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EXHIBIT 10.2
OPTION AND SEVERANCE AGREEMENT
THIS OPTION AND SEVERANCE AGREEMENT ("Agreement") is made this 30 day
of October 1995, by and between Garden Botanika, Inc., a Washington corporation
(the "Company"), and John Garruto ("Executive").
W I T N E S S E T H
WHEREAS, the Board of Directors ("Board") of the Company has determined
that it is in the best interests of the Company to enter into this Agreement
with Executive;
WHEREAS, Executive has agreed to accept employment with the Company to
serve, among other things, as the Vice President of Research and Development,
commencing as of the date hereof ("Commencement Date"); and
WHEREAS, in consideration of the promises and of the mutual covenants
herein contained, it is hereby agreed as follows:
1. Employment.
1.1 In General. The Company agrees to employ Executive and
Executive accepts employment by the Company as the Company's Vice President of
Research and Development. In this capacity, Executive shall have responsibility
for and exercise general supervision and control over the Company's research,
laboratory and manufacturing operations. In that capacity, Executive shall
consult with and report to the Company's chief executive officer and shall carry
out such other duties and responsibilities, consistent with his position as Vice
President of Research and Development, as the chief executive officer directs.
1.2 Salary. Executive shall be paid an annual salary in such
amount as may be determined by the Company's board of directors from time to
time based upon Executive's performance, the Company's performance, comparable
compensation of others similarly situated and other factors. Executive's annual
salary shall initially be $130,000, which shall be payable
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in approximately equal installments in accordance with the Company's general
salary payment practices.
1.3 Benefits. In addition to the compensation described in
Section 1.2, Executive will be entitled to medical and dental care, disability,
life insurance, sick leave, vacation and other benefits customary and usual for
employees of the Company and consistent with Executive's position.
1.4 Confidentiality Agreement. In connection with, and as a
condition of, the employment of Executive by the Company, Executive agrees to
execute and deliver to the Company the Company's standard form of
Confidentiality Agreement, as it may be amended from time to time, subject to
the provisions of this Agreement. In the event of a conflict between the terms
of such Confidentiality Agreement and this Agreement, the terms of this
Agreement shall govern.
2. Stock Option Award.
2.1 Grant of Option.
Upon execution of this Agreement, the Company shall grant
Executive the right and option (the "Option") to purchase an aggregate of
200,000 shares (the "Shares") of the Company's authorized shares of Common
Stock, par value $.01 per share (the "Common Stock"), at an exercise price of
$0.25 per share. This Option shall be a nonqualified option, exercisable in
whole or in part, and Executive's right to exercise the Option shall vest to the
extent of one-sixtieth (1/60) of the number of option shares as of each monthly
anniversary date of the date of this Agreement for so long as Executive shall be
employed by the Company. Upon termination of employment, Executive shall have no
right to purchase shares underlying unvested options, and unvested options
shall, upon such termination, confer no rights whatsoever.
2.2 Term.
The Option shall terminate ten years and two days from the
Commencement Date.
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2.3 Adjustments.
In the event that the outstanding shares of Common Stock are
exchanged for or converted into cash, property and/or a different number or kind
of securities by reason of any merger, combination, consolidation, acquisition
or similar event (but not including any public or private offering of securities
in which no single individual or entity acquires over fifty percent (50%) of the
voting control of the Company), proper provision shall be made in the agreement
governing any such transaction for any successor to the Company to provide
Executive immediately following such event (the "Record Date") with analogous
rights to those contained in this Section 2.
2.4 Manner of Exercise.
Executive may exercise this Option, or any portion of this
Option, by giving written notice to the Company at its principal executive
office, to the attention of the President of the Company, accompanied by a copy
of the Stock Purchase Agreement substantially in the form attached to this
Agreement as Exhibit 2.4 executed by Executive (or, at the option of the
Company, such other form of stock purchase agreement as shall then be acceptable
to the Company), payment of the exercise price, payment of any applicable
federal, state, and local withholding or employment taxes, and delivery of such
other documents as the Company may request. The date the Company receives all
required documents from Executive accompanied by payment will be considered as
the date this Option was exercised. After exercise of the Option, the Company
shall, without stock issue or transfer taxes to the Executive or other person
entitled to exercise, deliver to the Executive or other person a certificate or
certificates for the requisite number of Shares ("Exercised Shares"). The
Executive or a transferee of the Executive shall not have any privileges as a
shareholder with respect to any Option Shares covered by the Option until the
date the Executive delivers to the Company his notice of exercise, an executed
Stock Purchase Agreement, full payment of the exercise price and taxes for the
Exercised Shares and such other documents that the Company may request.
