NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the _____day of ___________, ____, is by and
between SOUTHERN ELECTRONICS CORPORATION (the "Company") and
____________________________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, on ________________ (the "Grant Date"), the Board of Directors of
the Company granted a non-qualified stock option to purchase _____ shares of the
common stock, $.01 par value per share ("Common Stock"), of the Company to the
Optionee at an exercise price of $_____ per share;
WHEREAS, the Company and the Optionee wish to confirm the terms and
conditions of the option;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is hereby agreed between the parties hereto as follows:
1. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein, the Company hereby grants to the Optionee a
non-qualified stock option (the "Option") to purchase all or any part of _____
shares
of Common Stock of the Company.
2. Term and Exercise of Option. Subject to the provisions of this
Agreement:
(a) The Option shall be exercisable during the Option Period (as
defined in Section 4 hereof) only to the extent of the number of Vested
Shares determined pursuant to the vesting schedule attached hereto as
Schedule I.
(b) The Option may be exercised with respect to all or any portion
of the Vested Shares at any time during the Option Period by the delivery
to the Company, at its principal place of business, of (i) a written
notice of exercise in substantially the form attached hereto as Exhibit 1,
which shall be actually delivered to the Company no earlier than thirty
(30) days and no later than ten (10) days prior to the date upon which
Optionee desires to exercise all or any portion of the Option; (ii)
payment to the Company of the Exercise Price, as defined in Section 3
below, multiplied by the number of shares of Common Stock being
purchased (the "Purchase Price") in the manner provided in Subsection (c)
hereof; and (iii) a certified check representing payment of all
withholding tax obligations (whether federal, state or local), imposed by
reason of the exercise of the Option. Upon acceptance of such notice,
receipt of payment in full of the Purchase Price, and receipt of payment
of all withholding tax obligations, the Company shall cause to be issued
a certificate representing the shares of Common Stock so purchased.
(c) The Purchase Price shall be paid in full upon the exercise of
all or any portion of the Option and no shares of Common Stock shall be
issued or delivered until full payment therefor has been made. Payment of
the Purchase Price for all shares of Common Stock purchased pursuant to
the exercise of all or any portion of the Option shall be made in cash or,
alternatively, in combination with any or all of the following:
(i) by delivery to the Company of a number of shares of
Common Stock which have been owned by the Optionee for at least six
months prior to the date of the Option's exercise, having a fair
market value on the date of exercise, as determined by the Board of
Directors in its sole discretion, either equal to the Purchase Price
or, in combination with cash, equal to the Purchase Price;
(ii) by receipt of the Purchase Price in cash from a broker,
dealer or other "creditor" as defined by Regulation T issued by the
Board of Governors of the Federal Reserve System following delivery
by the Optionee to the Board of Directors of instructions in a form
acceptable to the Board of Directors regarding delivery to such
broker, dealer or other creditor of that number of shares of Common
Stock with respect to which the Option is exercised; or
(iii) by such other consideration as the Board of Directors,
in its sole discretion, allows.
3. Exercise Price. The exercise price for each share of Common Stock
for which the Option is exercised shall be $_____, subject to adjustment as set
forth in Section 7 hereof (the "Exercise Price").
4. Term and Termination of Option. Except as otherwise provided below,
the term of the Option (the "Option Period") shall commence on the Grant Date
and terminate on the date of the first to occur of the following events:
(a) the ten-year anniversary of the Grant Date;
(b) if the Optionee's service as a director of the Company
terminates because of his disability as defined in Code Section 72(m)(7),
the Optionee shall be vested in all of the Common Stock granted by this
Option, and may fully (100%) exercise this Option, less any portion
previously exercised, at any time, or from time to time, within twelve
months after termination of service;
(c) if the Optionee dies (1) while a director of the Company or
(2) within twelve months after termination of his service as a director of
the Company because of disability as defined in Code Section 72(m)(7),
this Option shall become fully vested and may be fully (100%) exercised
(less any portion previously exercised) by the person or persons to whom
the Optionee's rights under this Option pass by will or applicable law, or
if no such person has such right, by his executors or administrators, at
any time, or from time to time, until the first anniversary of the
Optionee's death; or
(d) the date the Optionee's service as a director of the Company
shall terminate for any reason other than by death or disability as
aforesaid.
