EXHIBIT 10.27
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is entered into as of April 9, 2001, by and
between TSET, Inc., a Nevada corporation ("TSET"), and Xxxxxxx X. Xxxxxx
("Xxxxxx").
WITNESSETH:
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WHEREAS, TSET desires to grant to Xxxxxx an option to acquire up to
50,000 restricted shares of TSET's common stock, par value $0.001 per share (the
"Option Shares"), in consideration of valuable contributions made by Xxxxxx to
TSET and its wholly-owned subsidiaries; and
WHEREAS, Xxxxxx desires to accept such option.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants, and agreements set forth herein and for other good and
valuable consideration, the delivery, receipt, and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
GRANT OF OPTION. TSET hereby grants to Xxxxxx an option (the "Option")
to acquire the Option Shares at an exercise price of $0.885 per share (the
"Exercise Price"). The Option shall immediately and fully vest in Xxxxxx'x favor
for all purposes upon execution and delivery of this Agreement by the parties.
The Option is personal to Xxxxxx and may be exercised only by Xxxxxx during his
lifetime. The Option shall continue in full force and effect for a period of 5
years from the date hereof (the "Term"), at which time the Option shall expire
and terminate unless previously exercised by Xxxxxx. The Option shall not be
subject to forfeiture and termination, except for Xxxxxx'x failure to exercise
the Option during the Term.
EXERCISE OF OPTION. The Option may be exercised by Xxxxxx, in whole or
in part, at any time during the Term upon receipt by TSET of written notice from
Xxxxxx (the "Exercise Notice"). The Exercise Notice shall specify the number of
Option Shares Xxxxxx desires to acquire pursuant thereto and provide any
necessary or appropriate instructions to TSET and its transfer agent regarding
the denomination of certificates representing the Option Shares and the name in
which the Option Shares should be registered. The exercise of the Option shall
be on a "cashless" basis and Xxxxxx shall not be required to remit to TSET any
payment therefor.
RESERVATION OF THE OPTION SHARES. To ensure fulfillment of its
obligation hereunder should Xxxxxx elect to exercise the Option, TSET shall
reserve from its authorized but unissued capital that number of shares of its
common stock equal to the Option Shares.
RESTRICTIONS ON TRANSFER. Xxxxxx acknowledges that the Option Shares
are subject to certain restrictions upon transfer, and cannot be sold, assigned,
transferred, or conveyed (in any case, a "transfer") except in compliance with
such restrictions and applicable provisions of federal and state securities
laws. Certificates representing the Option Shares shall bear appropriate
restrictive legends and notices. In the event Xxxxxx desires to transfer any
Option Shares prior to the expiration of such restrictions, TSET shall be
entitled to receive from Xxxxxx written undertakings, certifications, or
opinions of legal counsel evidencing compliance with such restrictions.
TAX MATTERS. Xxxxxx acknowledges that treatment of the Option, the
Option Shares, and events or transactions with respect thereto, for federal and
state income and other tax purposes, is dependent upon various factors and
events which are not determined by this Agreement. TSET makes no representations
to Xxxxxx with respect to, and hereby disclaims any and all responsibility as to
such tax treatment. Xxxxxx shall be solely and fully responsible for the payment
of, and shall pay, any and all federal, state, and other taxes (including any
and all withholding taxes) levied with respect to the grant of the Option, the
purchase of the Option Shares, and any subsequent transfer thereof. In the event
the exercise of the Option or the disposition of the Option Shares following
exercise of the Option results in Xxxxxx'x realization of income which for
federal, state, local, or other income tax purposes is, in TSET's opinion,
subject to withholding of tax, then at the election of TSET and prior to the
delivery to Xxxxxx of certificates representing the Option Shares acquired by
him pursuant to an Exercise Notice, (a) Xxxxxx shall pay to TSET an amount equal
to such withholding tax or (b) TSET may withhold such amount from any
compensation or other payments owed by TSET to Xxxxxx.