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2.5 Payment.
Except as permitted by the Company when the Option is
exercised, payment in full, in cash, shall be made for all Option Shares
purchased at the time written notice of exercise of the Option is given to the
Company, and proceeds of any payment shall constitute general funds of the
Company.
2.6 Tax Withholding.
At the time of any exercise of the Option (or at any such
later time as such obligation arises or as the amount of such obligation becomes
determinable), Executive shall pay to the Company in cash all applicable
federal, state, and local withholding and employment taxes required to be
withheld resulting from exercise of the Option, from a transfer or other
disposition of the Option Shares, or otherwise related to the Option or the
Option Shares. The Company may withhold from Executive's wages, or require
Executive to pay to the Company, such amount. In addition, if and to the extent
authorized and approved by the Company in its sole discretion, Executive may
make an election, in the form prescribed by the Company, to have shares acquired
upon exercise of the Option withheld by the Company or to tender other shares of
Common Stock or other securities of the Company already owned by Executive to
the Company at the time the amount of such tax obligation is determined to pay
the amount of such obligation.
2.7 Nonassignability of Option.
The Option is not assignable or transferable by Executive
except by will or by the laws of descent and distribution. During the life of
Executive, the Option is exercisable only by the Executive. Any attempt to
assign, pledge, transfer, hypothecate or otherwise dispose of this Option in a
manner not herein permitted, and any levy of execution, attachment or similar
process on this Option, shall be null and void.
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2.8 Market Standoff.
Executive hereby agrees that if so requested by the Company or
any representative of the underwriters in connection with any registration of
the offering of the securities of the Company under the Securities Act of 1933,
as amended (the "Act"), Executive shall not sell or otherwise transfer the
Exercised Shares for a period of up to 180 days following the effective date of
a Registration Statement filed under the Act. The Company may impose
stop-transfer instructions with respect to the Exercised Shares subject to the
foregoing restrictions until the end of each period.
2.9 Securities Law Issues.
No option shall be granted or exercised nor shall shares
otherwise be issued if, in the opinion of counsel to the Company, such grant,
exercise or issuance would not be in compliance with federal or state securities
laws. The Company shall use its best efforts to comply with all legal
requirements applicable to such grant, exercise or issuance. Subject to any
limitations that may be imposed by law, regulation or contract, the Executive
shall be entitled to the same rights to resell the shares underlying the Option
as employees of the Company may have with respect to shares issued upon the
exercise of options under the terms of the Company's 1993 Stock Option Plan,
including resale rights under Rule 701 of the Securities Act of 1933, to the
extent such rights are legally available and their exercise is acceptable to any
underwriter involved in a proposed offering of the Company's Common Stock.
Unless a registration statement with respect to shares issuable upon exercise of
an option is then effective under the Act, however, Executive shall represent
and agree as a condition precedent to the issuance of shares or the exercise of
any option granted pursuant to this Agreement that the shares are to be acquired
for investment and not with a view to distribution and that he will not make any
transfer of such shares in the absence of an opinion of counsel to the Company
to the effect that such transfer is in compliance with or exempt from the
registration and prospectus requirements of the Act.
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3. Termination of Employment.
3.1 In General.
For five (5) years following the date of this Agreement,
Executive's employment with the Company may be terminated either with or without
Cause only by a majority vote of the Company's Board of Directors. Nothing in
this Agreement shall interfere with or limit in any way the right of the
Company, acting (if necessary under the terms of this Agreement) through its
Board of Directors, to terminate Executive's employment at any time, nor confer
upon Executive any right to continue in the employ of the Company or any of its
affiliates.