Upon the expiration of the Option Period, this Option, and all unexercised
rights granted to Optionee hereunder shall terminate, and thereafter be null and
void.
5. Rights as Shareholder. Until the stock certificates reflecting the
Common Stock accruing to the Optionee upon exercise of the Option are issued to
the Optionee, the Optionee shall have no rights as a shareholder with respect to
such Common Stock. The Company shall make no adjustment for any dividends or
distributions or other rights on or with respect to shares of Common Stock
purchased pursuant to the exercise of all or any portion of the Option for which
the record date is prior to the issuance of that stock certificate, except as
this Agreement otherwise provides.
6. Restriction on Transfer of Option. The Option evidenced hereby is
nontransferable other than by will or the laws of descent and distribution, and,
shall be exercisable during the lifetime of the Optionee only by the Optionee
(or in the event of his disability, by his personal representative) and after
his death, only by his personal representative.
7. Change in Capitalization. If the number of shares of the Common
Stock of the Company shall be increased or reduced by a change in par value,
split-up, stock split, reverse stock split, reclassification, merger,
consolidation, distribution of stock dividends or similar capital adjustment, an
appropriate adjustment shall be made by the Board of Directors in the number and
kind of shares as to which the Option, or the portion thereof then unexercised,
shall be or become exercisable, to the end that the Optionee's proportionate
interest shall be maintained as before the occurrence of the event. The
adjustment shall be made without change in the total price applicable to the
unexercised portion of the Option and with a corresponding adjustment in the
Exercise Price. No fractional shares shall be issued or optioned in making the
adjustment. All adjustments made by the Board of Directors under this Section
shall be conclusive.
In the event of a Change of Control (as defined below), all of the Option
then outstanding and unexercised shall be exercisable immediately in full, and
shall remain exercisable for the remaining term of the Option, regardless of any
provisions with respect to the Option that limit the exercisability of the
Option for any length of time.
For purposes of the foregoing paragraph, the following terms shall have the
following meanings:
A "Change of Control" shall be deemed to have occurred if and when (1) any
individual, corporation, partnership, Group, association or other person or
entity, together with his, its or their Affiliates or Associates, other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, hereafter becomes the Beneficial Owner of securities of the Company
representing thirty percent (30%) or more of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the election
of directors; (2) the Continuing Directors of the Company shall at any time fail
to constitute a majority of the members of the Board of Directors of the
Company; (3) all or substantially all of the assets of the Company are sold,
conveyed, transferred or otherwise disposed of, whether through one event or a
series of related events, without being Duly Approved by the Continuing
Directors of the Company; (4) any individual, corporation, partnership, Group,
association or other person or entity, together with his, its or their
Affiliates or Associates, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Subsidiary, becomes the
Beneficial Owner of securities of the Subsidiary representing thirty percent
(30%) or more of the combined voting power of the Subsidiary's then outstanding
securities entitled to vote generally in the election of directors; or (5) all
or substantially all of the assets of the Subsidiary are sold, conveyed,
transferred or otherwise disposed of, whether through one event or a series of
related events, without being Duly Approved by the Continuing Directors of the
Subsidiary.
"Affiliate" or "Affiliated" means any person, firm, corporation,
partnership, association or entity, either directly or indirectly, that
controls, is controlled by, or is under common control with a specified person,
firm, corporation, partnership, association or entity.
"Associate" means (1) any corporation, partnership or other entity of which
a specified person is an officer or partner, or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of equity securities
thereof, (2) any trust or estate in which the specified person has a substantial
beneficial interest or as to which the specified person serves as trustee or in
a similar fiduciary capacity, (3) any relative or spouse of such specified
person, or any relative of such spouse, who has the same home as such specified
person, and (4) any person who is a trustee, officer or partner of such
specified person or of any corporation, partnership or other entity that is an
Affiliate of such specified person.
