EXHIBIT 10.34
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of July
1, 2003 by and between Xxxxxx X. "Xxxxxx" Xxxxx (the "Executive") and Avatech
Solutions, Inc., a Delaware corporation ("Avatech").
EXPLANATORY STATEMENT
Executive has served as the Chief Executive Officer of Avatech since
December 2, 2002, and Avatech desires to continue to employ Executive, and
Executive desires to perform services for Avatech and to be employed as
Avatech's Chief Executive Officer on the terms and conditions set forth herein.
Both parties wish to terminate their obligations under an Employment Agreement
between Avatech and Executive dated December 2, 2002 and replace that Agreement
with this Agreement.
Now, therefore, in consideration of the Explanatory Statement, which is
incorporated by reference herein, the mutual covenants, agreements,
representations and warranties herein set forth, and other good and valuable
consideration, the adequacy and sufficiency of which are hereby acknowledged,
the parties hereto do hereby agree as follows:
Section 1. Employment and Duties. From and after July 1, 2003 (the
"Commencement Date"), Avatech shall employ Executive as the Chief Executive
Officer of Avatech. Executive shall perform such duties as may be assigned to
him from time to time by the Board of Directors of Avatech (the "Board"), and
shall report directly to the Board. Executive shall use his best efforts on a
full time basis (at least 40 hours per week) in the performance of his duties on
behalf of Avatech.
Section 2. Compensation and Benefits.
2.1. Salary. Executive's base annual salary ("Base Salary") shall be
two hundred and twelve thousand dollars ($212,000), payable in accordance with
Avatech's customary payroll policies in force at the time of payment.
2.2. Incentive Compensation and Bonuses. Prior to the end of each of
Avatech's fiscal quarters, the Compensation Committee of the Board of Directors
of Avatech shall determine an amount of cash incentive compensation and a stated
performance measure ("Performance Goal") for the next following fiscal quarter.
Such cash incentive compensation shall be paid to Executive after the close of
the fiscal quarter if the Executive has met the Performance Goal for that fiscal
quarter, in accordance with Avatech's customary payroll policies in force at the
time of payment.
2.3. Annual Review. Commencing with July 1, 2003, and on each July 1
thereafter, the Board shall conduct an annual performance review of Executive
and, at that time, consider increases in Executive's base compensation.
2.4. Stock Options and Incentive Stock Grants. Avatech shall grant to
Executive options to purchase 100,000 shares of Avatech's Common Stock under
Avatech's Incentive Stock Option Plan, subject to the terms and conditions
contained in the Stock Option attached hereto as Annex A. In addition, Avatech
shall award to Executive 50,000 shares of common stock, pursuant to Avatech's
Restricted Stock Award Plan, subject to the terms and conditions contained in
the Restricted Stock Award attached hereto as Annex B.
2.5. Benefits. Executive shall be entitled to participate in Avatech's
standard benefits provided to other management level employees of Avatech, as
established or modified by Avatech from time to time, including but not limited
to life insurance, health insurance, and dental insurance, to the extent not
provided to Executive from another business or corporation.
2.6. Vacation. Executive shall be entitled to four calendar weeks of
vacation during each fiscal year of Avatech, which vacation weeks shall not
accrue if they are not used.
2.7. Business Expenses. Pursuant to Avatech's customary policies in
force at the time of payment, Executive shall be promptly reimbursed, against
presentation of vouchers or receipts, for all authorized expenses properly
incurred by him in the performance of his duties hereunder.
Section 3. Term and Termination.
3.1. Term. This Agreement shall have a term beginning on the
Commencement Date and ending on the date of a Termination for Cause (as defined
in Section 3.2) or the date of a Termination Other than for Cause (as defined
and described in Section 3.3), whichever shall first occur.
3.2. Termination for Cause. Executive shall be entitled to payment of
his Base Salary earned, accrued bonus earned (if any), and benefits existing at
the time of termination of his employment if such termination is a Termination
for Cause. "Termination for Cause" means (except as described in section 3.4)
one or more of: (a) voluntary termination of employment by Executive for any
reason; (b) death of Executive; (c) Executive having been unable to render
services required of him hereunder for a consecutive period of six months or for
any period in the aggregate of six months in any twelve month period because of
a serious and continuing health impairment, which impairment will most likely
result in Executive's continued inability to render the services required of him
hereunder; (d) Executive's misappropriation of corporate funds; (e) Executive's
conviction of a felony; (f) Executive's conviction of any crime involving theft,
dishonesty, or moral turpitude; (g) Executive's failure to devote substantially
his full business time and attention to Avatech as provided in Section 1 hereof;
(h) Executive's willful violation of directions of the Board of Directors of
Avatech which are consistent with Executive's duties as Chief Executive Officer;
(i) material misrepresentation made by Executive to Avatech; (j) verifiable
evidence that Executive has engaged in sexual harassment of a nature that could
give rise to liability on the part of Avatech; and (k) the commission by
Executive of a material breach of the terms of this Agreement.
3.3. Termination Other Than for Cause. If Executive's employment with
Avatech is terminated and such termination is not a Termination for Cause,
Executive shall be
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entitled to payment of his Base Salary and other benefits existing at the time
of such termination for a period of twelve months thereafter, with all such
payments to be made periodically pursuant to Avatech's policies in force at the
time of payment, provided, however, that Avatech shall not be obligated to
continue any benefit if the plan or policy under which such benefit is provided
limits the provision of the benefit to full-time employees of Avatech, or if the
validity of the plan or policy would be adversely impacted by the continuation
of the benefit.
3.4. Change in Control. If, upon a Change in Control, Executive is
either terminated or elects to resign, such termination shall be treated as a
termination under Section 3.3. As used in this Agreement, "Change in Control"
shall mean (a) a dissolution or liquidation of Avatech; (b) a merger of
consolidation in which Avatech is not the surviving corporation or the party to
the merger or consolidation whose shareholders do not own 50% or more of the
voting stock of the resulting corporation; or (c) the acquisition of more than
50% of the outstanding voting stock of Avatech by any person, or group of
persons acting in concert, in a single transaction or series of transactions.
Section 4. Confidential Information.
