Solomon Technologies, Inc. February 5, 2007 (Date of Grant) Stock Option Agreement
Solomon
Technologies, Inc.
February
5, 2007
(Date
of Grant)
Solomon
Technologies, Inc., a Delaware corporation (the “Company”), hereby grants to
Xxxx X. Xxxxxx (the “Optionee”) an option to purchase shares of its Common
Stock, par value $0.001 per share (the “Common Stock”), subject to the
following:
1.
Grant
of Option.
The
Company hereby grants to the Optionee the option to purchase from the Company
upon the terms and conditions hereinafter set forth 500,000 shares of Common
Stock (the “Option Shares”) at a purchase price of two dollars eighty cents
($2.80) per share (the “Option”). The date of grant of this Option is February
5, 2007 (“Date of Grant”).
2. Relationship
to Plan.
This
Option is granted outside the Company’s Amended and Restated 2003 Stock Option
Plan. This Option is not intended to meet the requirements of Section 422 of
the
Internal Revenue Code of 1986, as amended (the “Code”).
3. Option
Term.
The
term of the Option and of this Option Agreement (the "Option Term") shall
commence on the Date of Grant set forth above and, unless the Option is
previously terminated pursuant to Section 5 below, shall terminate upon the
tenth (10th)
anniversary of the Date of Grant (the "Expiration Date"). As of the Expiration
Date, all rights of the Optionee hereunder shall terminate.
4. Conditions
of Exercise.
(a) Subject
to Section 5 below, the Option shall become vested as to 33.33% of the Option
Shares on each of the first anniversary of the Date of Grant and the second
anniversary of the Date of Grant and as to 33.34% of the Option Shares on the
third anniversary of the Date of Grant.
(b) Prior
to
the Expiration Date, this Option may be exercised in whole or in part at any
time as to Option Shares that have vested; provided
that in
the event the Optionee’s employment with the Company or any parent corporation
or subsidiary corporation (as such terms are defined in Section 422 of the
Code)
terminates, from and after such termination, this Option may be exercised only
to the extent set forth in Section 5 below. This Option may not be exercised
for
a fraction of a share.
5. Termination
of Employment.
(a) If
the
employment of the Optionee by, or the services of the Optionee as a director
of,
or consultant or advisor to, the Company or a subsidiary corporation of the
Company shall be terminated for Cause (as defined in that certain employment
letter agreement between the Company and the Optionee dated January 31, 2007)
then the vested and unvested portions of this Option shall terminate forthwith.
Except as set forth in subsection (d) of this Section 5, if such employment
or
services shall be terminated for any reason other than for Cause, then the
Option shall thereupon become vested as to 50% of the Option Shares that would
have vested within 12 months after the date of such termination but for such
termination, and the remaining non-vested portion of this Option shall terminate
forthwith. Except as provided in subsections (b) and (c) of this Section 5,
if
such employment or services shall terminate for any reason other than for Cause,
then this Option may be exercised at any time within six (6) months after such
termination, subject to the provisions of Section 5(e) below. For purposes
of
this subsection (a), if the Optionee leaves the employ or services of the
Company to become an employee or non-employee director of, or a consultant
or
advisor to, a subsidiary corporation of the Company or a corporation (or
subsidiary or parent corporation of the corporation) that has assumed the Awards
(as defined in the Plan) of the Company as a result of a corporate
reorganization or the like, the Optionee shall not be considered to have
terminated his or her employment or services.
(b) If
the
Optionee dies (i) while employed by, or while serving as a non-employee director
of or a consultant or advisor to, the Company or a subsidiary corporation of
the
Company, or (ii) within three (3) months after the termination of his or her
employment or services, then this Option may, subject to the provisions of
Section 5(e) below, be exercised by the estate of the Optionee, or by a person
who acquired the right to exercise this Option by bequest or inheritance or
by
reason of the death of the Optionee, at any time within one (1) year after
such
death.
