EXHIBIT 10.16
PRE-PAID LEGAL SERVICES, INC.
STOCK OPTION AGREEMENT
(Xxxxx X. Xxxxxx - Third Quarter 1998 Recruiting Goals)
This Stock Option Agreement ("Agreement") is made effective as of the
2nd day of July, 1998 between Pre-Paid Legal Services, Inc., an Oklahoma
corporation (the "Corporation"), and Xxxxx X. Xxxxxx, (the "Holder").
In consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, the parties hereto agree as follows:
1. Grant of Stock Option. The Corporation hereby grants to Holder the
right and option (the "Option") to purchase an aggregate of Ten Thousand
(10,000) shares of Common Stock, par value $.01 per share, of the Corporation on
the terms and conditions herein set forth.
2. Purchase Price. The purchase price of the shares of Common Stock
subject to the Option shall be $25.50 per share (the closing market price of the
Common Stock on the date the specified recruiting goals are achieved).
3. Vesting of Option. The Option shall vest, if at all, as of the date
upon which the Corporation determines that the criteria set forth in Exhibit "A"
attached hereto have been satisfied and shall thereafter be exercisable and may
be exercised in all or in part from time to time during the term of the Option.
In no event shall the Option vest or become exercisable if such criteria are not
satisfied within the applicable time period.
4. Expiration Date. The Option shall expire and any rights of the
Holder to exercise the Option shall cease on the date three (3) years after the
date of this Agreement.
5. Non-transferability. The Option shall not be assignable or
transferable by the Holder, except by will or by the laws of descent and
distribution. During the life of the Holder, the Option shall be exercisable
only by him.
6. Changes in Capital Structure. The aggregate number of shares of
Common Stock covered by the Option, and the price per share thereof, shall all
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Corporation resulting from a subdivision or
consolidation of shares or other capital adjustment or the payment of a stock
dividend or other increase or decrease in such shares, in each case effected
without receipt of consideration by the Corporation; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated.
7. Exercise of Option. Subject to the terms and conditions of this
Agreement, the Option or any portion thereof may be exercised, to the extent
then exercisable, by written notice to the Corporation, Pre-Paid Legal Services,
Inc., 000 Xxxx Xxxx Xxxxxx, Xxxx Xxxxxx Xxx 000, Xxx, Xxxxxxxx 00000, attention
of the Secretary. Any such notice shall state the election to exercise the
Option and the number of shares in respect of which it is being exercised, shall
be signed by Holder or other permitted person exercising the Option, and shall
be accompanied by payment in full of the applicable purchase price by certified
or by cashier's check payable to the Corporation; or, unless otherwise
determined by the Board of Directors, the purchase price may be paid in
property, including shares of common stock of the Corporation (provided such
shares have been owned by the Holder for at least six months). As soon as
practicable after the date of exercise and receipt of the purchase price, a
certificate or certificates for the shares as to which the options shall have
been so exercised, registered in the name of Holder, shall be issued by the
Corporation. All shares issued as provided herein will be fully paid and
nonassessable.
8. Compliance with Laws. Notwithstanding any provision hereof, the
obligation of Corporation to sell and deliver shares pursuant to this Agreement
shall be subject to all applicable laws, rules and regulations and to such
approvals by governmental agencies or national securities exchanges as may be
required. Holder shall not exercise any portion of the Option and the
Corporation shall not be obligated to issue any shares under the Option if the
exercise thereof or the issuance of the shares thereunder shall constitute a
violation by Holder or the Corporation of any applicable law or regulation. The
Corporation may require as a condition to the issuance of any shares of Common
Stock upon exercise of an option that Holder remit an amount sufficient, in the
Corporation's opinion, to satisfy applicable FICA, federal, state or other
withholding tax requirements, if any, related to the exercise of the Option.
9. Rights as a Shareholder. Holder shall have no rights as a
shareholder with respect to any shares covered by the Option until the date of
issuance of a stock certificate to him for any such shares.
10. Governing Law. This Agreement shall be subject to, and governed by,
the laws of the State of Oklahoma irrespective of the fact that one or more of
the parties now is, or may become, a resident of a different state.
11. Counterpart Execution. This Agreement may be executed in multiple
counterparts and shall constitute one agreement when each party has executed a
counterpart.
Executed as of the day and year first above written.
"CORPORATION"
PRE-PAID LEGAL SERVICES, INC.,
an Oklahoma corporation
By: /s/ XXXXX XXXX
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Name: Xxxxx Xxxx
Title: Chief Financial Officer
and Chief Operating Officer
"HOLDER"
By: /s/ XXXXX X. XXXXXX
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