Option Certificate and Agreement - Ultrafem Inc. and Gary Nordmann
OPTION CERTIFICATE AND AGREEMENT
This Option Certificate and Agreement ("Certificate"), dated as of
March 8, 1996, certifies that Ultrafem, Inc., a Delaware corporation
("Ultrafem") was granted to GARY NORDMANN (the "Option Holder") an option
("Option") to purchase the following number of shares ("Option Shares") of
Ultrafem's $.001 par value Common Stock (the "Common Stock"). The grant of this
Option is expressly subject to the approval of the Board of Directors of
Ultrafem of the Employment Agreement, presently contemplated to be dated as of
April 1, 1996, between Ultrafem and the Option Holder.
Address of Option Holder: 15 Lloyd Harbor Road
Huntington, NY 11743
Number of Option Shares: 30,000 with an Exercise Price of $10.50
Option Expiration Date: Ten years, except as provided below.
This Option shall become exercisable in installments as follows: 33 1/3% upon
the shipment, on or prior to August 4, 1996, of a quantity of Instead-Registered
Trademark- (as determined by Senior Vice President of Sales and Marketing and
approved by the Chief Executive Officer of Ultrafem) into designated markets;
33 1/3% upon the successful completion (as determined by the Senior Vice
President of Manufacturing and Product Development and approved by the Chief
Executive Officer of Ultrafem) of the building-out (and the implementation of
structure for) Ultrafem's Missoula plant to "full capacity" (defined as two
semi-automated lines and one fully automated line running 3 shifts at an 80%
efficiency rate), including, without limitation, the development of the
following functions/systems: distribution, human resources, customer service,
operating systems, accounts receivable and manufacturing; 33 1/3% upon the
successful development (as determined by the Senior Vice President of
Manufacturing and Product Development and approved by the Chief Executive
Officer of Ultrafem) of the following strategic plans (x) a Master Plan for
completing distribution for the balance of the United States, (y) a Master Plan
for Medical Products, and (z) a Master Plan for International Strategic
Alliances.
Notwithstanding the foregoing, this Option shall become fully vested six (6)
months prior to the expiration of the term of the Employment Agreement, dated as
of April 1, 1996, between Ultrafem and the Option Holder, provided that such
Employment Agreement was not previously terminated by Ultrafem for Due Cause (as
defined therein).
Ultrafem has duly adopted the 1990 Stock Option Plan of Ultrafem, Inc. (the
"Plan"), the terms of which are hereby incorporated by reference. In the case
of any conflict between the provisions hereof and those of the Plan, the
provisions of the Plan shall be controlling. A copy of the Plan will be made
available for inspection during normal business hours at the principal office of
Ultrafem.
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The Option may be exercised only by delivery by registered or certified mail to
Ultrafem at its principal office of (1) written notice, signed by the Option
Holder, of exercise in form and substance identical to Exhibit I attached hereto
stating the number of Option Shares then being purchased; (2) payment of the
aggregate Exercise Price such payment shall be in the form of (A) certified
(unless such certification is waived by Ultrafem) check payable to the order of
Ultrafem, Inc. or cash in the amount of the Exercise Price for such Option
Share; (B) certificates duly endorsed for transfer (with all transfer taxes paid
or provided for) evidencing a number of shares of Common Stock of Ultrafem of
which the aggregate Fair Market Value (as defined below) on the date of exercise
is equal to the aggregate Option Exercise Price of the Option Shares being
purchased, or (C) a combination of these methods of payment; and (3) an executed
investment letter in form and substance substantially identical to Exhibit II
attached hereto. Delivery of said notice and such documentation shall
constitute an irrevocable election of the Option Holder to purchase the Option
Shares specified in said notice, and the date on which Ultrafem receives said
notice and documentation shall be the date as of which the Option Shares so
purchased shall be deemed to have been issued. Ultrafem shall issue and deliver
to the Option Holder a stock certificate or certificates evidencing the Option
Shares so purchased. The term "Fair Market Value" shall mean (i) if the shares
of Common Stock are listed on a registered securities exchange or quoted on the
National Market System, the closing price per share of Common Stock on such date
(or, if there was no trading reported on such date, on the next preceding day on
which there was trading reported); (ii) if the shares of Common Stock are not
listed on a registered securities exchange and not quoted on the National Market
System, but the bid and asked prices per share of Common Stock are provided by
NASDAQ, the National Quotation Bureau Incorporated or any similar organization,
the average of the closing bid and asked price per share of Common Stock on such
date (or, if there was no trading in the shares of Common Stock on such date, on
the next preceding day on which there was trading) as provided by such
organization; and (iii) if the shares of Common Stock are not traded on a
registered securities exchange and not quoted on the National Market System and
the bid and asked price per share of the shares of Common Stock are not provided
by NASDAQ, the National Quotation Bureau Incorporated or any similar
organization, as determined by the Board of Directors of Ultrafem (the "Board")
or a committee thereof in good faith.