(c) If
the
Optionee ceases employment or services because of (i) permanent and total
disability (within the meaning of Section 22(e)(3) of the Code) while employed
by, or while serving as a non-employee director for or consultant or advisor
to,
the Company or a subsidiary corporation of the Company, or (ii) retirement
pursuant to a pension or retirement plan adopted by the Company or at the normal
retirement date prescribed from time to time by the Company, then this Option
may, subject to the provisions of Section 5(e) below, be exercised at any time
within one (1) year after the Optionee’s termination of employment, termination
of directorship or termination of consulting or advisory services, as the case
may be, due to the disability or retirement.
(d) If
the
Company undergoes a “change of control”, which for purposes of this Option shall
mean a sale of all the outstanding Common Stock to an unrelated third party
or a
sale of all or substantially all of the assets of the Company, the unvested
portion of this Option shall become immediately vested. If after the Optionee’s
first year of employment with the Company the Optionee’s employment terminates
as a result of the Optionee’s death, any unvested portion of this Option shall
become fully vested upon such termination.
(e) This
Option may not be exercised except to the extent that the Optionee was entitled
to exercise the Option at the time of termination of employment or services,
or
death, and in any event may not be exercised after the Expiration
Date.
6. Methods
of Exercise.
This
Option shall be exercisable by a written notice in the form adopted by the
Board
of Directors of the Company (the “Board”) or the Compensation Committee of the
Board (the “Committee”) that specifies the number of shares to be purchased. The
notice shall be accompanied by payment of the full amount of the option price
(i) by cash or check payable to the Company, (ii) by the delivery to
the Company of shares of the Company’s stock having a value equal to the
exercise price, or (iii) by a combination of the foregoing. Upon receipt of
such payment, the Company will thereafter deliver or cause to be delivered
to
the Optionee (or if any other individual or individuals are exercising this
Option, to such individual or individuals) at the office of the Company, a
certificate or certificates for the number of shares with respect to which
this
Option is being exercised, registered in the name or names of the individual
or
individuals exercising the option; provided, however, that if any law or
regulation or order of the Securities and Exchange Commission or other body
having jurisdiction in the premises shall require the Company or Optionee (or
other individual or individuals exercising this Option) to take any action
in
connection with the shares being purchased, the delivery of the certificate
or
certificates for such shares shall be delayed until such action has been
taken.
2
7. Purchase
For Investment.
This
Option is granted on the condition that the purchase of shares of Common Stock
hereunder shall be for the account of the Optionee (or other individual or
individuals exercising this Option) for investment purposes and not with a
view
to the resale or distribution thereof, except that such condition shall be
inoperative if the offering and sale of shares subject to the Option is
registered under the Securities Act of 1933, as amended, or if in the opinion
of
counsel for the Company such shares may be resold without registration. At
the
time of any exercise of the Option, the Optionee (or other individual or
individuals exercising this Option) will execute such further agreements as
the
Company may require to implement the foregoing condition and to acknowledge
the
Optionee’s (or such other individual’s) familiarity with restrictions on the
resale of the shares under applicable securities laws.
8. Nontransferability
of Option.
This
Option shall not be transferable by the Optionee otherwise than by will or
the
laws of descent or distribution, and this Option shall be exercisable during
the
Optionee’s lifetime only by him or her.
9. Adjustment
Upon Change in Capitalization.
(a)
In
the event that the Company’s outstanding Common Stock is hereafter changed by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, reverse split, stock
dividend or the like, an appropriate adjustment shall be made by the Board
of
Directors or the Committee in the number of shares and exercise price per share
subject to the Option. If the Company shall be reorganized, consolidated, or
merged with another corporation, the holder of the Option shall be entitled
to
receive upon the exercise of the Option the same number and kind of shares
of
stock or the same amount of property, cash or securities as he would have been
entitled to receive upon the happening of any such corporate event as if he
had
been, immediately prior to such event, the holder of the number of shares
covered by the Option.