4.1. Definition of Confidential Information. For purposes of this
Agreement, the term "Confidential Information" means that secret, proprietary
information of Avatech not otherwise publicly disclosed (whether or not
discovered or developed by Executive) and known by Executive as a consequence of
Executive's employment with Avatech or as a consequence of Executive's position
as a director of Avatech. Without limiting the generality of the foregoing, such
proprietary information shall include information not generally known in the
industry or related industries which concerns customer lists; computer programs
and routines; the identity of specialized consultants and contractors and
confidential information developed by them for Avatech; operating and other cost
data, including information regarding salaries and benefits of employees; cost
and pricing data; acquisition, expansion, marketing, financial, strategic, and
other business plans; Avatech manuals, files, records, memoranda, plans,
drawings and designs, specifications and computer programs and records; and all
information that is a "trade secret" as defined in the Uniform Trade Secrets
Act.
4.2. Confidential Information. During Executive's employment with
Avatech, Executive shall have access to and become familiar with Confidential
Information of Avatech. Executive acknowledges that such Confidential
Information is owned and shall continue to be owned solely by Avatech. During
the term of Executive's employment with Avatech and after termination of such
employment for any reason, Executive shall not use or divulge Confidential
Information to any person or entity other than Avatech, or persons to whom
Avatech has given its written consent, unless such information has become
publicly available and is not longer Confidential Information.
4.3. Return of Documents. Upon termination of Executive's employment
with Avatech for any reason, all procedural manuals, guides, specifications,
plans, drawings, designs, records, lists, notebooks, software, diskettes,
customer lists, pricing documentation and other property which is or contains
Confidential Information, including all copies thereof, in the possession or
control of Executive, whether prepared by Executive or others, shall be
forthwith delivered by Executive to Avatech.
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Section 5. Covenants Not to Compete.
5.1. Restrictive Covenant. Avatech and Executive agree and acknowledge
that Avatech has legitimate business interests to support the restrictive
covenants set forth hereinafter, including, but not limited to, trade secrets,
Confidential Information that otherwise does not qualify as trade secrets, and
Executive's substantial relationships with prospective or existing customers.
Executive covenants and agrees that during Executive's employment with Avatech
and for a period of one year following Executive's cessation of employment for
any reason, Executive shall not in any manner start or join any business which,
as of or after the date of this Agreement, enters into a line of business or is
engaged in a line of business that is a line of business conducted by Avatech.
This Section 5.1 shall prevent Executive, directly or indirectly,
on Executive's own behalf or as an executive, officer, employee, agent,
director, partner, consultant, lender, or advisor, from forming, owning,
joining, controlling, financing, or otherwise participating in the ownership or
management of or being otherwise affiliated with any person or entity engaged in
the type of business prohibited by this Section. Executive shall not permit any
person or entity (other than Avatech) of which Executive is a shareholder,
partner or director, or in which Executive has an ownership interest, to engage
in any type of business prohibited by this Section. Notwithstanding any other
provision herein to the contrary, the parties agree that Executive may invest
Executive's personal, private assets as a passive investor in not more than one
percent of the total outstanding shares of any publicly traded company engaged
in a competing business, so long as Executive does not participate in the
management or operations of such company.
5.2. Solicitation of Employees. During the one-year period following
Executive's cessation of employment for any reason, Executive shall not, without
the prior written approval of the Chairman of the Board of Directors of Avatech,
directly or indirectly solicit, raid, entice, or induce any person who is, or
was at any time within six months prior to such cessation, an employee of
Avatech, to become employed by any other person, firm, or corporation in any
business which is in any manner in competition with Avatech. Furthermore,
Executive shall inform Avatech in writing if any other person employed by
Avatech contacts Executive for the purpose of seeking employment during such one
year period.
5.3. New Developments. Executive agrees that, with respect to his work
for Avatech, any developments made by Executive or under Executive's direction
in connection with the work of Avatech shall be the sole and absolute property
of Avatech, and that any and all copyrights, patent rights, and other
proprietary rights therein shall belong to Avatech. Executive shall cooperate
with Avatech and execute any documents prepared by Avatech to secure or protect
any such rights.
6. Representations of Executive. Executive hereby represents and warrants
that he has the unrestricted right to accept employment with Avatech on the
terms and conditions set forth herein and to execute and perform this Agreement
without being in conflict with any other agreement, obligation or understanding
with any third party. Executive represents that he is not bound by any agreement
or by any other existing or previous business relationship which
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conflicts with, or may conflict with, the performance of his obligations
hereunder, or prevent the full performance of his duties and obligations
hereunder.
Section 7. Miscellaneous.
7.1 Notices. Any notice permitted or required to be given under this
Agreement shall be sufficient if in writing and delivered personally or by
certified mail, return receipt requested, if to Executive, to Xx. Xxxxxx X.
Xxxxx at his residence address as reflected in Avatech's payroll records, and if
to Avatech, to the attention of Mr. W. Xxxxx Xxxxxxx, at Avatech's principal
corporate office address. A party may change his or its address for receipt of
notices by complying with this Section.
7.2. Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
7.3. Amendment; Waiver. This Agreement may not be amended,
supplemented, canceled or discharged except by a written instrument executed by
the party affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.
7.4. Binding Effect; Assignment. The rights and obligations set forth
in this Agreement shall bind and inure to the benefit of any successor of
Avatech by reorganization, merger or consolidation, or any assignee of all or
substantially all of Avatech's business and properties. Executive's rights or
obligations hereunder may not be assigned by Executive, except that upon
Executive's death, all rights to compensation hereunder shall pass to
Executive's executor or administrator.
7.5. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
7.6. Governing Law; Interpretation. This Agreement shall be construed
in accordance with, and governed by, the laws of the State of Maryland and, to
the extent it involves any United States statute, by the laws of the United
States.
7.7. Further Assurances. Each of the parties agrees to execute,
acknowledge, deliver and perform, or caused to be executed, acknowledged,
delivered and performed, at any time and from time to time, all such further
acts, documents, transfers, conveyances, or assurances as may be necessary or
appropriate to carry out the provisions or intent of this Agreement.
7.8. Severability. If any one or more of the terms, provisions,
covenants, or restriction contained in this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
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In witness whereof, the parties hereto have entered into this Agreement as
of the day and year first above written.
Avatech Solutions, Inc.
By: /s/
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W. Xxxxx Xxxxxxx, Chairman
/s/
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Xxxxxx X. "Scotty" Xxxxx
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Neither the securities represented by this Option nor the shares of common
stock issuable upon exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state; therefore, the transfer of this Option or the
shares of common stock issuable upon exercise hereof is subject to
compliance with the conditions specified below, and no such transfer of
this Option or such shares shall be valid until such conditions have been
fulfilled.
