U.S. PAWN, INC.
STOCK OPTION AGREEMENT
UNDER THE: 1995 DIRECTORS' STOCK OPTION PLAN
Between:
U.S. PAWN, INC. (the "Company") and XXXXXXX X. XXXXXXXXX, (the "Director") dated
June 2, 1996.
The Company hereby grants to the Director an option (the "Option") to
purchase 3,000 shares of the Company's common stock under the U.S. Pawn. Inc.
1995 Directors' Stock Option Plan (the "Plan") upon the following terms and
conditions:
1. Purchase Price. The purchase price of the stock shall be $1.70 per
share, which is not less than the fair market value of the average closing bid
and ask price for the Company's common stock as reported by NASDAQ for the
trading period two weeks before and two weeks after December 28, 1995. This
Option may not be exercised for less than seventy-five shares at any time unless
the number of shares purchased is the total number of purchasable at the time
under the Option.
2. Incentive Stock Option. The Option shall be an Incentive Stock Option,
as defined in the Plan.
3. Period of Exercise. The Option will expire ten years from the date of
this Agreement. The Option may be exercised only while the Director is a member
of the Company's Board of Directors ("Board) or within six months thereafter
pursuant to Section 6.
Where the Director holds (whether under this Option alone or under this
Option in conjunction with other stock options) stock options upon shares of the
Company's common stock having an aggregate fair market value (determined at the
time of grant of each option) exceeding $100,000, the $100,000 Limitation set
forth in Section 4 below may impose additional limitations upon the
exercisability of this Option and any other stock options granted to the
Director. Such limitations are in addition to and not in lieu of, the
limitations set forth in this Section 3.
4. $100 000 Limitation. Notwithstanding an~thing to the contrary contained
herein, the total fair market value (determined as of the date of grant of an
option) of shares of stock with respect to which this Option (and any other
stock options granted by the Company) shall become exercisable for the first
time during any calendar year shall not exceed $100,000. (Hereinafter this
limitation is sometimes referred to as the "$100,000 Limitation.") If in any
calendar year shares of stock having a fair market value of more than $100,000
first would become exercisable, but for the limitations of this section, this
Option shall be exercisable in such calendar year only for shares having a fair
xxxx,et value not exceeding $100,000. (Hereinafter, shares with respect to which
this Option is not exercisable in a calendar year due to the $100,000 Limitation
are referred to as "Excess Shares.")
This Option shall become exercisable with respect to Excess Shares from a
calendar year in the next succeeding calendar year (subject to any other
usp\EDE I DSO. DOC
restrictions on exercise which may be contained herein), provided that the
$100.000 Limitation shall also be applied to such succeeding calendar year.
Subject TO the term or this Option, such carryovers of Excess Shares shall be
made to succeeding calendar years, including carryovers of any Excess Shares
from previous calendar years, without limitation.
If as of the date of this Agreement the Director already holds stock
options granted by the Company (hereinafter any such stock options are referred
to as "Prior Options"), and the fair market value (determined as the date of
grant of each option) of the shares subject to this Option and the Prior Options
held by the Director is such that the $100.000 Limitation must be imposed, the
$100,000 Limitation shall be applied as follows unless a special provision is
made. If no special provision is made. the $100,000 Limitation shall be applied
by giving priority to options which first become exercisable during a calendar
year under the Prior Options. Thus, in applying the $100,000 Limitation under
this Option the fair market value (determined as of the date of grant) of the
shares of stock with respect to which options first become exercisable under the
Prior Options during the calendar year shall first be determined. Only the
balance remaining for the calendar year of the $100,000 Limitation, if any, may
be exercisable under this Option for the calendar year, with any excess to be
carried over as provided in the preceding paragraph, but with such carryover
also to be subject to the provisions of this paragraph.
Director acknowledges that it is possible that he may be granted incentive
stock options by the Company after the date of this Agreement. (Hereinafter such
options are referred to as "Subsequent Options.") If the exercise price of a
Subsequent Option is less than the exercise price of this Option, and if
permitted under the regulations and decisions applicable to the $100,000
Limitation, Director agrees that the Company may reduce the number of shares of
stock for which this Option is exercisable in specified calendar years, so that
all or part of the $100,000 Limitation for said calendar years may be applied to
such Subsequent Option. permitting earlier exercise of such Subsequent Option
than would otherwise be possible. Where such reductions are made, Director
agrees to enter into any appropriate documentation to implement such reductions.
Director further acknowledges that, as provided in the Plan, in certain
circumstances connected with a dissolution or liquidation of the Company, or a
merger, consolidation or other form of reorganization in which the Company is
not the surviving corporation, the imposition of the 5100,000 Limitation may
result in the termination of all or part of this Option or other stock options.
5. Transferability. This Option is not transferable except by will or the
laws of descent and distribution and may be exercised during the lifetime of the
Director only him.
6. Termination of Directorship. In the event that the Director's
participation on the Board terminates for any reason, the Option may be
exercised by the Director within six months after the date of such termination.
7. Investment Representation; Legend. The Director represents and agrees
that all shares of common stock purchased by him under this Agreement will be
purchased for investment purposes only and not with a view to distribution or
resale. The Company may require that an appropriate legend be inscribed on the
face of any certificate issued under this Agreement, indicating that transfer of
the shares is restricted,
2
and may place an appropriate stop transfer order with the Company's transfer
agent with respect to such shares.
8. Method of Exercise. The Option may be exercised. subject to the terms
and conditions of this Agreement, by written notice to the Company. The notice
shall be in the form attached to this Agreement and will be accompanied by
payment (in such form as the Company may specify) of the full purchase price of
the shares to be issued. The Company will issue and deliver certificates
representing the number of shares purchased under the Option. registered in the
name of the Director as soon as practicable after receipt of the notice.
9. Withholding. In any case where withholding is required or advisable
under federal. state or local law in connection with any exercise by Director
hereunder, the Company is authorized to withhold appropriate amounts from
amounts payable to Director, or may require Director to remit to the Company am
amount equal to such appropriate amounts.
10. Incorporation of Plan. This Agreement is made pursuant to the
provisions of the Plan, which is incorporated by reference herein. Terms used
herein shall have the meaning employed in the Plan, unless the context clearly
requires otherwise. In the event of a conflict between the provisions of the
Plan and the provisions of this Agreement, the provisions of the Plan shall
govern.
ACCEPTED: U.S. PAWN, INC.
/s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxx Xxxxxx
------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxxx, Director Xxxxxx Xxxxxx, President
3
U.S. PAWN, INC.
NOTICE OF E,EXERCISE OF STOCK OPTION ISSUED
UNDER THE 1995 DIRECTORS' STOCK OPTION PL\N
To: Compensation Committee
U.S. Pawn, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
I hereby exercise my Option dated June 22, 1996 to
purchase......................................... shares of no par value common
stock of the Company at the option exercise price of $1.70 per share. Enclosed
is a certified or cashier's check in the total amount of.......................,
or payment in such other form as the Company has specified.
I represent to you that I am acquiring said shares for investment purposes
and not with a view to any distribution thereof. I understand that my stock
certificate may bear an appropriate legend restricting the transfer of my shares
and that a stock transfer order may be placed with the Company's transfer agent
with respect to such shares.
I request that my shares be issued in my name as follows:
--------------------------------------------------------------------------------
(Print your name in the form in which you wish to have the shares
registered)
-----------------------
(Social Security Number)
--------------------------------------------------------------------------------
(Street and Number)
--------------------------------------------------------------------------------
(City) (State) (Zip Code)
Dated: ...................., 199.....
Signature:
----------------------------
