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EXHIBIT 4.4
INTERVISUAL BOOKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement") between INTERVISUAL BOOKS, INC., a
California corporation (the "Company"), and JEFFREY NOBBS ("Optionee") is
entered into as of the 25th day of March, 1999.
RECITALS
A. In connection with Optionee's performance of his duties as an
independent contractor of the Company, the Company has agreed to grant to
Optionee this option to purchase shares of the Company's common stock.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant. The Company hereby grants to Optionee the right to
purchase up to 75,000 shares of common stock of the Company at a price of $1.25
per share (which price equals the fair market value of the Company's common
stock as of the date of this Agreement), on the terms and conditions set forth
herein. This option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code, as amended, and is not made
pursuant to any Company stock option plan. Optionee agrees that Optionee and any
other person who may be entitled hereunder to exercise this option shall be
bound by all terms and conditions of this Agreement.
2. Exercisability. The option granted herein shall become
exercisable at the following times and in the following amounts:
The option shall become exercisable in cumulative increments
of 25,000 shares on each of (a) January 1, 2000, (b) January
1, 2001, and (c) January 1, 2002. The option granted hereunder
shall lapse and expire on the seventh (7th) anniversary of the
date hereof.
If Optionee does not purchase the full number of
shares he is entitled to purchase in any one year, the right to purchase such
shares carries over to the subsequent years during the term of this option.
Notwithstanding the other provisions contained herein, this Option shall
terminate upon the sooner of (i) seven years from the date hereof, or (ii)
termination of Optionee's consulting engagement for cause.
Notwithstanding the foregoing, this option shall
automatically become fully exercisable upon a "Change in Control of the
Company," as such term is defined below.
For purposes of this Agreement, a "Change in Control
of the Company" shall be deemed to have occurred if:
(a) the shareholders of the Company approve a definitive
agreement to sell, transfer, or otherwise dispose of all or substantially all of
the Company's assets and properties; or
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(b) any "person" (as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934), other than the Company or any
"person" who as of the date this Agreement is a director or officer of the
Company (including any trust of such director or officer), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the combined voting power of the Company's then
outstanding securities; provided, however, that the following shall not
constitute a "Change in Control" of the Company:
(i) any acquisition directly from the Company
(excluding any acquisition resulting from the exercise of a conversion
or exchange privilege in respect of outstanding convertible or
exchangeable securities);
(ii) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(iii) upon the death of any person who as of the date
of this Agreement is a director or officer of the Company, the transfer
(A) by testamentary disposition or the laws of intestate succession to
the estate or the legal beneficiaries or heirs of such person, or (B)
by the provisions of any trust to the beneficiaries thereof of the
securities of the Company beneficially owned by such director or
officer of the Company; or
(c) the shareholders of the Company approve the dissolution or
liquidation of the Company or a definitive agreement to merge or consolidate the
Company with or into another entity in which the Company is not the continuing
or surviving corporation or pursuant to which any shares of the Company's stock
would be converted into cash, securities or other property of another entity,
other than a merger of the Company in which holders of the Company's common
stock immediately prior to the merger have the same proportionate ownership of
common stock (or equivalent securities) of the surviving entity immediately
after the merger as immediately before.
3. Exercise. This option may be exercised on the terms and
conditions contained herein by giving ten (10) days' prior written notice of
exercise to the Company, specifying the number of shares to be purchased and the
price to be paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock previously held by the Optionee valued at "Fair Market
Value".
For the purposes of this Agreement, "Fair Market
Value" as of a certain date (the "Determination Date") means: (a) the closing
price of a share of the Company's common stock on the principal exchange on
which shares of the Company's common stock are then trading, if any, on the
Determination Date, or, if shares were not traded on the Determination Date,
then on the nearest preceding trading day during which a sale occurred; or (b)
if such stock is not traded on an exchange but is quoted on NASDAQ or a
successor quotation system, (i) the last sales price (if the stock is then
listed as a National Market Issue under The Nasdaq National Market System) or
(ii) the mean between the closing representative bid and asked prices (in all
other cases) for the stock on the Determination Date as reported by NASDAQ or
such successor quotation system; or (c) if such stock is not publicly traded on
an exchange and not quoted on NASDAQ or a successor quotation system, the mean
between the closing bid and asked prices for the stock, on the Determination
Date, as determined in good faith by the Board; or (d) if the Company's stock is
not publicly traded, the fair market value established in good faith by the
Board.
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4. Termination of Engagement.
(a) Termination for Cause. If Optionee's consulting
engagement is terminated by the Company for "cause" (as determined by the
Company's Board of Directors), neither Optionee nor his estate shall be entitled
to exercise this option after the date of such termination.
(b) Death or Incapacity. If Optionee's consulting
engagement is terminated for death or "incapacity" (as determined by the
Company's Board of Directors), Optionee or Optionee's estate, as the case may
be, shall have the right for six (6) months following the date of termination to
exercise this option, but only to the extent that this option was exercisable on
such date of termination.
(c) Other. If Optionee's consulting engagement is
terminated for any reason other than as set forth in Sections 4(a) and (b)
above, Optionee shall have ninety (90) days following the date of termination to
exercise this option, but only to the extent that this option was exercisable on
such date of termination.
5. Transferability. This option shall be transferable only by
will or by the law of descent and distribution to the estate (or other personal
representative) of Optionee and shall be exercisable during Optionee's lifetime
only by him. Except as otherwise provided herein, any attempt at alienation,
assignment, pledge, hypothecation, transfer, sale, attachment, execution or
similar process, whether voluntary or involuntary, with respect to all or any
part of this option or any right under this Agreement, shall be null and void
and, at the Company's option, shall cause Optionee's rights under this Agreement
to terminate.