EXHIBIT A
AVATECH SOLUTIONS, INC.
STOCK OPTION
This Stock Option is granted by Avatech Solutions, Inc., a Delaware
corporation, to Xxxxxx X. "Scotty" Xxxxx effective as of July 30, 2003.
EXPLANATORY STATEMENT
The Optionee is the Chief Executive Officer of the Company and as such is
important to the Company's continued success. In exchange for the Optionee's
continued services, pursuant to an Employment Agreement between the Optionee and
the Company dated as of July 1, 2003, the Board of Directors of the Company has
determined to grant to the Optionee an option, pursuant to the Company's 2002
Stock Option Plan, to purchase one hundred thousand (100,000) shares of the
Company's common stock, par value $.01 per share, on the terms and conditions
set forth in this Stock Option, and at an exercise price of $0.35 per share
which price the Board has determined to be the fair market value of the Common
Stock as of the Grant Date.
Now, therefore, to evidence the grant of the option and to set forth the
terms and conditions governing the exercise thereof and the parties' other
agreements relative thereto, Optionee and the Company agree as follows:
Section 1. Definitions.
1.1. "Aggregate Exercise Price" at any give time means the Exercise
Price multiplied by the number of Option Shares with respect to which the Option
is being exercised at that time.
1.2. "Board" means the Company's board of directors.
1.3. "Committee" means the compensation committee of the Board.
1.4. "Common Stock" means the common stock of the Company, par value
$.01 per share.
1.5. "Company" means Avatech Solutions, Inc., a Delaware corporation.
ANNEX A: STOCK OPTION
1.6. "Disability" means a physical or mental disease, injury, or
infirmity that prevents the Optionee from performing the substantial duties of
his or her position with the Company for a period of one hundred eighty (180)
consecutive days as certified by a physician designated by or acceptable to the
Board or the Committee.
1.7. "Employment" means employment by the Company or any of its
subsidiaries.
1.8. "Employment Agreement" means an Employment Agreement between the
Optionee and the Company dated as of July 1, 2003.
1.9. "Exercise Price" means $0.35 per share.
1.10. "Expiration Date" means 5:00 p.m. Baltimore time on the 10th
anniversary of the Grant date.
1.11. "Fair Market Value" on a given date means:
(a) if the Common Stock is listed on a national securities
exchange, the mean between the highest and lowest sale prices reported as having
occurred on the primary exchange with which the Stock is listed and traded on
the date prior to such date, or, if there is no such sale on that date, then on
the last preceding date on which such a sale was reported;
(b) if the Common Stock is not listed on any national securities
exchange but is quoted in the National Market System of the National Association
of Securities Dealers Automated Quotation System on a last sale basis, the
average between the high bid price and low ask price reported on the date prior
to such date, or, if there is no such sale on that date, then on the last
preceding date on which a sale was reported; or
(c) If the Common Stock is not listed on a national securities
exchange nor quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System on a last sale basis, the amount
determined by the Committee to be the fair market value based upon a good faith
attempt to value the Stock accurately and computed in accordance with applicable
regulations of the Internal Revenue Service; or
(d) in the event of a Change in Control (as defined in the Plan)
which results in receipt of value by the stockholders, then the same amount
received by the stockholders.
1.12. "Grant Date" means the effective date of this Option written
above.
1.13. "Mature Stock" means shares of stock which are mature for
purposes of generally accepted accounting principles, i.e., that the shares:
(a) have been held by the Optionee free and clear for at least
six months prior to the use thereof to pay part of an Option exercise price;
(b) have been purchased by the Optionee on the open market; or
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ANNEX A: STOCK OPTION
(c) meet any other requirements for "mature" shares as may exist
on the date of the use of the shares to pay part of an Option exercise price.
1.14. "Option" means this Stock Option granted by the Company to the
Optionee.
1.15. "Option Shares" means the shares common stock that the Optionee
will receive on exercise of this Option, as may be adjusted from time to time
pursuant to the terms of this Option. Initially and before any adjustments, the
Optionee may purchase the number of Option Shares granted by the Company in
Section 2.
1.16. "Optionee" means Xxxxxx X. "Xxxxxx" Xxxxx or his heirs or
assigns, as permitted by the Plan and the terms and conditions of this Option.
1.17. "Plan" means the Avatech Solutions, Inc. 2002 Stock Option Plan.
1.18. "Reorganization Event" means means (a) a dissolution or
liquidation of Avatech; (b) a merger of consolidation in which Avatech is not
the surviving corporation or the party to the merger or consolidation whose
shareholders do not own 50% or more of the voting stock of the resulting
corporation; or (c) the acquisition of more than 50% of the outstanding voting
stock of Avatech by any person, or group of persons acting in concert, in a
single transaction or series of transactions. Neither the subdivision or
combination of the authorized shares of Common Stock into a greater or lesser
number of shares of Common Stock (whether with or without par value) nor any
financing transaction will be deemed a Reorganization Event.
1.19. "Retire," "Retirement" means the Optionee's termination of
employment at or after his "normal retirement date" as defined in the Company's
Retirement Savings Plan (or any successor plan).
1.20. "Termination for Cause," "Cause" means (a) Optionee's
misappropriation of corporate funds; (b) Optionee's conviction of a felony; (c)
Optionee's conviction of any crime involving theft, dishonesty, or moral
turpitude; (d) Optionee's failure to devote substantially his full business time
and attention to Avatech as provided in Section 1 hereof; (e) Optionee's willful
violation of directions of the Board of Directors of Avatech which are
consistent with Optionee's duties as Chief Executive Officer; (f) falsification
of any material representation made by Optionee to Avatech; (g) verifiable
evidence that Optionee has engaged in sexual harassment of a nature that could
give rise to liability on the part of Avatech; and (g) the commission by
Optionee of a material breach of the terms of the Employment Agreement or any
successor employment agreement between Optionee and the Company.
1.21. "Transfer" means the assignment, hypothecation, sale, transfer,
or other encumbrance or disposal, either voluntarily or by operation of law
(whether by virtue of execution, attachment or similar process), of all or any
part of the Optionee's rights under this Option.
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ANNEX A: STOCK OPTION
Section 2. Grant, Term, and Vesting of Option.
2.1. In General. The Company hereby grants to the Optionee the right,
and the Optionee shall be entitled, to purchase from the Company ("Exercise") at
any time and from time to time after the Grant date but in no event later than
the Expiration Date, up to one hundred thousand (100,000) shares of Common Stock
at the Exercise Price on the terms and subject to the conditions hereinafter set
forth.
