Exhibit 4.3
CELESTIAL SEASONINGS, INC.
STOCK OPTION AGREEMENT
Agreement made as of the 8th day of July, 1993, between Celestial
Seasonings, Inc., a Delaware corporation (the "Company"), and Ronald V. Davis
("Grantee").
1. Grant of Option. The Company hereby grants to Grantee, as of the grant
date specified above, an option to purchase 10,000 shares of common stock, par
value $0.01 per share (the "Common Stock"), of the Company (which number of
shares may be adjusted pursuant to Paragraph 5 below) at $20 per share, subject
to the terms and conditions set forth herein. This option has already been
adjusted to give effect to the merger of Celestial Holdings, Inc. into the
Company on July 19, 1993, and no further adjustment of this option shall be made
as a result of such merger.
2. Exercise of Option. Subject to the earlier termination of the option as
provided herein, the option may be exercised, by written notice to the Company
in the form attached as Exhibit A hereto, at any time and from time to time
after the date of grant; provided however, unless a Change in Control (as
defined in Section 5) occurs, such option shall not be exercisable for more than
the product of (i) 2-7/9%, multiplied by (ii) the number of full months (up to
36) from the date of this Agreement until the date Grantee ceases to serve as a
director of the Company, multiplied by (iii) the total number of shares covered
hereby. For example, if the date of exercise is between January 8, 1995 and
February 8, 1995, the option may be exercised for 50% of the total number of
shares covered hereby (eighteen months from the date of grant, multiplied by
2-7/9% per month). The option shall not be exercisable in any event after the
expiration of ten years from the date of grant. An option may not be exercised
for a fractional share of Common Stock.
3. Conditions to Exercise. The option may not be exercised by Grantee
unless all of the following conditions are met:
(a) Legal counsel for the Company must be satisfied at the time of
exercise that the issuance of shares of Common Stock upon exercise will be
in compliance with the Securities Act of 1933, as amended (the "Act") and
applicable United States federal, state, local and foreign laws;
(b) Grantee must pay at the time of exercise the full purchase price
for the shares of Common Stock being acquired hereunder, by (i) paying in
United States dollars by cash, (ii) tendering shares of Common Stock owned
by Grantee which have a fair market value equal to the full purchase price
for the shares of Common Stock being acquired, such fair market value to be
determined in such reasonable manner as may be provided from time to time
by the Company or as may be required in order to comply with or conform to
the requirements of any applicable or relevant laws or regulations, (iii)
paying in such other form as the Company may determine in its sole
discretion, or (iv) tendering a combination of the forms of payment
provided for in Subparagraphs 3(b)(i) through 3(b)(iii) above; and
(c) Grantee must, at all times during the period beginning with the
grant date of the option and ending on the date of such exercise, have been
a director of the Company, ex-
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cept (i) if Grantee ceases to be a director by reason of Grantee's
disability Grantee may, at any time within one year of the date of the
onset of such disability (but in no event after the expiration of ten years
from the grant date) exercise the option with respect to the number of
shares, determined under Paragraph 2 above, as to which Grantee could have
exercised the option on the date of the onset of such disability or with
respect to such greater number of shares as determined by the Company in
its sole discretion, and any remaining portion of the option shall be
cancelled by the Company, (ii) if Grantee ceases to be a director by reason
of death, the provisions of Paragraph 4 shall apply, and (iii) if Grantee
ceases to be a director of the Company for reasons other than disability as
described in this Subparagraph 3(c) or death as described in Paragraph 4
below, the option shall be cancelled 30 days after the date Grantee ceased
to be a director.
4. Transferability. The option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of by Grantee, except by will or the
laws of descent and distribution and is exercisable during Grantee's lifetime
only by Grantee. If Grantee or anyone claiming under or through Grantee attempts
to violate this Paragraph 4, such attempt shall be null and void and without
effect, and the Company's obligation to make any further payments (stock or
cash) hereunder shall terminate. If at the time of Grantee's death the option
has not been fully exercised, Grantee's estate or any person who acquires the
right to exercise the option by bequest or inheritance or by reason of Grantee's
death may, at any time within fifteen months after the date of Grantee's death
(but in no event after the expiration of ten years from the grant date),
exercise the option with respect to the number of shares, determined under
Paragraph 2 above, as to which Grantee could have exercised the option at the
time of Grantee's death, or with respect to such greater number of shares as
determined by the Company in its sole discretion. The applicable requirements of
Paragraph 3 above must be satisfied at the time of such exercise.
5. Adjustments. In the event of any change in the number of shares of
Common Stock outstanding by reason of any stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, sale by the Company of all or
part of its assets, distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event occurring after the grant date
specified above and prior to its exercise in full, the number and kind of shares
of Common Stock or other property for which the option may then be exercised and
the option price per share may or may not be adjusted so as to reflect such
change, all as determined by the Company in its sole discretion. In the event of
the proposed dissolution or liquidation of the Company, the option shall
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Company. In the event of a Change in Control, all
restrictions on the option shall lapse and Grantee shall be entitled to the full
benefit of the option immediately prior to the closing of such Change in
Control, and the option shall terminate upon consummation of the Change in
Control, unless otherwise provided by the Company. For purposes of this
Agreement, a Change in Control shall mean a sale of all or substantially all of
the assets of the Company, or the merger of the Company into another
corporation.
