EXHIBIT 10.3
BAYCORP HOLDINGS, LTD.
NON-STATUTORY STOCK OPTION AGREEMENT
1. Grant of Option. BayCorp Holdings, Ltd., a New Hampshire corporation
(the "Company"), hereby grants to Xxxxxxx X. Xxxxxxxxxxxx (the "Optionee") an
option, pursuant to the Company's 2001 Non-Statutory Stock Option Plan (the
"Plan"), to purchase an aggregate of 18,080 shares of Common Stock ("Common
Stock") of the Company at a price of $14.45 per share, purchasable as set
forth in and subject to the terms and conditions of this option and the Plan.
Except where the context otherwise requires, the term "Company" shall include
the parent and all present and future subsidiaries of the Company as defined
in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as
amended or replaced from time to time (the "Code").
2. Non-Statutory Stock Option. This option is not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
(a) Exercise Period. Except as otherwise provided in this Agreement,
this option may be exercised prior to the seventh anniversary of the date of
grant (hereinafter the "Expiration Date") in installments as to not more than
the number of shares set forth in the table below during the respective
installment periods set forth in the table below.
Number of
Shares as to which
Exercise Period Option is Exercisable
On or after April 28, 2004 12,500
On or after April 28, 2005 18,080
The right of exercise shall be cumulative so that if the option is not
exercised to the maximum extent permissible during any exercise period, it
shall be exercisable, in whole or in part, with respect to all shares not so
purchased at any time prior to the Expiration Date or the earlier termination
of this option. This option may not be exercised at any time on or after the
Expiration Date, except as otherwise provided in Section 3(e) below.
(b) Exercise Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee's delivery of
written notice of exercise to the Treasurer of the Company, specifying the
number of shares to be purchased and the purchase price to be paid therefor
and accompanied by payment in full in accordance with Section 4. Such
exercise shall be effective upon receipt by the Treasurer of the Company of
such written notice together with the required payment. The Optionee may
purchase less than the number of shares covered hereby, provided that no
partial exercise of this option may be for any fractional share or for fewer
than ten whole shares.
(c) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company (an "Eligible
Optionee").
(d) Termination of Relationship with the Company. If the Optionee
ceases to be an Eligible Optionee for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall
terminate 12 months after such cessation (but in no event after the
Expiration Date), provided that this option shall be exercisable only to the
extent that the Optionee was entitled to exercise this option on the date of
such cessation. Notwithstanding the foregoing, if the Optionee, prior to the
Expiration Date, materially violates the non-competition or confidentiality
provisions of any employment contract, confidentiality and nondisclosure
agreement or other agreement between the Optionee and the Company, the right
to exercise this option shall terminate immediately upon written notice to
the Optionee from the Company describing such violation.
(e) Exercise Period Upon Death or Disability. If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Expiration Date while he or she is an Eligible Optionee, or if the
Optionee dies within three months after the Optionee ceases to be an Eligible
Optionee (other than as the result of a termination of such relationship by
the Company for "cause" as specified in paragraph (f) below), this option
shall be exercisable, within the period of 12 months following the date of
death or disability of the Optionee (whether or not such exercise occurs
before the Expiration Date), by the Optionee or by the person to whom this
option is transferred by will or the laws of descent and distribution,
provide that this option shall be exercisable only to the extent that this
option was exercisable by the Optionee on the date of his or her death or
disability. Except as otherwise indicated by the context, the term
"Optionee", as used in this option, shall be deemed to include the estate of
the Optionee or any person who acquires the right to exercise this option by
bequest or inheritance or otherwise by reason of the death of the Optionee.
(f) Discharge for Cause. If the Optionee, prior to the Expiration
Date, is discharged by the Company for "cause" (as defined below), the right
to exercise this option shall terminate immediately upon such cessation of
employment. "Cause" shall mean willful misconduct by the Optionee or willful
failure to perform his or her responsibilities in the best interests of the
Company (including, without limitation, breach by the Optionee of any
provision of any employment, consulting, advisory, nondisclosure, non-
competition or other similar agreement between the Optionee and the Company),
as determined by the Company, which determination shall be conclusive. The
Optionee shall be considered to have been discharged "for cause" if the
Company determines, within 30 days after the Optionee's resignation, that
discharge for cause was warranted.
4. Payment of Purchase Price.
(a) Method of Payment. Payment of the purchase price for shares
purchased upon exercise of this option shall be made (i) by delivery to the
Company of cash or a check to the order of the Company in an amount equal to
the purchase price of such shares, (ii) subject to the consent of the
Company, by delivery to the Company of shares of Common Stock of the Company
then owned by the Optionee having a fair market value equal in amount to the
purchase price of such shares, (iii) by any other means which the Board of
Directors determines are consistent with the purpose of the Plan and with
applicable laws and regulations (including, without limitation, the
provisions of Rule 16b-3 under the Securities Exchange Act of 1934 and
Regulation T promulgated by the Federal Reserve Board), or (iv) by any
combination of such methods of payment.
(b) Valuation of Shares or Other Non-Cash Consideration Tendered in
Payment of Purchase Price. For the purposes hereof, the fair market value of
any share of the Company's Common Stock or other non-cash consideration which
may be delivered to the Company in exercise of this option shall be
determined in good faith by the Board of Directors of the Company.
(c) Delivery of Shares Tendered in Payment of Purchase Price. If the
Optionee exercises this option by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of Common
Stock of the Company to be delivered shall be duly executed in blank by the
Optionee or shall be accompanied by a stock power duly executed in blank
suitable for purposes of transferring such shares to the Company. Fractional
shares of Common Stock of the Company will not be accepted in payment of the
purchase price of shares acquired upon exercise of this option.