2.2. Right to Exercise.
2.2.1. In General. Except as otherwise set forth (and subject to
all of the other conditions and limitations contained) in this Section 2, this
Option shall be immediately exercisable beginning on July 1, 2009.
2.2.2. Accelerated Vesting Provisions. On or after the occurrence
of one (but not both) of the following ("Incentive Targets"):
(a) PLM Revenue Target. the close of any calendar quarter
next following the date on which the Company's revenues from sales of Product
Lifecycle Management (PLM) products reach three million dollars ($3,000,000),
provided that such date is on or before December 31, 2004; or
(b) Operating Income Target. June 30, 2004, provided that
the Company receives four hundred and thirty-six thousand, five hundred dollars
($436,500) of net income, before extraordinary items, during the fiscal year
ending June 30, 2004,
this Option shall be immediately exercisable at any time with respect to fifty
thousand (50,000) Option Shares plus the Vested Percentage (as set forth in
section 2.2.1 above) of the remaining fifty thousand (50,000) Option Shares. On
or after the occurrence of both Incentive Targets (whether simultaneously or
not), this Option shall become immediately exercisable at any time with respect
to all of the Option Shares. If either of (a) or (b) are not met on or before
the dates indicated, the Board will establish new goals and dates upon which
this Option shall become immediately exercisable, in whole, or in part.
2.3. Reorganization Event. In the event of a Reorganization Event,
this Option shall become immediately exercisable at any time on or after such
event with respect to all of the Option Shares, provided that, at the time of
such Reorganization Event, the Company has achieved at least 80% of its forecast
revenue, expenses, and net income on an annualized basis.
2.4. Termination for Cause; Resignation. In the event that (i) the
Optionee's employment is Terminated for Cause or (ii) the Optionee resigns or
otherwise voluntarily terminates his or her employment other than as a result of
Retirement (as defined below), then all rights under this Option shall terminate
effective as of the date of such termination of employment.
2.5. Termination without Cause. In the event that the Optionee's
employment is terminated by the Company without Cause other than by reason of
the Optionee's Retirement, Death, or Disabiltiy, the Optionee shall be entitled
to exercise this Option for a period of twelve
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ANNEX A: STOCK OPTION
(12) months thereafter (but in no event later than the Expiration Date), at the
time or times and with respect to the total number of Option Shares provided
herein as though his or her employment had not terminated unless the Board or
the Committee in its sole and absolute discretion determines that this Option
should be exercisable to some greater extent or remain exercisable for some
longer period (ending in no event later than the Expiration Date); provided
however, that on the occurrence of either of the following events, this Option
shall no longer be considered an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986:
2.5.1. the Optionee exercises this option later than three (3)
months after the termination of his employment without Cause; or
2.5.2. the occurrence of either of the Incentive Targets.
2.6. Retirement. In the event that the Optionee Retires, the Optionee
shall be entitled to exercise this Option to the same extent that it would have
been exercisable on the effective date of Retirement for a period of twelve (12)
months thereafter (but in no event later than the Expiration Date).
2.7. Disability. In the event that the Optionee's employment is
terminated as a result of Disability, the Optionee shall remain entitled to
exercise this Option for a period of twenty-four (24) months thereafter, at the
time or times and with respect to the total number of Option Shares provided
herein as though his or her employment had not terminated.
2.8. Death. In the event that the Optionee remains employed by the
Company at the time of his or her death, the Optionee's personal representative
or other successor in interest shall be entitled to exercise this Option to the
same extent that it would have been exercisable on the date of the Optionee's
death for a period of twelve (12) months thereafter (but in no event later than
the Expiration Date), unless the Board or the Committee in its sole and absolute
discretion determines that this Option should be exercisable to some greater
extent or remain exercisable for some longer period (ending in no event later
than the Expiration Date).
Section 3. Exercise of Option.
3.1. In General. To exercise this Option with respect to all or any
portion of the Option Shares, the Optionee must give notice to the Company in
substantially the form of Schedule 1, stating the number of Option Shares with
respect to which this Option is being exercised. In order to exercise this
Option, the notice must be accompanied by payment of the Aggregate Exercise
Price.
3.2. Payment Options. The Optionee may pay the Aggregate Exercise
Price by any combination of:
3.2.1. currency or certified or cashier's check;
3.2.2. if permitted in the sole discretion of the Committee,
shares of Mature Stock of the Company valued at their Fair Market Value on the
date of exercise of the Option;
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ANNEX A: STOCK OPTION
3.2.3. unless prohibited by applicable law, including with the
written notice of exercise referred to in section 3.1, instructions to the
Company to treat the Optionee as having exercised:
(a) the number of shares to be issued to the Optionee; and
(b) that number of shares so that the aggregate difference
between the full market value of a share and the Exercise Price is equal to the
Aggregate Exercise Price.
3.2.4. any other means or method acceptable to the Committee.
3.3. Withholding Taxes. As a condition of delivery of the certificate
representing the shares to be acquired upon exercise of this Option, the Company
may require that the Optionee remit to the Company an amount sufficient to
satisfy all federal, state, and other taxes or withholding requirements that may
be imposed upon the Company.
3.4. Fractional Shares. The Company is not required to issue fractions
of shares upon exercise of this Option. If any fractional interest in a share is
otherwise deliverable upon the exercise of this Option, the Company will
purchase the fractional interest for an amount in cash equal to the Fair Market
Value of the fractional interest.
3.5. Limitation on Exercise. Notwithstanding any other provision of
this Option or of the Plan, in the event of any attempted exercise at any time
when (i) the Optionee is a director, officer or employee of the Company and (ii)
such exercise or issuance is prohibited by applicable law or regulation or the
Company's policies then in effect concerning transactions by officers,
directors, and employees in securities of the Company, this Option is not
exercisable in whole or in part and no shares of Common Stock will be issued by
the Company.
3.6. Issuance Taxes. The Company will issue stock certificates to the
Optionee upon exercise of this Option without charge to the Optionee for any
stamp or similar tax imposed with respect to the exercise of this Option. The
Company is not, however, required to pay any such tax that may be payable on
account of the issuance and delivery of stock certificates in any name other
than that of the registered holder of this Option, and the Company is not
required to issue or deliver any such stock certificate unless and until the
person or persons requesting the issue thereof have paid the amount of such tax
to the Company or have established to the satisfaction of the Company that such
tax has been paid.