NONQUALIFIED STATUS. The Option is not intended to be an "incentive
stock option" as defined in the Internal Revenue Code of 1986, as amended, and
shall not be treated as such whether or not, by the terms hereof, it meets the
requirements of any applicable provisions thereof.
NOTICES. All notices or other communications given or made hereunder
shall be in writing and may be delivered personally, by express, registered, or
certified mail (return receipt requested), by special courier, or by facsimile
transmission (to be followed by delivery of a written original notice in the
most expeditious manner possible, as aforesaid), all postage, fees, and charges
prepaid, to TSET and Xxxxxx, as the case may be, to the following addresses
(which may be changed by the parties from time to time upon written notice given
as aforesaid):
To TSET: 000 Xxxxx Xxxxx Xxxxxx, XXX 000
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
Tel: 000.000.0000
Fax: 000.000.0000
To Xxxxxx: 00000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Tel: 000.000.0000
Fax: ___________
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Notices hereunder shall be deemed given when delivered in person, upon
confirmation of successful transmission when sent by facsimile, or 5 days after
being mailed by express, registered, or certified mail (return receipt
requested), postage and fees prepaid.
INTEGRATION, AMENDMENT, AND WAIVER. When executed and delivered, this
Agreement shall constitute the entire agreement between the parties with respect
to the subject matter hereof and shall supersede any and all prior agreements
and understandings with respect thereto. No other agreement, whether oral or
written, shall be used to modify or contradict the provisions hereof unless the
same is in writing, signed by the parties, and states that it is intended to
amend the provisions of this Agreement. No waiver by either party of any breach
of this Agreement in any particular instance shall constitute a waiver of any
other breach hereof in any other circumstance or any relinquishment for the
future of their respective rights to strictly enforce all of the other
provisions hereof or seek all remedies which may be available at law or in
equity.
COUNTERPARTS; BINDING EFFECT. This Agreement may be executed in
multiple counterparts (and by facsimile signature, to be followed by manual
signature), each of which shall be deemed an original, and all of which shall be
deemed to constitute a single agreement. This Agreement shall be binding upon
and inure to the benefit of the parties' respective permitted heirs, successors,
and assigns.
ASSIGNMENT. This Agreement is personal to the parties hereto.
Accordingly, Xxxxxx shall not assign or transfer this Agreement without the
prior written consent of TSET, which consent shall not be unreasonably withheld,
conditioned, or delayed; provided, however, that Xxxxxx shall be permitted to
assign or transfer this Agreement to a legal entity owned by Xxxxxx without such
consent. Any attempted assignment of this Agreement by Xxxxxx without receipt of
such consent from TSET shall be null and void.
SEVERABILITY. If any provision (or portion thereof) of this Agreement
is adjudged unenforceable by a court of competent jurisdiction, the remaining
provisions shall nevertheless continue in full force and effect and the
provision deemed unenforceable shall be remade or interpreted by the parties in
a manner that such provisions shall be enforceable to preserve, to the maximum
extent possible, the original intention and meaning thereof. If necessary to
effect such intent, TSET and Xxxxxx shall negotiate in good faith to amend this
Agreement to replace such provision with language believed in good faith by the
parties to be enforceable, which as closely as possible reflects such intent.
NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole benefit of
the parties and their permitted successors, heirs, and assigns. Nothing herein,
expressed or implied, shall give or be construed to give any other person, other
than the parties and their permitted assigns, any legal or equitable rights
hereunder. No finder's or other fees shall be payable by either party with
respect to the exercise of the Option or the issuance of the Option Shares
pursuant to this Agreement.
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STATE SECURITIES QUALIFICATIONS. The sale of the Option Shares pursuant
to any exercise of the Option has not been qualified with the securities
regulatory authorities in any state or other jurisdiction and the issuance of
the Option Shares prior to such qualification may be unlawful unless such
transactions are exempt from such qualification requirements. The rights of the
parties hereto are expressly conditioned upon such qualification being obtained,
unless any such transaction is so exempt.
GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon, exclusive of its conflicts of
laws principles.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first written above.
TSET, Inc.
By: /S/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
/S/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
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