"Beneficial Owner" shall be defined by reference to Rule 13d-3 under the
Act as such Rule is in effect on the date hereof; provided, however, that any
individual, corporation, partnership, Group, association or other person or
entity which, directly or indirectly, owns or has the right to acquire any of
the Company's or the Subsidiary's outstanding securities entitled to vote
generally in the election of directors at any time in the future, whether such
right is contingent, absolute, direct or indirect, pursuant to any agreement,
arrangement or understanding or upon exercise of conversion rights, warrants or
options or otherwise, shall be deemed the Beneficial Owner of such securities.
"Continuing Director" means a director who either was a member of the Board
of Directors of either the Company or the Subsidiary, as the case may be, on the
date hereof, or who becomes a member of the Board of Directors of either the
Company or the Subsidiary, as the case may be, subsequent to such date and whose
election or nomination for election by the Board of Directors of that company
was Duly Approved by the Continuing Directors of that company at the time of
such election or nomination, either by a specific vote or by approval of the
proxy statement issued by that company on behalf of the Board of Directors of
that company in which such person is named as a nominee for director.
"Duly Approved by the Continuing Directors" means an action approved by the
vote of at least a majority of the Continuing Directors then on the Board of
Directors of either the Company or the Subsidiary, as the case may be; provided,
however, if the votes of such Continuing Directors in favor of such action would
be insufficient to constitute an act of the entire Board of Directors of that
company as if a vote by all of its members had been taken, or if the number of
persons constituting the Continuing Directors of that company shall be equal to
or less than three, then the term Duly Approved by the Continuing Directors
shall mean an action approved by the unanimous vote of the Continuing Directors
then on the Board of Directors of that company.
"Group" means persons who act in concert as described in Section 13(d)(3)
of the Act as in effect on the date hereof.
"Subsidiary" only for purposes of defining a Change of Control means
Southern Electronics Distributors, Inc.
8. Special Limitation on Exercise. Notwithstanding anything contained
herein to the contrary, no purported exercise of the Option shall be effective
without the written approval of the Board of Directors of the Company, which may
be withheld to the extent that its exercise, either individually or in the
aggregate together with the exercise of other previously exercised stock options
and/or offers and sales pursuant to any prior or contemplated offering of
securities, would, in the sole and absolute judgment of the Board of Directors
of the Company, require the filing of a registration statement with the United
States Securities and Exchange Commission, or with the securities commission of
any state. The Company shall avail itself of any exemptions from registration
contained in applicable federal and state securities laws which are reasonably
available to the Company on terms which, in the sole and absolute discretion of
the Board of Directors, it deems reasonable and not unduly burdensome or costly.
If the Option cannot be exercised at the time it would otherwise expire due to
the restrictions contained in this Section, the exercise period shall be
extended for successive one-year periods until it can be exercised in accordance
with this Section. The Optionee shall deliver to the Company, prior to the
exercise of the Option, such information, representations and warranties as the
Company may reasonably request in order for the Company to be able to satisfy
itself that the Common Stock to be acquired pursuant to the exercise of the
Option is being acquired in accordance with the terms of an applicable exemption
from the securities registration requirements of applicable federal and state
securities laws.
9. Legend on Stock Certificates. Certificates evidencing Common Stock
to be distributed pursuant to the Agreement shall, to the extent appropriate at
the time, have noted conspicuously on the certificates a legend substantially to
the following effect, which is intended to give all persons full notice of the
existence of the conditions, restrictions, rights and obligations set forth in
this Agreement:
(a) That the securities evidenced by the certificate were issued
without registration under the Securities Act of 1933, as amended (the
"1933 Act"), or under the applicable laws of any state or states
(collectively referred to as the "State Acts"), in reliance upon certain
exemptive provisions of the 1933 Act or any applicable State Acts;
(b) That the securities cannot be sold or transferred unless, in
the opinion of counsel reasonably acceptable to the Company, the sale or
transfer would be:
(1) Pursuant to an effective registration statement under
the 1933 Act or pursuant to an available exemption form
registration; and
(2) A transaction which is exempt under any applicable State
Acts or pursuant to an effective registration statement under or in
a transaction which is otherwise in compliance with the State Acts;
and
(c) That the securities evidenced by the certificate were issued
in accordance with the provisions of the Agreement and are subject to the
provisions thereof and may not be sold or transferred except in compliance
with said provisions.