3.7. Delivery of Option Shares. Subject to and promptly after the
Optionee's compliance with all of the provisions of this Section 3, the Company
will deliver or cause to be delivered to the Optionee a certificate for the
number of Option Shares then being purchased by the Optionee. If any law or
applicable regulation of the Securities and Exchange Commission or other body
having jurisdiction over the transaction requires the Company or the Optionee to
take any action in connection with Option Shares purchased by the exercise of
the Option, exercise of the Option and delivery of the certificate or
certificates for such shares (including, without limitation, any exercise of the
Option and delivery of the certificate or certificate for such shares in
accordance with the procedures set forth in Section 3.2.3) may be postponed
until completion of the necessary action, which will be taken at the Company's
expense.
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ANNEX A: STOCK OPTION
3.8. Reduction in Number of Option Shares. The number of Option Shares
subject to each outstanding Option shall be reduced by one share for each Option
Share purchased upon exercise of the Option.
Section 4. Restrictions on Transfer; Legends.
4.1. Transfer Restrictions; Opinion of Counsel. The Optionee may not
Transfer all or any part of his rights under this Option except by will or by
operation of the laws of descent and distribution or as expressly provided by
the Plan. No shares issued upon the exercise of this Option may be Transferred,
other than by will or by operation of the laws of descent and distribution,
unless or until such shares are registered pursuant to section 5.8 or the
transferor first delivers to the Company an opinion of counsel reasonably
satisfactory to counsel for the Company to the effect that such Transfer is
permitted under applicable federal and state securities laws. Any purported
Transfer in violation of the foregoing restrictions shall be null and void and
without effect.
4.2. Option Legends. This Option and each option issued in exchange
for or upon transfer of this Option will (unless otherwise permitted by the
provisions of this Section 4) be stamped or otherwise imprinted with a legend in
substantially the following form:
Neither the securities represented by this Option nor the shares of common
stock issuable upon exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state; therefore, the transfer of this Option or the
shares of common stock issuable upon exercise hereof is subject to
compliance with the conditions specified below, and no such transfer of
this Option or such shares shall be valid until such conditions have been
fulfilled.
4.3 Stock Certificate Legends. Unless and until the shares issued on
exercise of this Option are registered as provided in Section 5.8, each
certificate evidencing shares issued upon the exercise of this Option or to any
subsequent transferee of such shares will be stamped with the following legend:
The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, (the "Securities Act") or the
securities laws of any state and no interest therein may be sold,
distributed, assigned, offered, pledged or otherwise transferred unless (a)
there is an effective registration statement under the Securities Act or
the state securities laws covering any such transaction involving said
securities or (b) this corporation receives an opinion of legal counsel for
the holder of these securities (concurred in by legal counsel for this
corporation) stating that such transaction is exempt from such registration
or this corporation otherwise satisfies itself that such transaction is
exempt from registration. Neither the offering of the securities
-7-
ANNEX A: STOCK OPTION
nor any offering of materials have been reviewed by any administrator under
any applicable state or Federal law.
Section 5. Adjustment of Exercise price and Number of Shares Issuable Upon
Exercise.
5.1. Stock Dividends, Splits, Etc. In the event that (i) the
authorized shares of Common Stock are subdivided into a greater, or combined
into a lesser, number of shares of Common Stock (whether with or without par
value) or (ii) the Company issues additional Common Stock as a dividend:
5.1.1. the Exercise Price shall be decreased or increased, as the
case may be, to an amount which bears the same relation to the Exercise Price in
effect immediately before such subdivision, combination, or dividend as the
total number of shares of Common Stock outstanding immediately before such
subdivision, combination, or dividend bears to the total number of shares of
Common Stock outstanding immediately after such subdivision, combination, or
dividend; and
5.1.2. the number of Option Shares shall be adjusted by
multiplying the number of shares so issuable immediately before the adjustment
of the Exercise Price described in subsection (a) by the Exercise Price
immediately before such adjustment and dividing the product so obtained by the
Exercise Price after such adjustment.
5.2. Reorganization Events. In case a Reorganization Event, this
Option shall, after such Reorganization Event, be exercisable for the number of
shares of stock or other securities or property of the Company, or of the
corporation or entity resulting from or surviving, or acquiring the assets of
the Company pursuant to, such Reorganization Event to which the Optionee (at the
time of the Reorganization Event) would have been entitled as a result of the
Reorganization Event had this Option been exercised in full immediately before
such Reorganization Event. In any such case, if necessary, the provisions set
forth in this Section 5 regarding the rights and interests thereafter of the
Optionee shall be appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Option.
5.3. Fractional Shares. In the event of an adjustment to the number of
Option Shares under this Section 5 results in a fractional Option Share, such
fraction will be adjusted to the nearest smaller whole number of shares.
5.4. Notice of Certain Actions. If any date before the Exercise Date
is fixed by the Company as the date as of which holders of Common Stock (i) are
entitled to receive any dividend or any distribution upon the Common Stock of
the Company other than a dividend payable in cash or in Common Stock, (ii) are
offered any subscription or other rights, or (iii) are entitled to participate
in any Reorganization Event or in any liquidation, dissolution, or winding up of
the Company, the Company shall cause notice thereof (specifying such date) to be
mailed to the registered holder of this Option at the Optionee's address
appearing on the books of the Company at least thirty (30) days before the date
as of which such holders of Common Stock are to be determined.
-8-
ANNEX A: STOCK OPTION
5.5. Notice of Adjustment. The Company will mail a notice setting
forth the adjusted Exercise Price and the adjusted number of shares for which
this Option is exercisable whenever the Exercise Price or the number or shares
issuable upon exercise of this option is adjusted as required by the provisions
of this Section 5 to the registered holder of this Option at the holder's last
address as it appears on the books of the Company. The Optionee's failure to
waive or receive such notice, or any defects therein or in the mailing thereof,
will not affect the adjustments.
5.6. Reservation of Sufficient Shares. The Company will at all times
reserve and keep available out of its authorized but unissued Common Stock the
number of its duly authorized shares of Common Stock as shall from time to time
be sufficient for the purpose of effecting the issuance of shares upon the
exercise of this Option. If at any time the number of authorized but unissued
shares of Common Stock is not sufficient to effect the issuance of the Option
Shares, the Company will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to at least the number of shares as is sufficient for this purpose.