6. Withholding Requirements. In the event the Company
determines that it is required to withhold state or Federal income taxes as a
result of the exercise of this option, Optionee shall be required, as a
condition to the exercise hereof, to make arrangements satisfactory to the
Company to enable it to satisfy such withholding requirements.
7. Rights as a Stockholder. Optionee, or any permitted
transferee of Optionee, shall have no rights as a stockholder with respect to
any shares covered by this option until the date of the issuance of a stock
certificate for such shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 8 of this Agreement. This
Agreement shall not confer upon Optionee any right of continued engagement by
the Company or interfere in any way with the Company's right to terminate
Optionee's engagement with the Company.
8. Recapitalization. Subject to any required action by
stockholders, the number of shares of Common Stock covered by this option and
the exercise price thereof shall be proportionately adjusted for any increase or
decrease in the number of issued shares of common stock resulting from a
subdivision or consolidation of such shares or the payment of a stock dividend
(but only of common stock) or any other increase or decrease in the number of
issued shares of common stock effected without receipt of consideration by the
Company. Subject to any required action by stockholders, if the Company is the
surviving corporation in any merger or consolidation, this option shall pertain
and apply to the securities to which a holder of the number of shares of common
stock subject to the option would have been entitled.
The foregoing adjustments shall be made by the
Company's Board of Directors, whose determination shall be conclusive and
binding on the Company and Optionee.
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Except as expressly provided in this Section 8,
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class, or by reason
of any dissolution, liquidation, merger, consolidation or spin-off of assets or
stock of another corporation, and any issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number of shares subject to this option or the exercise price thereof.
This option shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.
9. Securities Act and Other Regulatory Requirements. This
option is not exercisable, in whole or in part, and the Company is not obligated
to sell any shares of the Company's common stock subject to this option, if such
exercise or sale, in the opinion of counsel for the Company, would violate the
Securities Act of 1933 (or any other federal or state statutes having similar
requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may
require as a condition of issuance of any shares under this option that Optionee
furnish a written representation that he is acquiring the shares for investment
and not with a view to distribution to the public. The certificate evidencing
any shares issued pursuant to this option shall bear such restrictive legends as
required by federal or state law.
Further, the Board of Directors of the Company may
decide, in its sole discretion, that the listing or qualification of the shares
of stock subject to the option under any securities exchange requirements or
under any applicable law is necessary or desirable. If such a decision is made,
this option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions that are not acceptable to the Board of Directors of the
Company.
10. Effect of Exercise. Upon the exercise of all or any part
of this option, the number of shares of common stock subject to the option under
this Agreement shall be reduced by the number of shares with respect to which
such exercise is made.
11. Right of First Refusal. If Optionee desires to transfer
any shares of common stock which he has acquired pursuant to the exercise of the
option granted herein ("Shares"), Optionee shall deliver to the Company written
notice of his intention to transfer such Shares (the "Notice") together with
either a copy of a signed and binding offer by the proposed transferee (a
"Negotiated Sale") or a statement that such Shares are to be sold into the
public market at Fair Market Value at the time of sale (a "Market Sale"). The
Notice for a Negotiated Sale shall state the name and address of the proposed
transferee, the number of Shares to be transferred, the price per Share, and the
other terms of such transfer. The Notice for a Market Sale shall state the
expected date of the proposed sale and the number of Shares to be sold. For
thirty (30) days following delivery of the Notice, the Company shall have the
option to purchase all (but not less than all) of the Shares proposed to be sold
by Optionee at the price and terms stated in the Notice. In the event of a
Market Sale, such purchase price shall be the Fair Market Value of the Shares on
the day the Company exercises its option, less five (5) percent. Such option
shall be exercisable by delivery of written notice to Optionee within such
thirty (30) day period. Any Shares not purchased by the Company may, for a
period of sixty (60) days commencing on the expiration of the Company's option
to purchase such Shares, be sold to the proposed transferee at the price and
upon the terms specified in the Notice. Shares which are not transferred by
Optionee within such sixty (60) day
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period shall again become subject to the notice and option provisions of this
Section 11. The certificate evidencing any shares issued pursuant to this option
shall bear a restrictive legend stating that such shares are subject to the
right of first refusal set forth in this Section 11.
12. Notices. Any notice or other communication required or
permitted hereunder or by law shall be validly given or made only if in writing
and delivered in person to an officer or duly authorized representative of the
other party, or deposited in the United States mail, duly certified or
registered, return receipt requested, postage prepaid, and addressed to the
party to whom intended. If sent to the Company, it shall be addressed in care of
the President, 2850 Ocean Park Boulevard, Suite 225, Santa Monica, California
90405, and if sent to Optionee, it shall be addressed to Optionee's address on
file with the Company on the date of such notice. If sent by mail, notice shall
be deemed given two days after deposit of such notice in the mail and in
accordance with this section. Any party may from time to time, by written notice
to the other, designate a different address for notice which shall be
substituted for that specified above.
13. Choice of Law; Counterparts. This Agreement, and all
rights and obligations hereunder, shall be governed by the laws of the State of
California. This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
14. Successor. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs,
beneficiaries, executors and administrators.
15. Paragraph Headings; Employment. Paragraph headings are for
convenience only and are not part of the context. This Agreement shall not
obligate the Company or any affiliate to engage Optionee for any period of time
nor does this Agreement constitute a contract or agreement for employment.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first written above.
INTERVISUAL BOOKS, INC.
By: /s/ Waldo H. Hunt
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Name: Waldo H. Hunt
Title: Chairman of the Board
OPTIONEE:
/s/ Jeffrey Nobbs
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Jeffrey Nobbs
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