EXHIBIT 10.1
THIS OPTION AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS, AND NO INTEREST HEREIN OR THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
COVERING ANY SUCH TRANSACTION OR SUCH TRANSACTION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS.
No. OPTION TO PURCHASE
ISSUED: November __, 1999 COMMON STOCK
Void After: As Provided Herein
TRISTAR CORPORATION
OPTION
THIS IS TO CERTIFY that, for value received and subject to the terms and
conditions hereof, __________, or such person to whom this Option is transferred
in compliance with SECTION 7 hereof ("HOLDER"), is entitled to exercise this
Option to purchase up to an aggregate of _________ (the "MAXIMUM OPTION"), fully
paid and nonassessable shares of TRISTAR CORPORATION, a Delaware corporation
("COMPANY"), Common Stock, par value $.01 per share (the "OPTION STOCK"), at a
price per share of $___ (the "EXERCISE PRICE") (such number of shares and the
Exercise Price being subject to adjustment as provided herein). No Option Stock
shall vest hereunder on the date hereof. Subject to the Maximum Options, ____
shares of Option Stock shall vest on each November __, beginning November __,
2000 until November __, 2005, when the unvested Option Stock shall vest. Holder
shall have no rights (including, without limitation, rights to purchase or sell
Option Stock or rights of a shareholder of Company) with respect to any shares
of Option Stock, unless and until such shares vest in accordance with the terms
of this Option.
This Option is subject to the following additional terms and conditions:
1. EXERCISE RIGHTS
This Option may be exercised by Holder, at any time on or before the
Expiration Date, in whole or in part, by delivering to Company at 12500 San
Pedro Avenue, Suite 500, San Antonio, Texas 78216 (or such other office or
agency of Company as it may designate by notice in writing to Holder at the
address of Holder appearing on the books of Company) (i) this Option
certificate, (ii) a money order, certified or bank check drawn in United States
currency or wire transfer and payable to Company in the amount of the Exercise
Price multiplied by the number of shares for which this Option is being
exercised, and (iii) the form of Election to Purchase attached hereto duly
completed and executed by Holder. The payment and subscription materials shall
be accompanied by such other instruments or agreements duly signed by Holder as
may be reasonably necessary or advisable in order that the issuance of such
Option Stock comply with applicable rules and
regulations under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
any applicable state securities laws or any requirement of any national
securities exchange on which Option Stock may be traded. For purposes of this
Option, the "EXPIRATION DATE" shall mean November __, 2009.
2. DELIVERY OF STOCK CERTIFICATES
As soon as practicable after exercise of this Option, in whole or in part,
Company shall issue and deliver or cause to be delivered to Holder, or, upon the
order of Holder, to such person or persons as may be directed by Holder subject
to the provisions of SECTION 7 hereof, a certificate or certificates for the
number of shares of Option Stock to which Holder is entitled, and if the Option
Stock represented by the surrendered Option shall not have been exercised in
full, a new Option for the remaining number of shares of Option Stock which
shall not have been exercised (however, to the extent such a new Option is
issued for such remaining number of shares of Option Stock on the same terms and
conditions as set forth herein, such replacement Option may be unilaterally
executed and delivered by Company, without need for Holder's signature).
3. COVENANTS AS TO OPTION STOCK
All the shares of Option Stock issued pursuant to the exercise of this
Option will, upon their issuance, be validly issued and outstanding, fully paid
and nonassessable. Company shall pay all documentary stamp taxes attributable to
the initial issuance of Option Stock. Company shall not be required, however, to
pay any tax imposed in connection with any transfer involved in the issuance of
Option Stock in a name other than that of Holder. In such case, Company shall
not be required to issue any certificate for Option Stock until the person or
persons requesting the same shall have paid to Company the amount of any such
tax or shall have established to Company's satisfaction that the tax has been
paid or that no tax is due. Company shall at all times reserve and keep
available such number of shares of its authorized but unissued Option Stock as
shall from time to time be sufficient to permit the exercise of this Option.