The Option Holder agrees not sell, transfer, assign, pledge, hypothecate or
otherwise dispose of any of the Option Shares unless and until all of the
following have occurred: (i) the Option Shares are disposed of pursuant to and
in conformity with an effective registration statement filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Act"), or the Option Holder delivers to Ultrafem a written opinion of counsel,
satisfactory to Ultrafem and its counsel, to the effect that the proposed
disposition is exempt from the registration and prospectus delivery requirements
of that Act; and (ii) the Option Holder delivers to Ultrafem a written opinion
of counsel, satisfactory in form and substance to Ultrafem and its counsel, to
the effect that the proposed disposition will not result in a violation of the
securities laws of any state in the United States. Any attempted transfer and
breach of this paragraph shall be null and void, and of no force or effect
whatsoever.
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Subject to any required action by the stockholders of Ultrafem:
(i) if outstanding shares of Ultrafem's Common Stock (the "Outstanding
Shares") shall be divided into a greater number of Outstanding Shares
or a dividend in shares of Common Stock shall be paid in respect of
shares of Common Stock, the Exercise Price in effect immediately prior
to such subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be proportionately
reduced, and conversely if the Outstanding Shares shall be combined
into a smaller number of Outstanding Shares, the Exercise Price in
effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination, be proportionately
increased;
(ii) when any adjustment is required to be made in the Exercise Price, the
number of Option Shares purchasable upon the exercise of the Option
shall be changed and the number determined by dividing (A) an amount
equal to the number of Option Shares purchasable on the exercise of
the Option immediately prior to such adjustment multiplied by the
Exercise Price in effect immediately prior to such adjustment, by (B)
the Exercise Price in effect immediately after such adjustment;
(iii) in case of any capital reorganization, any reclassification of the
shares of Common Stock (other than a change in par value or as a
result of a stock dividend, subdivision, split up or combination of
shares of Common Stock), or a consolidation or merger of Ultrafem with
another person where Ultrafem is the surviving corporation
(collectively referred to as "Reorganizations"), the Option Holder
shall thereafter be entitled to purchase the kind and number of shares
of stock or other securities or property of Ultrafem receivable upon
such Reorganization by a stockholder holding the number of Option
Shares which the Option entitles the Option Holder to purchase from
Ultrafem prior to such Reorganization; and in any case appropriate
adjustment shall be made in the application of the provisions of this
Certificate to the end that the provisions set forth herein (including
the specified changes and other adjustments to the Exercise Price)
shall thereafter apply to any Option Shares or other property
thereafter purchasable upon exercises of the Option;
(iv) a dissolution or liquidation of Ultrafem, or a merger or consolidation
in which Ultrafem is not the surviving corporation, shall cause the
Option to terminate, except as otherwise provided herein in the event
of a Change of Control (as defined herein). The Option Holder may, in
such event, exercise at any time during a ten-day period ending on the
fifth day prior to such dissolution or liquidation, or merger or
consolidation in which Ultrafem is not the surviving corporation, the
Option in whole or in part; PROVIDED, however, that if such merger or
consolidation is to be consummated in whole or in part by the tender
of shares of Common Stock to the surviving corporation, the Option
Holder agrees to tender the Option Shares received upon exercise of
the Option to the surviving corporation on the
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same terms and subject to the same conditions as are applicable to
other stockholders of Ultrafem who are tendering their shares of
Common Stock;
(v) to the extent that the foregoing adjustments relate to stock or
securities of Ultrafem, such adjustments shall be made by the Board of
Directors of Ultrafem and its determination shall be final, binding
and conclusive;
(vi) the adjustments described in the foregoing paragraphs (i) through (v)
shall constitute the sole and exclusive adjustments to be made to the
Option, or the number of or Exercise Price of the Option Shares, with
respect to any of the events described in those paragraphs; and
(vii) the grant of the Option shall not affect in any way the right or power
of Ultrafem to make adjustments, reclassification, reorganizations or
changes in its capital or business structure, or to merge or
consolidate or to dissolve, liquidate or sell or transfer all or any
part of its business or assets.
For purposes of this Certificate, a "Change in Control" of Ultrafem
occurs if: (a) any "person" (defined as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) other than Audrey Contente is or becomes the beneficial owner, directly
or indirectly, of securities of Ultrafem representing 25% or more of the
combined voting power of Ultrafem's outstanding securities then entitled to vote
for the election of directors; or (b) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors cease for any reason to constitute at least a majority thereof; or (c)
the Board of Directors shall approve the sale of all or substantially all of the
assets of Ultrafem or any merger, consolidation, issuance of securities or
purchase of assets, the result of which would be the occurrence of any event
described in clause (a) or (b) above. In the event of a Change in Control of
Ultrafem, the Board or the Committee (as defined in the Plan), in its
discretion, may determine that, upon the occurrence of a Change in Control, this
Option shall terminate within a specified number of days after notice to the
Option Holder, and such Option Holder shall receive, with respect to each Option
Share subject to this Option, an amount of cash equal to the excess of the fair
market value of such Option Share immediately prior to the occurrence of such
transaction over the Exercise Price per share of this Option. The provisions
contained in the preceding sentence shall be inapplicable if this Option was
granted within six (6) months before the occurrence of a transaction described
above if the Option Holder is a director or officer of Ultrafem or a beneficial
owner of the capital stock of Ultrafem who is described in Section 16(a) of the
Exchange Act, unless such holder dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Code) prior to the expiration of such six-month.