10. Governing Laws. This Agreement shall be construed, administered and
enforced according to the laws of the State of Delaware; provided, however, no
option may be exercised except, in the reasonable judgment of the Board of
Directors, in compliance with exemptions under applicable state securities laws
of the state in which the Optionee resides, and/or any other applicable
securities laws.
11. Successors. This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors and permitted assigns of
the parties.
12. Notice. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given if personally delivered or if sent by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
13. Severability. In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
14. Entire Agreement. This Agreement expresses the entire understanding
and agreement of the parties. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
15. Violation. Any transfer, pledge, sale, assignment, or hypothecation
of the Option or any portion thereof shall be a violation of the terms of this
Agreement and shall be void and without effect.
16. Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
17. Specific Performance. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on
the day and year first set forth above.
SOUTHERN ELECTRONICS CORPORATION
By:
Title:
ATTEST:
_________________________
Title: __________________
[CORPORATE SEAL]
OPTIONEE
(SEAL)
EXHIBIT 1
NOTICE OF EXERCISE OF
STOCK OPTION TO PURCHASE
COMMON STOCK OF
SOUTHERN ELECTRONICS CORPORATION
Name
Address
Date
Southern Electronics Corporation
0000 Xxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Re: Exercise of Non-Qualified Stock Option
Gentlemen:
Subject to acceptance hereof in writing by Southern Electronics Corporation
(the "Company"), I hereby give at least ten days but not more than thirty days
prior notice of my election to exercise options granted to me to purchase
______________ shares of Common Stock of the Company under the Southern
Electronics Corporation Non-Qualified Stock Option Agreement dated August ___,
1992. The purchase shall take place as of __________, 199_ (the "Exercise
Date").
On or before the Exercise Date, I will pay the applicable purchase price
as follows:
[ ] By delivery of a certified check for $___________ for the full
purchase price payable to the order of Southern Electronics
Corporation.
[ ] By delivery of a certified check for $___________ representing a
portion of the purchase price with the balance to consist of shares
of Common Stock that I have owned for at least six months and that
are represented by a stock certificate I will surrender to the
Company with my endorsement. If the number of shares of Common
Stock represented by such stock certificate exceed the number to be
applied against the purchase price, I understand that a new stock
certificate will be issued to me reflecting the excess number of
shares.
[ ] By delivery of a stock certificate representing shares of Common
Stock that I have owned for at least six months which I will
surrender to the Company with my endorsement as payment of the
purchase price. If the number of shares of Common Stock represented
by such certificate exceed the number to be applied against the
purchase price, I understand that a new certificate will be issued
to me reflecting the excess number of shares.
[ ] By delivery of the purchase price by ________________, a broker,
dealer or other "creditor" as defined by Regulation T issued by the
Board of Governors of the Federal Reserve System. I hereby
authorize the Company to issue a stock certificate representing the
number of shares indicated above in the name of said broker, dealer
or other creditor or its nominee pursuant to instructions received
by the Company and to deliver said stock certificate directly to
that broker, dealer or other creditor (or to such other party
specified in the instructions received by the Company from the
broker, dealer or other creditor) upon receipt of the purchase
price.
The required federal, state and local income tax withholding, if any, on
the exercise of the option shall be paid on or before the Exercise Date.
As soon as the stock certificate is registered in my name, please deliver
it to me at the above address.