3.2 Severance Payment and Benefits.
For the first year following the date of this Agreement, in
the event of termination without Cause as determined in good faith by the
Company's Board of Directors, Executive shall be entitled to receive a severance
payment equal to nine (9) months of his then current salary and a continuation
in Company health benefits at the Company's expense for nine (9) months
following the effective date of termination. Notwithstanding any other
definition used by the Company, the term "Cause" as used in this Agreement shall
mean (i) any material act of dishonesty in connection with Executive's duties or
breach of trust (solely as defined herein); (ii) any violation of the Company's
then current policy concerning "Conflicts of Interest"; (iii) any intentional
failure or refusal to perform any lawful material duties and responsibilities on
behalf of the Company or gross neglect in not properly performing such duties;
(iv) any continued misuse of alcohol or drugs which interferes with Executive's
material duties; and (v) any conviction of a felony or of any crime involving
moral turpitude, fraud or misrepresentation. The parties agree that, during the
term of Executive's employment with the Company, he shall have a duty to utilize
his abilities in good faith to promote the best interests of the Purchaser and
that a knowing failure to do so would constitute a "breach of trust" as used
herein.
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3.3 Conflict Situations.
Notwithstanding anything to the contrary in the Company's
policy concerning "Conflicts of Interest," the Company acknowledges that, from
time to time, Executive may provide consulting service to his wife Michelle
Garruto and/or Innovative Biosciences Corporation ("IBC"). The Company agrees
that, so long as Michelle Garruto is the majority owner of IBC, Mr. Garruto may
provide such service and that such service will not constitute a breach of the
Company's policy; provided, however, that: (i) so long as this Agreement is in
effect, Mr. Garruto shall devote his full time best efforts to promoting the
affairs of the Company, and (ii) such consulting shall not involve confidential
or proprietary information, processes or formulas belonging to the Company. In
addition, notwithstanding anything to the contrary in the Company's policy
concerning "Conflicts of Interest," the Company acknowledges and agrees that,
immediately following termination of Executive's employment with the Company for
any reason, Executive may return to providing consulting services to potential
competitors of the Company; provided, however, that Executive shall continue to
be bound by the terms of any applicable Confidentiality Agreement previously
signed by him.
4. Right of First Refusal.
Executive understands and agrees that his acquisition of shares of
Common Stock will be subject to Section 16.7 of the Company's Investors' Rights
Agreement, by which the Company is prohibited from issuing any capital
securities or options or rights to acquire capital securities to any officer or
employee unless the Company has a right of first refusal to purchase the vested
shares from such officer or employee or former officer or employee transferring
in excess of ten thousand (10,000) shares upon transfer by the holder thereof
and, if the Company does not exercise such right of first refusal, certain other
investors shall have a pro rata right of first refusal to make such purchase,
terminating in the event of a public offering of the Company's securities.
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5. Representations and Warranties.
The Company represents and warrants to Executive as follows:
(a) The Company is duly organized and validly existing and in good
standing under the laws of the State of Washington. The Company has the
corporate power and authority to enter into and deliver, and perform its
obligations under, this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid, legal and binding obligation of the
Company, enforceable against it in accordance with its terms, subject to
customary enforceability exceptions.
(c) Neither the execution and delivery of this Agreement by the
Company, nor the consummation of the transactions contemplated hereby, conflict
with, violate or result in a default under, the Articles of Incorporation or the
Bylaws of the Company, any material agreement, mortgage, indenture or instrument
to which the company is a party or by which any of the Company's properties are
bound, any law, rule or regulation applicable to the Company or any order,
decree or judgment binding on the Company or any of its properties.
6. Non-Assignability.
This Agreement is entered into in consideration of the personal
qualities of Executive and may not be, nor may any right or interest hereunder
be, assigned by him without the prior written consent of the Company.
7. Modifications.
Any modification of this Agreement will be effective only if it is in
writing and signed by both parties.
8. Notices.
Any notice, correspondence, or payment required or permitted to be
given or made hereunder shall be deemed to have been duly
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given or made when personally delivered to Executive or to Company, or if
mailed, postage prepaid, registered or certified mail or by overnight carrier
(e.g. Federal Express, Airborne), to Executive at ______________________________
________________________________________________________________________________
and to Company to the attention of Michael W. Luce, at 8624 154th Avenue
Northeast, Redmond, Washington 98052 or at such other address as may be
designated in writing by either party to the other, said notice, correspondence
and/or payment, if mailed, being deemed to have been duly given three business
days after the date so mailed.