4. NOTICE TO HOLDER
4.1 NOTICE TO HOLDER. If, at any time after the date hereof:
(a) Company shall authorize the distribution to all holders of Option
Stock or evidence of Company's indebtedness, assets (other than Option Stock for
which adjustment is provided in SECTION 5 hereof) or cash dividends or cash
distributions payable out of current earnings, retained earnings or earned
surplus or dividends payable in capital stock of Company;
(b) there shall be proposed any consolidation or merger to which Company
is to be a party and for which approval of holders of Option Stock is required,
or the conveyance or transfer of the assets of Company substantially as an
entirety;
(c) there shall be proposed any capital reorganization or reclassification
(other than a subdivision or combination of shares, stock dividend,
consolidation, merger or conveyance or transfer of assets provided for elsewhere
herein); or
-2-
(d) there shall be proposed the voluntary or involuntary dissolution,
liquidation or winding up of Company;
Company shall cause to be given to Holder at the address registered with
Company, by first-class mail, postage prepaid, a written notice stating (i) the
date as of which holders of record of shares of Option Stock to be entitled to
receive any such distributions are to be determined or (ii) the date on which
any consolidation, merger, conveyance, transfer, reorganization,
reclassification, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of record of
shares of Option Stock shall be entitled to exchange the shares for securities
or other property, if any, deliverable upon the consolidation, merger,
conveyance, transfer, reorganization, reclassification, dissolution, liquidation
or winding up. Such notice shall be filed and mailed in the case of a notice
pursuant to clause (i) above at least 10 calendar days before the record date
specified and, in the case of a notice pursuant to clause (ii) above, at least
20 calendar days before the earlier of the dates specified.
4.2 EFFECT OF MERGER, ETC. In case, at any time prior to the Expiration
Date, of any consolidation or merger of Company with or into another entity
(other than a consolidation or merger in which Company is a continuing operation
and which does not result in any change in the Option Stock), a capital
reorganization or reclassification of the capital stock of Company (other than a
subdivision or combination of shares, stock dividend, consolidation, merger or
conveyance or transfer of assets provided for elsewhere herein) or the sale of
all or substantially all the properties and assets of Company as an entirety to
any other entity (a "VESTING EVENT"), all Option Stock granted under this Option
shall immediately vest upon the receipt of the notice required by SECTION 4.1
hereof and Holder shall be entitled to exercise this Option for a period of 30
days thereafter. If Holder fails, for whatever reason, to exercise this Option
during such 30-day period, this Option shall expire, even if prior to the
Expiration Date, the Option shall become void and all rights of Holder under
this Option shall cease.
5. ADJUSTMENTS FOR STOCK SPLITS, ETC.
If Company shall issue any shares of the same class as the Option Stock as
a stock dividend or subdivide the number of outstanding shares of such class
into a greater number of shares, then, in either such case, the Exercise Price
in effect before such dividend or subdivision shall be proportionately reduced
and the number of shares of Option Stock at that time issuable pursuant to the
exercise of this Option shall be proportionately increased; and, conversely, if
Company shall contract the number of outstanding shares of the same class as the
Option Stock by combining such shares into a smaller number of shares, then the
Exercise Price in effect before such combination shall be proportionately
increased and the number of shares of Option Stock at that time issuable
pursuant to the exercise of this Option shall be proportionately decreased. Each
adjustment in the number of shares of Option Stock issuable hereunder shall be
to the nearest whole share.
6. FRACTIONAL SHARES
No fractional shares shall be issued upon the exercise of this Option. In
lieu of fractional shares, Company shall pay Holder a sum in cash equal to the
fair market value of the fractional
-3-
shares on the date of exercise; such fair market value being the average
weighted closing price of the Option Stock on The Nasdaq National Market during
the ten (10) consecutive trading day period ending at the close of the trading
day on the day of exercise pursuant to SECTION 1 hereof.
7. RESTRICTIONS ON TRANSFER
Neither this Option nor the Option Stock issued upon exercise hereof shall
be transferable by Holder or Holder's permitted assigns except (a) to persons
who demonstrate to the reasonable satisfaction of Company that they are
"accredited investors" within the meaning of Regulation D promulgated under the
Securities Act, (b) in the case of an individual, pursuant to such individual's
last will and testament or the laws of descent and distribution, or (c) to any
underwriter in connection with an underwritten public offering in which this
Option will be exercised by such underwriters prior to or concurrently with the
sale of the Option Stock to the public and, in any of the foregoing cases, only
in compliance with the Securities Act. Any attempted transfer in contravention
of this SECTION 7 shall be null and void. Company may require any transferee to
agree in writing to the restrictions contained in this SECTION 7. Company may
also require any transferee to execute an investment letter containing
representation and warranties as to such transferee's investment intent,
financial sophistication and ability to bear the risk of any investment in the
Option and the Option Stock, and containing such other representations and
warranties as Company may reasonably request or otherwise reasonably appropriate
and acceptable to Company to demonstrate compliance with the Securities Act,
before any such transfer shall be given effect.
8. LEGEND
Each stock certificate representing Option Stock shall carry such
appropriate legend, and such written instructions shall be given to Company's
transfer agent, as may be reasonably necessary or advisable to satisfy the
requirements of the Securities Act or any state securities laws.