5.7. Exercise Price Not Less Than Par Value. As a condition precedent
to taking of any action that would cause an adjustment reducing the
then-prevailing Exercise Price below the then-par value per share of the Option
Shares, the Company shall take such corporate action as may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue its Common Stock at the adjusted Exercise Price upon any subsequent
exercise of this Option.
5.8. Registration and Approval. If any shares of the Common Stock
reserved or to be reserved for the purpose of issuance upon the exercise of this
Option require registration with or approval of any governmental authority under
any federal or state law before such shares may be validly issued upon exercise
of this Option, then the Company covenants that it will in good faith and as
expeditiously as possible endeavor to secure such registration or approval, as
the case may be; provided, however, that this provision shall not require the
Company to endeavor to secure such registration or approval in order (i) to
issue shares upon exercise of this Option if such shares can lawfully be issued
pursuant to one or more exemptions from registration under applicable federal
and state securities laws (whether or not as a consequence thereof such shares
constitute "restricted securities" or the holder of such shares is unable to
transfer such shares absent registration or the availability of a suitable
exemption from registration under such laws) or (ii) to enable any person to
sell or distribute shares received upon exercise of this Option in a transaction
involving a public offering within the meaning of the Securities Act as then in
effect.
5.9. Shares Fully Paid and Nonassessable. The Company covenants that
all shares issued upon exercise of this Option will upon issuance be fully paid
and nonassessable.
Section 6. Miscellaneous.
6.1. Notices. Any notice or communication required or permitted by
this Option will be deemed to be received by the party to whom the notice or
communication is addressed if delivered in person or by commercial courier
service or sent by first class mail,
-9-
ANNEX A: STOCK OPTION
postage prepaid: if to the Company, addressed to it at 00000X Xxxxxxxxx Xxxxx,
Xxxxxx Xxxxx, Xxxxxxxx 00000, marked for the attention of the Chairman of the
Board; and if to the Optionee, addressed to him at the address reflected in the
Company's payroll records; or in either case to such other address as any party
notifies the other in accordance with this section.
6.2. No Rights of Stockholder. The Optionee shall not be deemed a
stockholder of the Company for any purpose until the shares issuable upon
exercise of this Option have been issued to the Optionee upon exercise of this
Option. The existence of this Option shall not affect in any way the right or
power of the Company or its stockholders to make or authorize any adjustments,
recapitalizations, reorganizations, or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, or shares of capital stock with a preference ahead
of, or convertible into, or otherwise affecting the Common Stock or rights
thereof, or dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
6.3. Entire Agreement. This Option contains the entire agreement
between the Parties and is a complete written integration of the Option and
supercedes any prior agreements between them relating to the subject of this
Option.
6.4. Governing Law. The Parties agree that this Option shall be
construed, interpreted and enforced in accordance with the laws of the State of
Maryland without reference to the rules governing conflict of laws.
6.5. Jurisdiction and Venue. The Parties irrevocably submit to
personal jurisdiction and venue in the State of Maryland for the purpose of any
suit, action or proceeding arising out of or relating to this Option.
6.6. Severability. In the event that a court of competent jurisdiction
deems any provision of this Option is deemed illegal, invalid or otherwise
unenforceable, the remainder of this Option shall be valid and enforced to the
fullest extent permitted by law.
6.7. Conflicts with Plan; Amendments. This Option has been granted
pursuant to the Plan and shall be construed consistently therewith. In the event
of any conflict between the provisions of the Plan and this Option, the
provisions of the Plan shall control. The Board or the Committee, as the case
may be, shall have the right, in its sole discretion, to alter or amend this
Option from time to time in any manner for the purpose of promoting the
objectives of the Plan but only if all other options to purchase shares of the
Company's Common Stock pursuant to the Plan which are then in effect and not
wholly exercised at the time of such alteration or amendment are also similarly
altered or amended with substantially the same effect. Any such alteration or
amendment of this Option shall, upon adoption by the Board or the Committee, as
the case may be, become and be binding and conclusive on all persons affected
thereby without requirement for consent or other action with respect thereto by
any such person. The Company shall give written notice to the Optionee of any
such alteration or amendment of this Option as promptly as practicable after the
adoption thereof.
-10-
ANNEX A: STOCK OPTION
6.8. Future Amendment. Except as provided in Section 6.7, this Option
may not be amended except in writing and executed by all Parties, and no course
of conduct by any parties or among the Parties will be deemed to amend the terms
and conditions of this Option, except if such amendment is reduced to writing
and executed by all Parties.
6.9. Waiver. The waiver of any breach of any provision of this Option
by any of the Parties does not constitute or operate as a waiver of any other
breach of any provision of this Option, and any failure to enforce any provision
of this Option does not operate as a waiver of any existing or future rights,
duties, or obligations arising out of this Option.
6.10. Headings. The headings of the sections of this Option are for
convenience of reference only and do not constitute a part of this Option.
6.11. Execution. This Option may be executed in one or more
counterparts, each of which constitutes a duplicate original.
In witness whereof, the parties have caused this Stock Option to be signed
under seal as of the date first above written.
Avatech Solutions, Inc.
By: /s/ (SEAL)
------------------------------
W. Xxxxx Xxxxxxx, Chairman
/s/ (SEAL)
----------------------------------
Xxxxxx X. "Scotty" Xxxxx
-11-
ANNEX A: STOCK OPTION
AVATECH SOLUTIONS, INC.
STOCK OPTION
Notice of Exercise
------------------------------
(Date)
TO: Avatech Solutions, Inc.
00000X Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Chairman of the Board of Directors
I am the holder of a Stock Option dated July 30, 2003 to purchase shares of
the Common Stock of Avatech Solutions, Inc., a Delaware corporation (the
"Company") at a price of $0.35 per share. I hereby exercise that Stock Option
with respect to shares, for an aggregate exercise price of
-------
$ . Payment of the aggregate exercise price accompanies this
---------------
Notice of Exercise.
I acknowledge that the Company is entitled to require as a condition of
delivering the certificate representing these shares that I remit to the Company
an amount sufficient to satisfy all federal, state, and other taxes or
withholding requirements that may be imposed upon the Company. Whether or not
the Company requires me to remit any such amounts, the Company shall have the
right to withhold such amounts from any compensation or other payments otherwise
due to me.
Very truly yours,
----------------------------------------
Xxxxxx X. "Scotty" Xxxxx
Address:
-------------------------------
----------------------------------------
----------------------------------------
ANNEX B
AVATECH SOLUTIONS, INC.
