to Grantee, which representations and warranties are true on
the date of this Option Agreement and shall continue to remain true and
correct as of a closing date (and shall survive the Closing):
(a) Shareholder is the sole beneficial owner of the Optioned
Stock and has good and marketable title to the Optioned Stock, free
and clear of any pledges, security interests, liens, claims or any
other encumbrances and has the sole right and authority to enter
into this Option Agreement and to sell and transfer the Optioned
Stock to Grantee.
(b) At any Closing, Grantee shall receive good and marketable
title to all of the Optioned Stock covered by the exercise of the
Option, free and clear of any pledges, security interests, liens,
claims or any other encumbrances.
7. Legend. Shareholder shall cause the following legend to appear on
the stock certificates representing the Optioned Stock:
"100,000 of the shares of stock represented by this
certificate are subject to an irrevocable option granted by
the Shareholder, _____________________, to [Name of
Grantee], under an Option Agreement dated December 29, 1997
(the "Option Agreement"). The shares of stock represented
by this certificate may not be sold, transferred, disposed
of, hypothecated, pledged or otherwise encumbered in any
manner whatsoever except pursuant to the Option Agreement.
A copy of the Option Agreement is available for examination
at the principal business office of the Company."
If the Optioned Stock is not evidenced by a certificate in paper form, the
Grantee may provide written notice to the foregoing effect to the person in
whose name the Optioned Stock is registered and to the Company's transfer
agent.
8. Assignment. Grantee may not assign this Option Agreement or his
rights and obligations hereunder to any other party without obtaining the
prior written consent of Shareholder. In the event that Grantee shall
assign this Option Agreement and its rights and obligations hereunder to
such party with the Shareholder's consent, then such party shall succeed to
this Option Agreement and all of the rights and obligations of Grantee
hereunder and shall be deemed the party to this Option Agreement in the
place and stead of Grantee, and Grantee shall thereupon be relieved of any
and all personal liability or obligations under this Option Agreement.
9. Binding Effect. This Option Agreement shall be binding upon the
parties and their respective heirs, personal representatives, guardians,
conservators, other legal representatives, successors and assigns.
10. Entire Agreement. This Option Agreement supersedes all prior
understandings or agreements between the parties relating to this subject
matter. There are no other understandings or agreements between the parties
concerning this subject matter. This Option Agreement may not be modified
unless by a writing signed by both parties. No party may rely upon any oral
statements or representations heretofore made pertaining to the subject
matter of this Option Agreement.
11. Non-waiver. No delay or failure to exercise any rights under this
Option Agreement by any party shall constitute a waiver of such right or any
other right.
12. Governing Law. This Option Agreement shall be construed in
accordance with the laws of the State of Michigan.
13. Counterparts. This Option Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
The parties have signed this Option Agreement effective as of the
date first above written.
/S/ XxXXX X. XXXXXXX
XxXxx X. Xxxxxxx
/S/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