If the Common Stock being acquired is not registered for issuance to and
resale by the Optionee pursuant to an effective registration statement on Form
S-8 (or successor form) filed under the Securities Act of 1933, as amended (the
"1933 Act"), I hereby represent, warrant, covenant, and agree with the Company
as follows:
The shares of the Common Stock being acquired by me will be acquired
for my own account without the participation of any other person, with the
intent of holding the Common Stock for investment and without the intent
of participating, directly or indirectly, in a distribution of the Common
Stock and not with a view to, or for resale in connection with, any
distribution of the Common Stock, nor am I aware of the existence of any
distribution of the Common Stock;
I am not acquiring the Common Stock based upon any representation,
oral or written, by any person with respect to the future value of, or
income from, the Common Stock but rather upon an independent examination
and judgment as to the prospects of the Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of any
offers made to other persons by such means;
I am able to bear the economic risks of the investment in the Common
Stock, including the risk of a complete loss of my investment therein;
I understand and agree that the Common Stock will be issued and sold
to me without registration under any state law relating to the
registration of securities for sale, and will be issued and sold in
reliance on the exemptions from registration under the 1933 Act, provided
by Sections 3(b) and/or 4(2) thereof and the rules and regulations
promulgated thereunder;
The Common Stock cannot be offered for sale, sold or transferred by
me other than pursuant to: (A) an effective registration under the 1933
Act or in a transaction otherwise in compliance with the 1933 Act; and (B)
evidence satisfactory to the Company of compliance with the applicable
securities laws of other jurisdictions. The Company shall be entitled to
rely upon an opinion of counsel satisfactory to it with respect to
compliance with the above laws;
The Company will be under no obligation to register the Common Stock
or to comply with any exemption available for sale of the Common Stock
without registration or filing, and the information or conditions
necessary to permit routine sales of securities of the Company under Rule
144 under the 1933 Act are not now available and no assurance has been
given that it or they will become available. The Company is under no
obligation to act in any manner so as to make Rule 144 available with
respect to the Common Stock;
I have and have had complete access to and the opportunity to review
and make copies of all material documents related to the business of the
Company, including, but not limited to, contracts, financial statements,
tax returns, leases, deeds and other books and records. I have examined
such of these documents as I wished and am familiar with the business and
affairs of the Company. I realize that the purchase of the Common Stock
is a speculative investment and that any possible profit therefrom is
uncertain;
I have had the opportunity to ask questions of and receive answers
from the Company and any person acting on its behalf and to obtain all
material information reasonably available with respect to the Company and
its affairs. I have received all information and data with respect to the
Company which I have requested and which I have deemed relevant in
connection with the evaluation of the merits and risks of my investment in
the Company;
I have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks of the
purchase of the Common Stock hereunder and I am able to bear the economic
risk of such purchase; and
The agreements, representations, warranties and covenants made by me
herein extend to and apply to all of the Common Stock of the Company
issued to me pursuant to this Option. Acceptance by me of the certificate
representing such Common Stock shall constitute a confirmation by me that
all such agreements, representations, warranties and covenants made herein
shall be true and correct at that time.
I understand that the certificates representing the shares being purchased
by me in accordance with this notice shall bear a legend referring to the
foregoing covenants, representations and warranties and restrictions on
transfer, and I agree that a legend to that effect may be placed on any
certificate which may be issued to me as a substitute for the certificates being
acquired by me in accordance with this notice.
Very truly yours,
AGREED TO AND ACCEPTED:
SOUTHERN ELECTRONICS CORPORATION
By:_____________________________
Title:__________________________
Number of Shares
Exercised:______________________
Number of Shares
Remaining:______________________ Date:
SCHEDULE I
TO
SOUTHERN ELECTRONICS CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
Vesting Schedule
"Vested Shares" means the percent of shares granted by the Option which is
exercisable pursuant to the following schedule:
Years of Service Vested Shares
Construction
(a) For purposes of the Vesting Schedule, the Optionee shall be granted
a year of service for each consecutive twelve-consecutive-month period following
the Grant Date and during which the Optionee remains, at all times, a director
of the Company.
(b) The right of the Optionee to vest in Common Stock shall cease upon
the termination of the Optionee's service as a director of the Company other
than by death or disability, as provided in the Non-Qualified Stock Option
Agreement between Southern Electronics Corporation and _________________________
dated as of _______________ (the "Agreement"), and thereafter, no further shares
shall become Vested Shares.
(c) Upon death or disability as provided in the Agreement, 100% of all
shares of Common Stock granted by this Option shall become Vested Shares.