9. Severability.
Any determination by a court of competent jurisdiction that any
provision herein contained is invalid or unenforceable shall not affect the
validity or the enforceability of any other provision of this Agreement. If any
provisions are determined to be invalid or unenforceable, Executive and the
Company shall use their best efforts to agree upon valid and enforceable
provisions that will be reasonably substituted for the invalid and unenforceable
provisions and shall incorporate such provisions in this Agreement.
10. Governing Law; Venue; Attorneys' Fees.
This Agreement shall be governed by and construed under the laws of the
State of Washington as applied to agreements among Washington residents entered
into and to be performed entirely within the State of Washington. Each party
shall bear his, her or its legal expenses incurred in the preparation,
negotiation and closing of the transactions contemplated by this Agreement. Any
legal action or proceeding with respect to this Agreement may be brought in the
state courts of Washington State in King County, Washington or in the federal
courts for the Western District of Washington. If any party to this Agreement
seeks to enforce its rights under this Agreement, the non-prevailing party shall
pay all costs and expenses incurred by the prevailing party, including
reasonable attorneys' fees.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written:
GARDEN BOTANIKA, INC. EXECUTIVE:
By: /s/Myron E. Kirkpatrick /s/John Garruto
----------------------- ---------------
Its: Vice President/CFO John Garruto
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EXHIBIT 2.4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") dated as of ______________,
19___, is made between GARDEN BOTANIKA, INC., a Washington corporation (the
"Company"), and John Garruto ("Purchaser").
THE PARTIES AGREE AS FOLLOWS:
1. Purchase of Shares.
Pursuant to a stock option and severance agreement ("Option Agreement")
previously executed by the parties, the Company hereby sells to Purchaser, and
Purchaser hereby buys from the Company, _______ shares (the "Shares") of the
Company's Common Stock ("Common Stock") on the terms and conditions set forth
herein and in the Option Agreement, the terms and conditions of the Option
Agreement being incorporated into this Agreement by reference.
2. Purchase Price.
Purchaser shall purchase the Shares from the Company, and the Company
shall sell the Shares to Purchaser, at a price of $0.25 per share (the "Exercise
Price"), for a total purchase price of $_____ (the "Purchase Price").
3. Manner of Payment.
Purchaser shall pay the Purchase Price of the Shares in cash (or in the
manner set forth in Exhibit 3 to this Agreement, the absence of any Exhibit 3
indicating that no such exhibit was intended).
4. Stock Certificate Restrictive Legends.
Stock certificates evidencing Shares may bear such restrictive legends
as the Company and the Company's counsel deem
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necessary or advisable under applicable law or pursuant to this Agreement,
including without limitation, the following legend:
"The securities represented hereby are subject to restrictions on
transfer for a period of up to 180 days following the effective date of a
registration statement under the Securities Act of 1933, as amended, for an
offering of the Company's securities as more fully provided in an agreement
relating to the option to purchase such securities."
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5. Representations, Warranties, Covenants, and Acknowledgments of
Purchaser.
Purchaser hereby represents, warrants, covenants, acknowledges and
agrees that:
5.1 Investment.
Purchaser is acquiring the Shares for Purchaser's own account,
and not for the account of any other person. Purchaser is acquiring the Shares
for investment and not with a view to distribution or resale thereof except in
compliance with applicable laws regulating securities.
5.2 Business Experience.
Purchaser is capable of evaluating the merits and risks of
Purchaser's investment in the Company evidenced by the purchase of the Shares.
5.3 Relation of Company.
Purchaser is presently an officer, director, or employee of,
or advisor or consultant to, the Company and in such capacity has become
personally familiar with the business, affairs, financial condition and results
of operations of the Company.
5.4 Access to Information.
Purchaser has had the opportunity to ask questions of, and to
receive answers from, appropriate executive officers of the Company with respect
to the terms and conditions of the transactions contemplated hereby and with
respect to the business, affairs, financial conditions, and results of
operations of the Company. Purchaser has had access to such financial and other
information as is necessary in order for Purchaser to make a fully-informed
decision as to investment in the Company by way of purchase of the Shares, and
has had the opportunity to obtain any additional information necessary to verify
any of such information to which Purchaser has had access.
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5.5 Registration.