9. HOLDER AS OWNER
Company may deem and treat the holder of record of this Option as the
absolute owner hereof for all purposes regardless of any notice to the contrary.
10. NO SHAREHOLDER RIGHTS
This Option shall not entitle Holder nor any other person or entity to any
voting rights or any other rights or privileges as a shareholder of Company or
to any other rights or privileges whatsoever except the rights stated herein;
and no dividend or interest shall be payable or shall accrue in respect of this
Option, until and then only to the extent that this Option shall be exercised
and certificates representing the Option Stock have been issued and delivered to
Holder.
11. LOST OPTION CERTIFICATE
Upon receipt by Company of satisfactory evidence of the loss, theft,
destruction or mutilation of this Option and either (in the case of loss, theft
or destruction) reasonable indemnification or (in
-4-
the case of mutilation) the surrender of this Option for cancellation, Company
will execute and deliver to Holder, without charge, a new Option of like
denomination.
12. NOTICES
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, given by prepaid telex or telegram or
by facsimile or other similar instantaneous electronic transmission device or
mailed first class, postage prepaid, certified United States mail, return
receipt requested, as follows:
(a) If to Company, at:
12500 San Pedro Avenue, Suite 500
San Antonio, Texas 78216
Attention:
Facsimile No.: (210) 402-2239
(b) If to Holder, at:
___________________________
___________________________
___________________________
Attention: _____________________
Facsimile No.: _________________
Any party may change its address for notice by giving to the other party
written notice of such change. Any notice given under this SECTION 12 shall be
effective when received at the address for notice for the party to which the
notice is given.
13. SUCCESSOR
All the covenants and provisions of this Option by or for the benefit of
Company or Holder shall bind and inure to the benefit of their respective
successors and assigns hereunder; provided that this SECTION 13 shall not
authorize Holder to assign this Option or the Option Stock received upon
exercise of this Option except as expressly set forth herein.
14. BENEFITS OF THIS OPTION
Nothing in this Option shall be construed to give to any person or company
other than Company and Holder any legal or equitable right, remedy or claim
under this Option. This Option shall be for the sole and exclusive benefit of
Company and such Holder.
15. CONSTRUCTION
-5-
The validity and interpretation of the terms and provisions of this Option
shall be governed by the laws of the State of Delaware, without regard to
conflict of law principles. The descriptive headings of the several sections of
this Option are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
16. REVIEW OF COUNSEL
Each party acknowledges that it and its counsel have received, reviewed
and been involved in the drafting of this Option and that normal rules of
construction, to the effect that ambiguities are to be resolved against the
drafting party, shall not apply.
IN WITNESS WHEREOF, Company has executed this Option as of the date first
written above.
TRISTAR CORPORATION
By: ___________________________________
Name: _________________________________
Title: ________________________________
HOLDER
_______________________________________
_______________________________________
-6-
ELECTION TO PURCHASE
To: Tristar Corporation
The undersigned hereby irrevocably elects to purchase _________ shares of
Common Stock of Tristar Corporation ("COMPANY") issuable upon the exercise of
the attached Option, and requests that certificates for such shares be issued in
the name of and delivered to the address of the undersigned, and, if said number
of shares shall not be all the shares that may be purchased pursuant to the
attached Option, that a new Option evidencing the right to purchase the balance
of such shares be registered in the name of, and delivered to, the undersigned
at the address stated below. The undersigned hereby represents and warrants to
Company (i) that the undersigned is an "accredited investor" as defined in Rule
501 promulgated under the Securities Exchange Act of 1934, as amended, or the
undersigned has provided documentation reasonably acceptable to Company in the
opinion of Company, that the issuance of the Common Stock will not violate any
applicable securities law, and (ii) that said shares of Common Stock of Company
are being acquired for the account of the undersigned for investment and not
with a view to, or for sale in connection with, any distribution or public
offering thereof within the meaning of the Securities Act of 1933, as amended.
Payment enclosed in the amount of $______________________
Dated: ______________________________
Name of holder of Options: _____________________________________________
(please print)
Address: _______________________________________________________________
Signature: _____________________________________________________________
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers to
the transferee named below the attached Option, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint the
transfer agent of Tristar Corporation ("COMPANY") as the undersigned's attorney,
to transfer said Option on the books of Company, with full power of substitution
in the premises.
Dated: __________________________________
Name of holder of Options: ___________________________________________
(please print)
Address: _____________________________________________________________
Signature: ___________________________________________________________
Name of transferee: __________________________________________________
(please print)
Address of transferee: _______________________________________________