Alternatively, the Board or the Committee may determine, in its discretion, that
this Option shall immediately become exercisable upon a Change in Control.
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Without limiting the application or incorporation by reference of any other
provision of the Plan into this Certificate, the provisions of Section 13 of the
Plan, entitled "Termination of Employment," are hereby incorporated by
reference. In the event that the Option Holder, in accordance with the
provisions of Section 13 of the Plan, would have been able to exercise this
Option for a certain period after the termination of the Option Holder's
employment with Ultrafem, but, on the date of such termination, he is subject
to a lock-up agreement which prohibits any sale of shares of Common Stock held
by him, the vested portion of the Option shall be exercisable for a period of
ninety (90) days after expiration of such lock-up agreement.
Option Holder represents and agrees by signing this Certificate
representing the Option Shares that if he exercises this Option in whole or in
part, he will acquire the Option Shares upon such exercise for the purpose of
investment and not with a view to the resale or distribution of such Option
Shares, except as permitted by applicable securities laws, and that upon each
exercise of the Option he will furnish to Ultrafem, as provided above, a written
statement to such effect. The Option Holder will agree that Ultrafem may place
on each certificate representing the Option Shares an appropriate legend or
legends required by applicable federal and state securities laws.
The Option Holder shall have no rights as a stockholder with respect
to the Option Shares until the date of the issuance of a stock certificate or
stock certificates evidencing the Option Shares to the Option Holder. 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.
Anything in this Agreement to the contrary notwithstanding, in no
event may the Option be exercisable if Ultrafem shall, at any time and in its
sole discretion, determine that (i) the listing, registration or qualification
of any shares otherwise deliverable upon such exercise, upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any regulatory body or the satisfaction of withholding tax or other withholding
liabilities is necessary or desirable in connection with such exercise. In such
event, such exercise shall be held in abeyance and shall not be effective unless
and until such withholding, listing, registration, qualification or approval
shall have been affected or obtained free of any conditions not acceptable to
Ultrafem in its sole discretion, notwithstanding any termination of any Option
or any portion of any Option during the period when exercisability has been
suspended.
This Certificate shall be binding on and shall inure to the benefit of
the parties and their respective successors, assigns, heirs and personal
representatives. This Certificate shall be construed in accordance with the
laws of the State of New York. In the event any action, suit or other
proceedings instituted to interpret or enforce the terms of this Certificate,
the prevailing party shall be entitled to recover all costs, including
reasonable attorneys' fees.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered, or have
caused this Agreement to be executed and delivered by their authorized
representative as of the date above written.
ULTRAFEM, INC.
a Delaware corporation
By:
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Name: John Andersen
Title: Chief Executive Officer
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GARY NORDMANN
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EXHIBIT I
NOTICE OF EXERCISE
(to be signed only upon exercise of the Option)
TO: Ultrafem, Inc.
The undersigned, the holder of the within Option, hereby irrevocably elects
to exercise the purchase right represented by such Option for, and to purchase
thereunder, ____________ shares of the Common Stock of Ultrafem, Inc. and
herewith makes payment of $________ therefor or surrenders the enclosed
certificates of Common Stock duly endorsed for transfer to Ultrafem, Inc.
Dated:
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(Signature must conform in all respects
to name of holder as specified on the
face of the Option)
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Address
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EXHIBIT II
TO: Ultrafem, Inc.
500 Fifth Avenue Suite 3620
New York, NY 10110
Ladies and Gentlemen:
The undersigned understands that the shares of Common Stock ("Shares") of
Ultrafem, Inc., a Delaware corporation (the,"Company") that he has today
purchased, have not been registered under the Securities Act of 1933, as amended
(the "Securities Act").
The undersigned agrees not to sell, transfer, assign, pledge, hypothecate,
or otherwise dispose of any or all of the Shares otherwise than in accordance
with the terms and provisions of that certain Option Certificate and Agreement
dated ______________________, 19__ between the undersigned and Ultrafem, the
provisions of-which-are incorporated by reference herein. The undersigned
agrees that Ultrafem may issue stock transfer instructions to its transfer agent
with respect to the Shares to the effect that there are restrictions on transfer
as described above.
The undersigned understands that there is no market for the Shares and
there may never be a market for the Shares, and that even if a market develops
for the Shares, as a result of the foregoing restrictions on transfer and the
undersigned's representations and warranties hereunder and under aforementioned
Option Certificate and Agreement, the undersigned may never be able to sell or
dispose of the Shares and may thus have to bear the risk of his or her
investment in the Shares for a substantial period of time, or forever.
The undersigned further agrees to indemnify and hold Ultrafem harmless at
all times from and against any and all claims, actions, demands, liabilities,
losses, damages, costs and expenses incurred by Ultrafem as a result of the
sale, transfer, assignment, pledge, hypothecation or other disposition by the
undersigned of any or all of the Shares in violation of this letter, the
aforementioned Option Certificate and Agreement, the Securities Act, or any
other applicable law.
Very truly yours,
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