(d) Restrictions on Use of Option Stock. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in
payment of the purchase price of shares purchased upon exercise of this
option if the shares to be so tendered were acquired within twelve (12)
months before the date of such tender, through the exercise of an option
granted under the Plan or any other stock option or restricted stock plan of
the Company.
5. Delivery of Shares; Compliance With Securities Laws, Etc.
(a) General. The Company shall, upon payment of the option price for
the number of shares purchased and paid for, make prompt delivery of such
shares to the Optionee, provided that if any law or regulation requires the
Company to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action.
(b) Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is
necessary as a condition of, or in connection with, the issuance or purchase
of shares hereunder, this option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval,
disclosure or satisfaction of such other condition shall have been effected
or obtained on terms acceptable to the Board of Directors. Nothing herein
shall be deemed to require the Company to apply for, effect or obtain such
listing, registration, qualification or disclosure, or to satisfy such other
condition.
6. Nontransferability of Option. This option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) nor shall any such rights
be subject to execution, attachment or similar process, except that this
option may be transferred (i) by will or the laws of descent and distribution
or (ii) pursuant to a qualified domestic relations order as defined in
Section 414(p) of the Code. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions hereof, or upon the levy of any attachment or similar process
upon this option or such rights, this option and such rights shall, at the
election of the Company, become null and void.
7. No Special Employment or Similar Rights. Nothing contained in the
Plan or this option shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment or other
relationship of the Optionee with the Company for the period within which
this option may be exercised.
8 Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends
or non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
(a) General. If, through or as a result of any merger, consolidation,
sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction, (i) the outstanding
shares of Common Stock are increased or decreased or are exchanged for a
different number or kind of shares or other securities of the Company, or
(ii) additional shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to such shares
of Common Stock or other securities, the Optionee shall, with respect to this
option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 14(a) of
the Plan.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 9 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued pursuant to this
option on account of any such adjustments.
10. Mergers, Consolidation, Distributions, Liquidations Etc. In the
event of a merger or consolidation or sale of all or substantially all of the
assets of the Company in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or in the event of a liquidation of the Company, prior to
the Expiration Date or termination of this option, the Optionee shall, with
respect to this option or any unexercised portion hereof, be entitled to the
rights and benefits, and be subject to the limitations, set forth in Section
15(a) of the Plan.
11. Withholding Taxes. The Company's obligation to deliver shares upon
the exercise of this option shall be subject to the Optionee's satisfaction
of all applicable federal, state and local income and employment tax
withholding requirements.
12. Investment Representations; Legends.
(a) Representations. The Optionee represents, warrants and covenants
that:
(i) Any shares purchased upon exercise of this option shall be
acquired for the Optionee's account for investment only, and not with a view
to, or for sale in connection with, any distribution of the shares in
violation of the Securities Act of 1933 (the "Securities Act"), or any rule
or regulation under the Securities Act.
(ii) The Optionee has had such opportunity as he or she has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Optionee to evaluate the merits and risks of his or
her investment in the Company.
(iii) The Optionee is able to bear the economic risk of holding
such shares acquired pursuant to the exercise of this option for an
indefinite period.
(iv) The Optionee understands that (A) the shares acquired
pursuant to the exercise of this option will not be registered under the
Securities Act and are "restricted securities" within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (C) in
any event, an exemption from registration under Rule 144 or otherwise under
the Securities Act not be available for at least two years and even then will
not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public,
and other terms and conditions of Rule 144 are complied with; and (D) there
is now no registration statement on file with the Securities and Exchange
Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register any shares acquired pursuant to
the exercise of this option under the Securities Act.
(v) The Optionee agrees that, if the Company offers any of its
Common Stock for sale pursuant to a registration statement under the
Securities Act, the Optionee will not, without the prior written consent of
the Company, offer, sell, contract to sell or otherwise dispose of, directly
or indirectly (a "Disposition"), any shares purchased upon exercise of this
option for a period of 90 days after the effective date of such registration
statement.
By making payment upon exercise of this option, the Optionee shall be deemed
to have reaffirmed, as of the date of such payment, the representations made
in this Section 12.
(b) Legends on Stock Certificate. All stock certificates representing
shares of Common Stock issued to the Optionee upon exercise of this option
shall have affixed thereto legends substantially in the following forms, in
addition to any other legends required by applicable state law;
"The shares of stock represented by this certificate
may not be transferred, sold or otherwise disposed of
in the absence of an effective registration statement
with respect to the shares evidenced by this
certificate, filed and made effective under the
Securities Act of 1933, or an opinion of counsel
satisfactory to the Company to the effect that
registration under such Act is not required."
"The shares of stock represented by this certificate
are subject to certain restrictions on transfer
contained in an Option Agreement, a copy of which
will be furnished upon request by the issuer."
13. Miscellaneous.
(a) Except as provided herein, this option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and
the Optionee.
(b) All notices under this option shall be mailed or delivered by hand
to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in -writing by either of
the parties to one another.
(c) This option shall be governed by and construed in accordance with
the laws of the State of New Hampshire.
Date of Grant: BAYCORP HOLDINGS, LTD.
April 28, 2003
By: /s/ Xxxxx X. Xxxxxx Xx.
---------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: President
Address: One Xxx Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of
a copy of the Company's 2001 Non-Statutory Stock Option Plan.
OPTIONEE
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Address: 00 Xxx Xxxx Xxxx Xxxx
Xxxxxx, XX 00000