RESTRICTED STOCK AWARD
This Restricted Stock Award ("Award") is made as of the 30th day of July,
2003 (the "Award Date"), by and between Avatech Solutions, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. "Scotty" Xxxxx (the "Grantee").
RECITALS
The Grantee is the Chief Executive Officer of the Company and as such is
important to the Company's continued success. In exchange for the Grantee's past
and future services, the Board of Directors of the Company (the "Board") has
determined to grant to the Grantee a restricted stock award, pursuant to the
Company's Restricted Stock Award Plan (the "Plan"), to grant 50,000 shares (the
"Award Shares") of the Company's common stock, par value $.01 per share ("Common
Stock"), subject to the restrictions and conditions set forth in this Award.
Now, therefore, in consideration for the mutual agreements, promises and
releases set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which is are hereby acknowledged, and to evidence the
grant of and to set forth the terms and conditions governing the grant and
ownership of the Award Shares, and the parties' other agreements related
thereto, Grantee and the Company agree as follows:
AGREEMENT
Section 1. Grant. The Company hereby grants to the Grantee and the Grantee
hereby accepts the Award Shares, consisting of 50,000 shares of the Company's
Common Stock, subject to the following terms and conditions and to the
provisions of the Plan, the terms of which are incorporated by reference herein.
Section 2. Restrictions on Transfer.
2.1. Definitions.
2.1.1. Vested Shares. The Grantee may sell, assign, pledge, or
otherwise transfer Vested Shares in any manner not prohibited by state or
federal law, and no provision of this Award or of the Plan shall restrict the
Grantee from transferring, pledging, or otherwise disposing of Vested Shares.
2.1.2. Unvested Shares. Except as provided in Section 3, the
Grantee may not sell, assign, pledge, or otherwise transfer, either voluntarily
or involuntarily, any shares designated as Unvested Shares. The restrictions on
transfer imposed by the Plan and this Section 2.1.2 on the Unvested Shares may
lapse, and Unvested Shares may become Vested Shares, according to Section 2.2
below.
ANNEX B: RESTRICTED STOCK AWARD
2.2. Vesting of Shares. Provided that the Grantee is an officer of the
Company or one of its affiliates or subsidiaries on such date, on the last day
of each calendar month, beginning with July 2003, the restrictions on transfer
imposed by this Agreement and the Plan on one-twelfth (1/12) of Unvested Shares
shall lapse, and such number of Unvested Shares shall become Vested Shares, so
that all of the Award Shares shall have become Vested Shares on or before June
30, 2004.
2.3. Forfeiture of Unvested Shares. If the Grantee ceases to be an
officer of the Company while the restrictions on transfer imposed by this
Section 2 apply to any Unvested Shares, such Unvested Shares will be immediately
forfeited and returned to the Company.
Section 3. Tender Offer; Merger; Adjustment of Shares. Notwithstanding
anything contained herein to the contrary, including but not limited to the
restrictions on transfer imposed by Section 2:
3.1. Award Shares (i) may be tendered in response to a tender offer
for a request or invitation to tenders of greater than 50 percent of the
outstanding Common Stock of the Company or (ii) may be surrendered in a merger,
consolidation or share exchange involving the Company; provided, in each case,
that the securities or other consideration (including any cash) received in
exchange for the Award Shares shall no longer be subject to the restrictions and
conditions set forth in this Award.
3.2. In the event of any change in the outstanding Common Stock
resulting from a subdivision or consolidation of shares, whether through
reorganization, recapitalization, share split, reverse share split, share
distribution or combination of shares or the payment of a share dividend, the
Award Shares, either Vested or Unvested Shares, shall be treated in the same
manner in any such transaction as other Common Stock. Any Common Stock or other
securities received by the Grantee with respect to the Award Shares in any such
transaction shall not be subject to the restrictions and conditions, including
any vesting restrictions, set forth in this Award.
Section 4. Valuation. The fair market value of the Award Shares on any
given day will be:
4.1. if the Common Stock is listed on a national securities exchange,
the mean between the highest and lowest sale prices reported as having occurred
on the primary exchange with which the Stock is listed and traded on the date
prior to such date, or, if there is no such sale on that date, then on the last
preceding date on which such a sale was reported;
4.2. if the Common Stock is not listed on any national securities
exchange but is quoted in the National Market System of the National Association
of Securities Dealers Automated Quotation System on a last sale basis, the
average between the high bid price and low ask price reported on the date prior
to such date, or, if there is no such sale on that date, then on the last
preceding date on which a sale was reported;
4.3. if the common stock is listed on the OTC Bulletin Board, the last
closing price of the common stock of the Company on the OTC Bulletin Board as of
the close of business on the last business day prior to the date on which the
shares are to be valued.
-2-
ANNEX B: RESTRICTED STOCK AWARD
4.4. if the Common Stock is not listed on a national securities
exchange nor quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System on a last sale basis, nor listed
on the OTC Bulletin Board, the most recent price at which shares of the
Company's common stock traded in any recognized securities market.
4.5. if the Common Stock is not listed on a national securities
exchange nor quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System on a last sale basis, nor listed
on the OTC Bulletin Board, nor traded in any recognized securities market, the
amount determined by the Board to be the fair market value based upon a good
faith attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service; or
4.6. in the event of a transaction pursuant to judicial order, state
law, or a vote of the majority of the Company's shareholders which results in
receipt of value by the shareholders in exchange for their shares of common
stock, that same amount received by the shareholders.
Section 5. Rights as Stockholder. The Grantee shall be entitled to all of
the rights of a stockholder with respect to the Award Shares including the right
to vote such shares and to receive dividends and other distributions payable
with respect to such shares after the Award Date.
Section 6. Certificates.
6.1. Escrow of Certificates. Certificates for the Award Shares will be
issued in the Grantee's name and will be held in escrow by the Company until all
restrictions lapse or such shares are forfeited as provided in Section 2 of this
Award; provided, however, that the terms of such escrow shall make allowance for
the transactions contemplated by Section 3 above.
6.2. Delivery of Certificates. A certificate or certificates
representing the Award Shares as to which restrictions have lapsed shall be
delivered to the Grantee upon such lapse. Notwithstanding anything contained
herein to the contrary, the Company's obligation to issue or deliver
certificates evidencing the Award Shares shall be subject to all applicable
laws, rules and regulations and to such restrictions, conditions or approvals by
any governmental agencies or national securities exchanges as may be required.
