EXHIBIT 10.59
OPTION #
NAVARRE CORPORATION 2004 STOCK PLAN
NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
You have been granted an option to purchase shares of the Company, subject to
the terms and conditions of the 2004 Stock Plan and the Option Agreement set
forth below, as follows:
Name of Optionee: __________________
Grant Date: April 1, 200___
Total number of Option Shares: 6,000 Shares of Common Stock
Exercise price per share: $________ [Fair Market Value]
Expiration date of option*: April 1, 20__ [six years]
Vesting Schedule: First Exercisable Number of Option Shares
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April 1, 200__ (1st anniversary) 1,200
April 1, 200__ 1,200
April 1, 20___ 1,200
April 1, 20___ 1,200
April 1, 20___ 1,200
* Subject to earlier expiration as provided below.
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NONQUALIFIED STOCK OPTION AGREEMENT
1 GRANT OF OPTION.
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Navarre Corporation, a Minnesota corporation (together with all
successors thereto, the "Company"), hereby grants to the optionee named above
(the "Optionee"), who is a Director of the Company and is not an employee of the
Company, an option (the "Stock Option") to purchase on or prior to the
expiration date specified above, subject to earlier termination as is specified
herein, all or any part of the number of shares indicated above (the " Option
Shares") of the Company's common stock, no par value (the "Common Stock"), at
the per share option exercise price specified above (the "Exercise Price"),
subject to the terms and conditions set forth in this Option Agreement (the
"Agreement") and in the Navarre Corporation 2004 Stock Plan, as amended from
time to time (the "Plan"). This Stock Option is not intended to qualify as an
"incentive stock option" as defined in Section 422(b) of the Internal Revenue
Code of 1986. All capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Plan.
2. ACCEPTANCE.
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Your execution of this Agreement will indicate your acceptance of and
your willingness to be bound by its terms. This Agreement imposes no obligation
upon you to purchase any of the Option Shares. Your obligation to purchase
Option Shares can arise only upon your exercise of this Option in the manner set
forth in Section 4. below. This Option may not be exercised unless you have
executed and returned this Agreement to the Company.
3. WHEN OPTION MAY BE EXERCISED.
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3.1 Vesting Schedule. Subject to the terms and conditions hereof, the Option
shall first become exercisable with respect to the Option Shares in the
installments and on the vesting dates
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specified above (the "Vesting Schedule"). The rights to exercise this Option on
the specified vesting dates shall be cumulative with respect to the Option
Shares becoming exercisable on each such date but in no event shall this Option
be exercisable after, and this Option shall become void and expire as to all
unexercised Option Shares at, 4:00 p.m. (Minneapolis time) on the expiration
date set forth above (the "Expiration Date").
3.2 Termination of Service as a Director. In the event that your service as a
director of the Company ceases for any reason, this Option shall expire and
become void as to all unexercised Option Shares at 4:00 p.m. (Minneapolis time)
on the first anniversary date of the date your service as a director ends,
unless the Expiration Date precedes this anniversary date. Your service as a
director ceases on the earliest of the following: (i) death; (ii) resignation;
(iii) removal by the Shareholders; (iv) disqualification; or (v) the date your
successor is elected and qualifies. Until the forgoing early termination date,
the Vesting Schedule shall continue to apply.
3.3 Change of Control Transaction. For purposes of this Section 3.3, the term
"Change of Control Transaction" shall have the meaning set forth in Section 2.
of the Plan. Upon the occurrence of a Change of Control Transaction, the Vesting
Schedule shall no longer apply and this Option shall automatically and
immediately become exercisable in full. The Committee in its discretion may make
further adjustments or modifications to the Option pursuant to Section 15.4. of
the Plan.
4. HOW OPTION MAY BE EXERCISED.
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4.1 Notice. If exercisable, this Option may be exercised in whole or in part
(but in increments of at least 100 Option Shares) from time to time by a written
notice signed by you, or your legal representative, and delivered to the Company
in person or by mailing it, postage prepaid, certified or registered mail,
return receipt requested, or via nationally recognized overnight courier, to its
principal executive office in New Hope, Minnesota (Attention: Controller),
signifying your election to exercise this Option. The notice must identify this
Option, state the number of Option Shares you are electing to purchase, and
contain a statement by you (in a form acceptable to the Company) that such
shares are being acquired by you for investment and not with a view to their
distribution or resale (unless a registration statement covering the shares
purchasable has been declared effective by the Securities and Exchange
Commission). The Option Exercise Notice attached hereto as Exhibit A may be used
for this purpose. The notice must be accompanied by payment in full pursuant to
Section 5. below of the aggregate Exercise Price for the Option Shares being
purchased.