(b)
Any
adjustment in the number of shares shall apply proportionately to only the
unexercised portion of the Option. If fractions of a share would result from
any
such adjustment, the adjustment shall be revised to the next lower whole number
of shares.
10. Listing
of Option Shares.
The
Company shall not be obligated to deliver the Option Shares until they have
been
listed on each securities exchange or market on which the Common Stock may
then
be listed or until there has been qualification under or compliance with such
federal or state laws, rules or regulations as the Company may deem
applicable.
11. Not
a
Contract of Employment.
Nothing
contained in this Option Agreement shall be deemed to confer upon the Optionee
any right to remain in the employ or service of the Company or a subsidiary
corporation of the Company or any entitlement to any remuneration or other
benefit pursuant to any consulting or advisory arrangement.
12. Governing
Law and Interpretation.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware. It shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns and legal
representatives.
13. Miscellaneous.
The
Optionee shall have no rights as a stockholder with respect to the shares
subject to this Option until the exercise of the Option and the issuance of
a
stock certificate for the shares with respect to which the Option shall have
been exercised. Nothing herein contained shall impose any obligation on the
Company or the Optionee with respect to the Optionee’s employment by the
Company. Nothing herein contained shall impose any obligation upon the Optionee
to exercise the Option.
3
IN
WITNESS WHEREOF, the Company and the Optionee have caused this Option Agreement
to be executed on the date first above written.
| SOLOMON TECHNOLOGIES, INC. | |||
| By: | /s/ Xxxx X. Xxxxxxxxx | ||
| Name: | Xxxx X. Xxxxxxxxx | ||
| Title: | Chairman | ||
| OPTIONEE | |||
| /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx | |||
4
Solomon
Technologies, Inc.
February
5, 2007
(Date
of Grant)
Solomon
Technologies, Inc., a Delaware corporation (the “Company”), hereby grants to
Xxxx X. Xxxxxx (the “Optionee”) an option to purchase shares of its Common
Stock, par value $0.001 per share (the “Common Stock”), subject to the
following:
1. Grant
of Option.
The
Company hereby grants to the Optionee the option to purchase from the Company
upon the terms and conditions hereinafter set forth 250,000 shares of Common
Stock (the “Option Shares”) at a purchase price of two dollars eighty cents
($2.80) per share (the “Option”). The date of grant of this Option is February
5, 2007 (“Date of Grant”).
2. Relationship
to Plan.
This
Option is granted outside the Company’s Amended and Restated 2003 Stock Option
Plan. This Option is not intended to meet the requirements of Section 422
of the
Internal Revenue Code of 1986, as amended (the “Code”).
3. Option
Term.
The
term of the Option and of this Option Agreement (the "Option Term") shall
commence on the Date of Grant set forth above and, unless the Option is
previously terminated pursuant to Section 5 below, shall terminate upon the
tenth (10th)
anniversary of the Date of Grant (the "Expiration Date"). As of the Expiration
Date, all rights of the Optionee hereunder shall terminate.
4.
Conditions
of Exercise.
(a) Subject
to Section 5 below, the Option shall become vested as to 100% of the Option
Shares if, as finally determined upon completion of the audit of the Company’s
financial statements for the year ending December 31, 2007 (the “2007 Audit”),
the Company achieves both of the following goals: (i) annualized sales of
$25
million by the end of 2007, calculated by taking the cumulative monthly sales
for the fourth quarter of 2007 and multiplying by four, and (ii) breakeven
annualized cash flow by the end of 2007, calculated by adding together the
monthly cash flows for the last two (2) months of 2007.
(b) Prior
to
the Expiration Date, this Option may be exercised in whole or in part at
any
time as to Option Shares that have vested; provided
that in
the event the Optionee’s employment with the Company or any parent corporation
or subsidiary corporation (as such terms are defined in Section 422 of the
Code)
terminates, from and after such termination, this Option may be exercised
only
to the extent set forth in Section 5 below. This Option may not be exercised
for
a fraction of a share.
5. Termination
of Employment.