6.3. Restrictive Legends.
6.3.1. Each certificate representing an Unvested Award Share will
be stamped with the following legend:
The Sale or transfer of the shares represented by this Certificate is
subject to an Agreement between the Corporation and the Shareholder dated
April 1, 2003. A copy of this Agreement is on file in the principal office
of the Corporation and will be furnished, upon request and without charge
to any holder hereto.
-3-
ANNEX B: RESTRICTED STOCK AWARD
6.3.2. Unless and until the Award Shares are registered as
provided in Section 6.4, each certificate representing an Award Share will be
stamped with the following legend:
The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, (the "Securities Act") or the
securities laws of any state and no interest therein may be sold,
distributed, assigned, offered, pledged or otherwise transferred unless (a)
there is an effective registration statement under the Securities Act or
the state securities laws covering any such transaction involving said
securities or (b) this corporation receives an opinion of legal counsel for
the holder of these securities (concurred in by legal counsel for this
corporation) stating that such transaction is exempt from such registration
or this corporation otherwise satisfies itself that such transaction is
exempt from registration. Neither the offering of the securities nor any
offering of materials have been reviewed by any administrator under any
applicable state or Federal law.
6.1. Registration of Award Shares. If, on the date that some or all of
the Award Shares become transferable and no longer subject to the risk of
forfeiture as provided in Section 2 (the "Vested Award Shares"), the Vested
Award Shares must be registered with any state or federal authority before they
may be resold by the Grantee, the Company, at its expense, will take any and all
reasonable steps necessary to register the Vested Award Shares with the
applicable state or Federal authority. The Grantee will provide any reasonable
assistance requested by the Company in connection with such registration.
Section 7. Withholding and Taxes. The Company shall have the right to
require the Grantee to remit to the Company, or to withhold from other amounts
payable to the Grantee, as compensation or otherwise, an amount sufficient to
satisfy any and all federal, state and local withholding tax requirements when
such amounts become due.
7.1. Notice to Grantee. The Company shall give written notice to the
Grantee no later than thirty (30) days prior to the date on which the Company
must collect or withhold any taxes relating to this Award of the date any such
taxes must be received by the Company and an estimate of the amount of such
taxes.
7.2. Surrender of Award Shares to Pay Taxes. The Grantee may elect, by
written notice to the Company at least ten (10) days prior to the date on which
such taxes must be received by the Company, to surrender a whole number of Award
Shares to the Company, such that the fair market value of the Award Shares
surrendered is equal to or greater than the amount of the withholding taxes. The
Company will remit in cash the difference (if any) between the value of the
Award Shares surrendered and the withholding taxes due to the Grantee as soon as
administratively feasible after the Grantee surrenders the Award Shares. The
Board of Directors, in the exercise of its sole discretion, shall determine both
the fair market value of the Award Shares surrendered pursuant to this paragraph
and the date on which such valuation occurs.
-4-
ANNEX B: RESTRICTED STOCK AWARD
Section 8. Miscellaneous.
8.1. Notices. Any notice or communication required or permitted by
this Option will be deemed to be received by the party to whom the notice or
communication is addressed if delivered in person or by commercial courier
service or sent by first class mail, postage prepaid: if to the Company,
addressed to it at 00000X Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000, marked
for the attention of the Chairman of the Board; and if to the Grantee, addressed
to the Grantee at the address reflected in the Company's payroll records; or in
either case to such other address as any party notifies the other in accordance
with this section.
8.2. Entire Agreement. This Award and the Plan contain the entire
agreement between the Parties and are a complete written integration of the
Award and supercede any prior agreements between them relating to the subject of
this Award.
8.3. No Employment Agreement. Neither this Award nor the Plan are, nor
should either be construed to embody or contain, an agreement or promise of
future employment of the Grantee by the Company or any of its affiliates or
subsidiaries. The Grantee's right, if any, to continue to serve the Company or
any of its affiliates or subsidiaries as an officer, employee or otherwise,
shall not be enlarged or otherwise affected by this Award.
8.4. Governing Law. The Parties agree that this Award shall be
construed, interpreted and enforced in accordance with the laws of the State of
Maryland without reference to the rules governing conflict of laws.
8.5. Jurisdiction and Venue. The Parties irrevocably submit to
personal jurisdiction and venue in the State of Maryland for the purpose of any
suit, action or proceeding arising out of or relating to this Award.
8.6. Severability. In the event that a court of competent jurisdiction
deems any provision of this Award is deemed illegal, invalid or otherwise
unenforceable, the remainder of this Award shall be valid and enforced to the
fullest extent permitted by law.
8.7. Conflicts with Plan; Amendments. This Award has been granted
pursuant to the Plan and shall be construed consistently therewith. In the event
of any conflict between the provisions of the Plan and this Award, the
provisions of the Plan shall control. The Board of Directors of the Company
shall have the right, in its sole discretion, to alter or amend the Plan from
time to time, as governed by the terms of the Plan. Any such alteration or
amendment of the Plan shall, upon adoption by the Board become and be binding
and conclusive on all persons affected thereby without requirement for consent
or other action with respect thereto by any such person. The Company shall give
written notice to the Grantee of any such alteration or amendment affecting this
Award as promptly as practicable after the adoption thereof.
8.8. Future Amendment. This Award may not be amended except in writing
and executed by all parties hereto, and no course of conduct by any parties or
among the parties will be deemed to amend the terms and conditions of this
Award, except if such amendment is reduced to writing and executed by all
parties.
8.9. Waiver. The waiver of any breach of any provision of this Award
by any of the Parties does not constitute or operate as a waiver of any other
breach of any provision of
-5-
ANNEX B: RESTRICTED STOCK AWARD
this Award, and any failure to enforce any provision of this Award does not
operate as a waiver of any existing or future rights, duties, or obligations
arising out of this Award.
8.10. Headings. The headings of the sections of this Award are for
convenience of reference only and do not constitute a part of this Award.
8.11. Pronouns. The masculine shall be deemed to include the feminine
or neuter, as appropriate.
8.12. Execution. This Award may be executed in one or more
counterparts, each of which constitutes a duplicate original.
In witness whereof, the parties have caused this Restricted Stock Award to
be signed under seal as of the date first above written.
AVATECH SOLUTIONS, INC.
By: /s/ (SEAL)
------------------------------
W. Xxxxx Xxxxxxx, Chairman
/s/ (SEAL)
----------------------------------
Xxxxxx X. "Scotty" Xxxxx
-6-