4.2 Proof of Representation. If notice of the exercise of this option is given
by a person or persons other than you, the Company may require, as a condition
to the exercise of this Option, the submission to the Company of appropriate
proof of the right of such person or persons to exercise this Option.
4.3 Issuance of Shares. Certificates evidencing ownership of the shares of
Common Stock purchased upon any exercise of this Option will be issued as soon
as practicable. If permitted by law and the rules of the applicable stock
exchange, the issuance of shares may be effected on a noncertificated basis. The
Company, however, shall not be required to issue or deliver a certificate for
any shares until it has complied with all requirements of the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, any stock
exchange on which the Company's Common Stock may then be listed and all
applicable state laws in connection with the
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issuance or sale of such shares or the listing of such shares on said exchange.
The Company may cause each certificate evidencing the purchased Common Stock to
be endorsed with one or more legends setting forth the restrictions on transfer
of such Common Stock. Until the issuance of the Option Shares pursuant to this
Agreement and the Plan, you, or such other person as may be entitled to exercise
this option, shall have none of the rights of a shareholder with respect to the
Option Shares.
4.4 Tax Consequences. You acknowledge that there are tax consequences that may
be adverse to you upon the exercise of this Option and/or the disposition of
Option Shares and that you should consult a tax adviser prior to such exercise
or disposition. The Company makes no representations with respect to tax
consequences.
5. PAYMENT FOR OPTION SHARES.
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5.1 How Paid. At the time of exercise, you must deliver consideration to the
Company equal to the product of the Exercise Price and the number of Option
Shares being purchased. Forms of payment acceptable to the Company are: (i)
cash; (ii) a personal check or a certified or bank cashier's check, payable to
the order of the Company; (iii) the tender of shares of Common Stock already
owned by you, provided that such shares were held for the minimum period
required by applicable accounting rules to avoid a charge to the Company's
earnings or were not acquired from the Company as compensation; (iv) a properly
executed "same day sale" commitment between you and a broker/dealer that is a
member of the National Association of Securities Dealers (a "NASD Dealer")
whereby you irrevocably instruct the NASD Dealer to deliver promptly to the
Company the aggregate amount of sale or loan proceeds sufficient to pay the
aggregate Exercise Price in accordance with the regulations of the Federal
Reserve Board; and (v) any combination of the foregoing.
5.2 Payment by Tendering Shares. If paying all or a portion of the aggregate
Exercise Price by tendering previously owned shares, you may satisfy such
delivery by presenting proof of beneficial ownership of such shares rather than
physical delivery. The Company will accept such delivery by attestation as
payment and deduct the same number of shares from the number of Option Shares
issued pursuant to the exercise. Any previously owned shares used for payment
will be valued at Fair Market Value, as defined in Section 2. of the Plan, as of
the day of exercise.
6. TRANSFERABILITY OF OPTION.
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You may not sell, assign, pledge (as loan collateral or otherwise),
encumber (by operation of law or otherwise), or transfer this Option in any
manner, other than by will or the applicable laws of descent or distribution.
During your lifetime, this Option is exercisable only by you or a legal
representative. Any attempt to transfer or encumber this Option or the Option
Shares shall be null and void and shall void this Option.
7. THIS OPTION SUBJECT TO PLAN.
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This Option and the Option Shares granted and issued pursuant to this Agreement
have been granted and issued under, and are subject to the terms of, the Plan.
The terms of the Plan are incorporated by reference herein in their entirety,
and, by execution hereof, you acknowledge having reviewed a copy of the Plan.
The provisions of this Agreement shall be interpreted so as to be consistent
with the Plan, and any ambiguities herein shall be interpreted by reference to
the Plan. In the event that any provision hereof is inconsistent with the terms
of the Plan, the terms of
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the Plan shall prevail. You acknowledge and agree that in the event of any
question or controversy relating to the terms of the Plan or this Agreement, the
decision of the Committee administering the Plan shall be conclusive and final.
A copy of the Plan is contained in the Company's Proxy Statement for the
September 13, 2004 Annual Meeting, has been filed with the Securities and
Exchange Commission and is available from the Company, attention Human
Resources.