(a) If
the
employment of the Optionee by, or the services of the Optionee as a director
of,
or consultant or advisor to, the Company or a subsidiary corporation of the
Company shall be terminated for Cause (as defined in that certain employment
letter agreement between the Company and the Optionee dated January 31, 2007)
this Option shall terminate forthwith. If such employment or services are
terminated without cause prior to completion of the 2007 Audit, then, only
for
purposes of this Option and the Plan, termination of Optionee’s employment shall
be deemed tolled until the completion of the 2007 Audit, whereupon this Option
shall either (A) vest in accordance with Section 4 above (in which event
it
shall be deemed to have vested upon the date of termination of employment)
or
(B) terminate. Except as provided in subsections (b), (c) and (d) of this
Section 5, if such employment or services shall be terminated for any reason
other than for Cause, then this Option may be exercised at any time within
six
(6) months after such termination, subject to the provisions of Section 5(e)
below. For purposes of this subsection (a), if the Optionee leaves the employ
or
services of the Company to become an employee or non-employee director of,
or a
consultant or advisor to, a subsidiary corporation of the Company or a
corporation (or subsidiary or parent corporation of the corporation) that
has
assumed the Awards (as defined in the Plan) of the Company as a result of
a
corporate reorganization or the like, the Optionee shall not be considered
to
have terminated his or her employment or services.
(b) If
the
Optionee dies (i) while employed by, or while serving as a non-employee director
of or a consultant or advisor to, the Company or a subsidiary corporation
of the
Company, or (ii) within three (3) months after the termination of his or
her
employment or services, then this Option may, subject to the provisions of
Section 5(e) below, be exercised by the estate of the Optionee, or by a person
who acquired the right to exercise this Option by bequest or inheritance
or by
reason of the death of the Optionee, at any time within one (1) year after
such
death.
(c) If
the
Optionee ceases employment or services because of (i) permanent and total
disability (within the meaning of Section 22(e)(3) of the Code) while employed
by, or while serving as a non-employee director for or consultant or advisor
to,
the Company or a subsidiary corporation of the Company, or (ii) retirement
pursuant to a pension or retirement plan adopted by the Company or at the
normal
retirement date prescribed from time to time by the Company, then this Option
may, subject to the provisions of Section 5(e) below, be exercised at any
time
within one (1) year after the Optionee’s termination of employment, termination
of directorship or termination of consulting or advisory services, as the
case
may be, due to the disability or retirement.
(d) If
(i)
the Company undergoes a “change of control”, which for purposes of this Option
shall mean a sale of all the outstanding Common Stock to an unrelated third
party or a sale of all or substantially all of the assets of the Company,
or
(ii) the Optionee’s employment terminates as a result of the Optionee’s death,
then this Option shall terminate forthwith; provided
however,
that if
such change of control or death occurs after December 31, 2007 and prior
to
completion of the 2007 Audit, termination of this Option, and, in the case
of
the Optionee’s death, termination of Optionee’s employment for purposes of this
Option and the Plan, shall be tolled until the completion of the 2007 Audit,
whereupon this Option shall either (A) vest in accordance with Section 4
above
(in which event it shall be deemed to have vested upon such change of control
or
death) or (B) terminate.
(e) This
Option may not be exercised except to the extent that the Optionee was (or
by
the terms hereof is deemed to have been) entitled to exercise the Option
at the
time of termination of employment or services, or death, and in any event
may
not be exercised after the Expiration Date.
6. Methods
of Exercise.
This
Option shall be exercisable by a written notice in the form adopted by the
Board
of Directors of the Company (the “Board”) or the Compensation Committee of the
Board (the “Committee”) that specifies the number of shares to be purchased. The
notice shall be accompanied by payment of the full amount of the option price
(i) by cash or check payable to the Company, (ii) by the delivery to
the Company of shares of the Company’s stock having a value equal to the
exercise price, or (iii) by a combination of the foregoing. Upon receipt of
such payment, the Company will thereafter deliver or cause to be delivered
to
the Optionee (or if any other individual or individuals are exercising this
Option, to such individual or individuals) at the office of the Company,
a
certificate or certificates for the number of shares with respect to which
this
Option is being exercised, registered in the name or names of the individual
or
individuals exercising the option; provided, however, that if any law or
regulation or order of the Securities and Exchange Commission or other body
having jurisdiction in the premises shall require the Company or Optionee
(or
other individual or individuals exercising this Option) to take any action
in
connection with the shares being purchased, the delivery of the certificate
or
certificates for such shares shall be delayed until such action has been
taken.