6. Withholding of Tax. It shall be a condition to the obligation of the
Company to furnish shares of Common Stock upon exercise of an option (i) that
Grantee (or any person acting under Paragraph 4 above) pay to the Company or its
designee, upon its demand, such amount as may be demanded for the purpose of
satisfying the Company's obligation to withhold federal, state, local or foreign
income, employment or other taxes incurred by reason of the exercise of the
option or the transfer of shares thereupon, and (ii) that Grantee (or any person
acting under Paragraph 4 above)
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provide the Company with any forms, documents or other information reasonably
required by the Company in connection with the grant. If the amount requested
for the purpose of satisfying the withholding obligation is not paid, the
Company may refuse to furnish shares of Common Stock upon exercise of the
option.
7. Amendment or Substitution of Awards. The terms of this Agreement may be
amended from time to time by the Company in its sole discretion in any manner
that it deems appropriate (including, but not limited to, acceleration of the
vesting provisions of the option in Paragraph 2); provided, however, that no
such amendment shall adversely affect in a material manner any right of Grantee
under this Agreement without Grantee's written consent, unless the Company
determines in its sole discretion that there have occurred or are about to occur
significant changes in economic, legislative, regulatory, tax, accounting or
cost/benefit conditions which are determined by the Company in its sole
discretion to have or to be expected to have a substantial effect on the
performance of the Company, or any subsidiary, affiliates, division, or
department thereof.
8. Administration. Any action taken or decision made by the Company, its
board of directors, or its delegates arising out of or in connection with the
construction, administration, interpretation or effect of the Agreement shall
lie within its sole and absolute discretion, as the case may be, and shall be
final, conclusive and binding on Grantee and all persons claiming under or
through Grantee.
9. No Rights as Stockholder. Unless and until a certificate or certificates
representing such shares of Common Stock shall have been issued to Grantee (or
any person acting under Paragraph 4 above), Grantee shall not be or have any of
the rights or privileges of a stockholder of the Company with respect to shares
of Common Stock acquirable upon exercise of the option. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued to Grantee.
10. Investment Representation. Grantee hereby acknowledges that the shares
of Common Stock which Grantee may acquire by exercising the option shall be
acquired for investment without a view to distribution, within the meaning of
the Act, and shall not be sold, transferred, assigned, pledged or hypothecated
in the absence of an effective registration statement for the shares under the
Act and applicable state securities laws or an applicable exemption from the
registration requirements of the Act and any applicable state securities laws.
Grantee also agrees that the shares of Common Stock which Grantee may acquire by
exercising the option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state.
11. Registration of Common Stock. The Company, in its discretion, may
postpone the issuance and/or delivery of shares of Common Stock upon any
exercise of the option until completion of such registration or other
qualification of such shares under any state and/or federal law, rule or
regulation as the Company may consider appropriate.
12. Notices. Any notice hereunder to the Company shall be addressed to:
Celestial Seasonings, Inc., 4600 Sleepytime Drive, Boulder, Colorado 80301,
Attention: Secretary, and any notice hereunder to Grantee shall be addressed to
Grantee at Grantee's last address on the records of the Company, subject to the
right of either party to designate at any time hereafter in writing some
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other address. Any notice shall be deemed to have been duly given when delivered
personally, by facsimile (receipt verified) or enclosed in a properly sealed
envelope, addressed as set forth above, and deposited (with first class postage
prepaid) in the United States mail.
13. Counterparts. This Agreement may be executed in one or several
counterparts, each of which shall constitute one and the same instrument.
14. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Grantee.
15. Governing Law. The validity, construction, interpretation,
administration and effect of this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Colorado.
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IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as
of the date first above written.
CELESTIAL SEASONINGS, INC.
By: _________________________________________
Philip B. Livingston
Vice President and Chief
Financial Officer
GRANTEE
______________________________________________
Ronald V. Davis
______________________________________________
Social Security Number
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EXHIBIT A
Form of Letter to be Used on
Exercise of Stock Option
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Date
Celestial Seasonings, Inc.
4600 Sleepytime Drive
Boulder, Colorado 80301
Attention: General Counsel
Dear Sir:
I wish to exercise the stock option granted on July 8, 1993 and evidenced
by my Option Agreement dated as of July 8, 1993 to the extent of ________ shares
of the Common Stock of Celestial Seasonings, Inc., at the option price of $20
per share. My check in the amount of $________ in payment of the entire purchase
price for these shares accompanies this letter.
Please issue a certificate for these shares in the following name:
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Name
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Street Address
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City/State/Zip
Very truly yours,
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Ronald V. Davis
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Social Security Number