8. MISCELLANEOUS.
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8.1 Binding Effect. This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
8.2 Governing Law. This Agreement and all rights and obligations hereunder shall
be construed in accordance with the Plan and governed by the laws of the State
of Minnesota. The parties agree that any action relating to this Agreement may
be brought in the state or federal courts located in Hennepin County, Minnesota
and the parties hereby consent to the jurisdiction of such courts.
8.3 Entire Agreement. This agreement and the Plan set forth the entire agreement
and understanding of the parties hereto with respect to the grant and exercise
of this Option and the administration of the Plan and supersede all prior
agreements, arrangements, plans and understandings relating to the grant and
exercise of this Option and the administration of the Plan.
8.4 Amendment and Waiver. This Agreement may be amended, waived, modified or
canceled by the Committee at any time, provided that all such amendments,
waivers, modifications or cancellations shall comply with and not be prohibited
by the provisions of the Plan, and any amendment, waiver, modification or
cancellation that has a material adverse affect on your rights under this
Agreement shall be with your consent in a written instrument executed by you and
the Company.
Agreed and accepted as of the Grant Date:
NAVARRE CORPORATION OPTIONEE
By
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Its
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EXHIBIT A
NAVARRE CORPORATION
DIRECTOR STOCK OPTION EXERCISE NOTICE
Date: _______________________
Kathy Conlin
Navarre Corporation
7400 49th Avenue North
New Hope, MN 55428
1. EXERCISE OF OPTION. Effective as of this date, the undersigned
("Optionee") hereby elects to purchase _________ shares (the "Shares") of the
Common Stock of Navarre Corporation (the "Company") under and pursuant to the
Navarre Corporation 2004 Stock Plan (the "Plan") and Director Stock Option
Agreement # _____, dated __________________ (the "Option Agreement"). The
aggregate purchase price for the Shares shall be $______________, as required by
the Option Agreement.
2. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the full
purchase price for the Shares in the following form:
____ Check in the amount of $___________;
____ ____________ shares of previously acquired shares having a value
equal to the exercise price (if these shares were issued upon exercise
of an stock option they must have been held for at least six months);
____ Affidavit attesting to ownership of ____________ shares of
previously acquired shares having a value equal to the exercise price
(if these shares were issued upon exercise of an stock option they must
have been held for at least six months); or
____ Broker Exercise Notice (shares will not be delivered to broker
until payment is received from broker). Please fill in your broker
information on the last page.
____ Equity Swap of Shares. Please fill in your broker information
on the last page.
3. ACKNOWLEDGEMENT BY OPTIONEE. In connection with the option exercise,
Optionee acknowledges the following:
i. Optionee has received, read and understood the Plan, the
Option Agreement, and the Company's "Procedures and Guidelines
Governing Insider Trading and Reporting" updated as of January
2005 (the "Insider Trading Policy") and agrees to abide by and
be bound by their terms and conditions.
ii. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee's purchase or disposition
of the Shares. Optionee represents that Optionee has consulted
with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and
that Optionee is not relying on the Company for any tax
advice.
iii. Section 16(b) Compliance.
It is the Optionee's legal obligation to ensure that a Form 4
reporting this exercise is filed before the end of the second
business day following the day on which the exercise is
executed. If Optionee or any member of Optionee's family has
purchased any Shares of the Company on the open market in the
past six months, or if Optionee or any member of Optionee's
family intends to purchase any shares of the Company stock in
the next six months, there may be a Section 16(b) short-swing
profit trading problem if Optionee intends to sell the shares
purchased pursuant to the option in the near future. For
further information, please contact the Company's general
counsel.
6. CERTIFICATION. The following certification is hereby made by
Optionee:
I hereby certify that, in accordance with the Plan, the Option Agreement, and
the Insider Trading Policy, the proposed exercise of options listed above will
not include or lead to the trading of securities of the Company: (i) while I am
in possession of any "material non-public information" concerning the Company
(as defined in the Insider Trading Policy); (ii) during any applicable blackout;
(iii) outside of any applicable trading window; or (iv) in violation of the
trading restrictions of Section 16 of the Securities Exchange Act of 1934 or
Rule 144 under the Securities Act of 1933. I understand that if I trade while
possessing such information or in violation of such trading restrictions, I may
be subject to severe civil and/or criminal penalties, and may be subject to
discipline by the Company up to and including termination for cause.
Submitted by: Accepted by:
OPTIONEE: NAVARRE CORPORATION
By:
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Signature
Its:
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Print Name
Social Security Number
Address:
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If using the "Broker Exercise Notice" -- please fill in your broker information:
Name Phone
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Address
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