2
7. Purchase
For Investment.
This
Option is granted on the condition that the purchase of shares of Common
Stock
hereunder shall be for the account of the Optionee (or other individual or
individuals exercising this Option) for investment purposes and not with
a view
to the resale or distribution thereof, except that such condition shall be
inoperative if the offering and sale of shares subject to the Option is
registered under the Securities Act of 1933, as amended, or if in the opinion
of
counsel for the Company such shares may be resold without registration. At
the
time of any exercise of the Option, the Optionee (or other individual or
individuals exercising this Option) will execute such further agreements
as the
Company may require to implement the foregoing condition and to acknowledge
the
Optionee’s (or such other individual’s) familiarity with restrictions on the
resale of the shares under applicable securities laws.
8. Nontransferability
of Option.
This
Option shall not be transferable by the Optionee otherwise than by will or
the
laws of descent or distribution, and this Option shall be exercisable during
the
Optionee’s lifetime only by him or her.
9. Adjustment
Upon Change in Capitalization.
(a)
In
the event that the Company’s outstanding Common Stock is hereafter changed by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, reverse split, stock
dividend or the like, an appropriate adjustment shall be made by the Board
of
Directors or the Committee in the number of shares and exercise price per
share
subject to the Option. If the Company shall be reorganized, consolidated,
or
merged with another corporation, the holder of the Option shall be entitled
to
receive upon the exercise of the Option the same number and kind of shares
of
stock or the same amount of property, cash or securities as he would have
been
entitled to receive upon the happening of any such corporate event as if
he had
been, immediately prior to such event, the holder of the number of shares
covered by the Option.
(b)
Any
adjustment in the number of shares shall apply proportionately to only the
unexercised portion of the Option. If fractions of a share would result from
any
such adjustment, the adjustment shall be revised to the next lower whole
number
of shares.
10. Listing
of Option Shares.
The
Company shall not be obligated to deliver the Option Shares until they have
been
listed on each securities exchange or market on which the Common Stock may
then
be listed or until there has been qualification under or compliance with
such
federal or state laws, rules or regulations as the Company may deem
applicable.
3
11. Not
a
Contract of Employment.
Nothing
contained in this Option Agreement shall be deemed to confer upon the Optionee
any right to remain in the employ or service of the Company or a subsidiary
corporation of the Company or any entitlement to any remuneration or other
benefit pursuant to any consulting or advisory arrangement.
12. Governing
Law and Interpretation.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware. It shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns and legal
representatives.
13. Miscellaneous.
The
Optionee shall have no rights as a stockholder with respect to the shares
subject to this Option until the exercise of the Option and the issuance
of a
stock certificate for the shares with respect to which the Option shall have
been exercised. Nothing herein contained shall impose any obligation on the
Company or the Optionee with respect to the Optionee’s employment by the
Company. Nothing herein contained shall impose any obligation upon the Optionee
to exercise the option.
[Signature
page follows.]
4
IN
WITNESS WHEREOF, the Company and the Optionee have caused this agreement
to be
executed on the date first above written.
| SOLOMON TECHNOLOGIES, INC. | |||
| By: | /s/ Xxxx X. Xxxxxxxxx | ||
| Name: | Xxxx X. Xxxxxxxxx | ||
| Title: | Chairman | ||
| OPTIONEE | |||
| /s/ Xxxx X. Xxxxxx | |||
|
Xxxx
X. Xxxxxx
|
|||
5