Purchaser may bear the economic risk of investment for an
indefinite period of time because the sale to Purchaser of the Shares has not
been registered under the Act, and the Shares cannot be transferred by Purchaser
unless such transfer is registered under the Act or an exemption from such
registration is available. The Company has made no agreements, covenants or
undertakings whatsoever to register the transfer of any of the Shares under the
Act. The Company has made no representations, warranties, or covenants
whatsoever as to whether any exemption from the Act, including, without
limitation, any exemption for limited sales in routine brokers' transactions
pursuant to Rule 144, will be available; if the exemption under Rule 144 is
available at all, it will not be available until at least two years after
payment of cash for the Shares and not then unless: (a) a public trading market
then exists in the Company's common stock; (b) adequate information as to the
Company's financial and other affairs and operations is then available to the
public; and (c) all other terms and conditions of Rule 144 have been satisfied.
5.6 Tax Advice.
The Company has made no warranties or representations to
Purchaser with respect to the income tax consequences of the transactions
contemplated by this Agreement and Purchaser is in no manner relying on the
Company or its representatives for an assessment of such tax consequences.
6. Binding Effect.
Subject to the limitations set forth in this Agreement, this Agreement
shall be binding upon, and inure to the benefit of, the executors,
administrators, heirs, legal representatives, successors and assigns of the
parties to this Agreement.
7. Taxes.
Purchaser shall execute and deliver to the Company with this executed
Agreement a copy of the Acknowledgment and Statement of Decision Regarding
Election Pursuant to Section 83(b) of the
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Internal Revenue Code (the "Acknowledgment") attached to this Agreement as
Exhibit 7A. Purchaser shall execute and submit with the Acknowledgment a copy of
the Election Pursuant to Section 83(b) of the Code, attached to this Agreement
as Exhibit 7B, if Purchaser has indicated in the Acknowledgment his decision to
make such an election. Purchaser should consult his tax advisor to determine if
there is a comparable election to file in the state of his residence and whether
such filing is desirable under the circumstances. The Company may withhold from
Purchaser's wages, or require Purchaser to pay to the Company, any applicable
withholding or employment taxes resulting from the purchase of Shares hereunder
or from the lapse of any restrictions imposed on the Shares.
8. Miscellaneous.
8.1 Assignment; Binding Effect.
Subject to the limitations set forth in this Agreement, this
Agreement shall be binding upon and insure to the benefit of the executors,
administrators, heirs, legal representatives, and successors of the parties
hereto; provided, however, that Purchaser may not assign any of Purchaser's
rights under this Agreement.
8.2 Governing Law; Consent to Jurisdiction.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington. The parties agree that the
exclusive jurisdiction and venue of any action with respect to this Agreement
shall be in the Superior Court of Washington for the County of King or the
United States District Court for the Western District of Washington, in either
case as located in Seattle. Each of the parties hereby submits itself to the
exclusive jurisdiction and venue of such courts for the purpose of such action.
The parties agree that service of process in any such action may be effected in
the manner provided in this Agreement for delivery of notices.
8.3 Notices.
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All notices and other communications under this Agreement
shall be in writing. Unless and until Purchaser is notified in writing to the
contrary, all notices, communications and documents directed to the Company and
related to the Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
Garden Botanika, Inc.
8624 154th Avenue Northeast
Redmond, Washington 98052
Attention: President
Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for Purchaser and related to this
Agreement, if not delivered by hand, shall be mailed to Purchaser's last known
address as shown on the Company's books. Notices and communications shall be
mailed by U.S. registered mail, return receipt requested, postage prepaid. All
mailings and deliveries related to this Agreement shall be deemed delivered, if
mailed, on the third day after they are deposited in the U.S. mail.
8.4 Exhibits.
The exhibits attached to this Agreement are incorporated
herein and form a part of this Agreement.
8.5 Entire Agreement.
This Agreement, together with the Option Agreement, contains
all of the terms and conditions agreed upon by the parties relating to its
subject matter and supersedes any and all prior and contemporaneous agreements,
negotiations, correspondence, understandings and communications of the parties,
whether oral or written, respecting that subject matter.
8.6 Validity of Provisions; Severability.
If any provision of this Agreement is invalid, illegal or
unenforceable in any jurisdiction, the provision shall be adjusted rather than
voided in order to carry out its intent to
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the maximum extent possible, and in all events the remainder of the Agreement
will remain in full force and effect.
8.7 Counterparts.
This Agreement may be signed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GARDEN BOTANIKA, INC.
By _______________________________
Title ____________________________
Purchaser hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement.
________________________________________
Purchaser
Required Exhibits
Exhibit 7A Acknowledgment Regarding Election
Pursuant to Section 83(b)
Exhibit 7B Section 83(b) Election
Optional Exhibits
Exhibit 3 Payment of Purchase Price
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SPOUSAL CONSENT
Purchaser's spouse indicates by the execution of this Agreement his or
her consent to be bound by the terms herein as to his or her interests, whether
as community property or otherwise, if any, in the Shares hereby purchased.
-----------------------------------
Purchaser's Spouse
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EXHIBIT 7A
ACKNOWLEDGMENT AND STATEMENT
OF DECISION REGARDING ELECTION
PURSUANT TO SECTION 83(b) OF
THE INTERNAL REVENUE CODE
The undersigned (which term includes the undersigned's spouse), a
purchaser of ____ shares of Common Stock, par value $.01 per share, of GARDEN
BOTANIKA, INC., a Washington corporation (the "Company") by exercise of an
option, hereby states as follows:
1. The undersigned has carefully reviewed the option and severance
agreement pursuant to which the Option was granted.
2. The undersigned either [check and complete as applicable]:
___ (a) has consulted, and has been fully advised by, the
undersigned's own tax advisor, ______________________, whose business address is
________________________________, regarding the federal, state and local tax
consequences of purchasing shares, and particularly regarding the advisability
of making elections pursuant to Section 83(b) of the Internal Revenue Code (the
"Code") and pursuant to the corresponding provisions, if any, of applicable
state law; or
___ (b) has knowingly chosen not to consult such a tax
advisor.
3. The undersigned hereby states that the undersigned has decided
[check as applicable]:
___ (a) to make an election pursuant to Section 83(b) of the
Code, and is submitting to the Company, together with the undersigned's executed
Stock Purchase Agreement, an executed form entitled "Election Pursuant to
Section 83(b) of the Internal Revenue Code With Respect to Property Acquired by
Exercise of a Stock Option;" or
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___ (b) not to make an election pursuant to Section 83(b) of
the Code.
4. Neither the Company nor any subsidiary or representative of the
Company has made any warranty or representation to the undersigned with respect
to the tax consequences of the undersigned's purchase of shares or of the making
or failure to make an election pursuant to Section 83(b) of the Code or the
corresponding provisions, if any, of applicable state law.
Date: ________________ ____________________________________
Purchaser
Date: ________________ ____________________________________
Purchaser's Spouse
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EXHIBIT 7B
ELECTION PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE WITH RESPECT TO
PROPERTY ACQUIRED BY EXERCISE OF A STOCK OPTION
The undersigned hereby elects pursuant to Section 83(b) of the Internal
Revenue Code (the "Code"), to include in the undersigned's gross income the
excess (if any) of the fair market value of the property described below over
the sum of the amount the undersigned paid for such property. This election is
made to the same effect, and with the same limitations, with respect to the
analogous provisions of Sections 83(b) of the Code under any applicable state
statute.
Pursuant to Treasury Regulations, the following information is
provided:
1. The undersigned's name, address and Social Security Number are:
Name: ______________________________
Address: ______________________________
______________________________
Social Security #: ______________________________
2. The property with respect to which the election is made consists of
___________ shares of Common Stock, par value $.01 per share, of GARDEN
BOTANIKA, INC., a Washington corporation (the "Company").
3. The date on which the above property was transferred to the
undersigned was _____________, 19__, and the taxable year for which this
election is made is 19__.
4. The above property is subject to the following restrictions checked
below:
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___ restrictions as may be imposed by Section 16(b) of the
Securities Exchange Act of 1934, as amended, if any.
___ (other) _______________________________________
5. The fair market value of the above property at the time of transfer
(determined without regard to any lapse restrictions as defined in Treasury
Regulations Section 1.83-3(i)) was $________ per share.
6. The amount paid for the above property by the undersigned was $0.25
per share.
7. Copies of this election have been furnished to the Company and to
the Internal Revenue Service Center to which the undersigned submits his or her
federal income tax return, and a copy will be filed with the income tax return
of the undersigned for the year to which this election relates.
Dated: _________________
___________________________________
Purchaser
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