EXHIBIT 10.13
Grant No. ____
XENONICS HOLDINGS, INC.
STOCK OPTION GRANT
OPTIONEE: ______________________
ADDRESS: ______________________
GRANT DATE: ______________________
EXERCISE PRICE: $ ___ per share
NUMBER OF OPTION SHARES: ____ shares
EXPIRATION DATE: ____________
TYPE OF OPTION: ____ Incentive Option ____ Non-Statutory Option
This Stock Option Grant is made, as of the Grant Date set forth above, by
and between Xenonics Holdings, Inc., a Nevada corporation (the "Corporation")
and the Optionee named above. This Stock Option Grant is subject to the terms of
the Corporation's 2004 Stock Incentive Plan (the "Plan"), a copy of which is
attached hereto as Exhibit A. All capitalized terms not defined herein shall
have the meaning set forth in the Plan. In the event of any inconsistency
between the terms of the Plan and the terms of this Stock Option Grant, the
terms of the Plan shall govern.
1. GRANT OF OPTION. The Corporation hereby grants to Optionee named above,
as of the Grant Date, an option to purchase up to the total number of Option
Shares specified above. The Option Shares shall be purchasable from time to time
during the option term specified in paragraph 2 below at the Exercise Price.
2. OPTION TERM. The option term shall be measured from the Grant Date and
shall accordingly expire at the close of business on the Expiration Date
specified above, unless sooner terminated in accordance with paragraph 5 below.
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3. LIMITED TRANSFERABILITY. This option shall be neither transferable nor
assignable, in whole or in part, by Optionee other than by will or by the laws
of descent and distribution following Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee. However, if this option is
designated a Non-Statutory Option above, then this option may also, in
connection with Optionee's estate plan, be assigned in whole or in part during
Optionee's lifetime to one or more members of Optionee's immediate family
(spouse or children) or to a trust established exclusively for the benefit of
one or more such immediate family members. Optionee shall give written notice of
any such assignment during Optionee's lifetime to the Corporation at least ten
days prior to the assignment. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for this option immediately prior to such assignment and
shall be set forth in such documents delivered to the assignee as the
Administrator may deem appropriate, and the assignee shall be obligated to agree
in writing to the terms of the Plan and this Stock Option Grant.
4. EXERCISABILITY.
[ ] (a) All rights hereunder are immediately vested; or
[ ] (b) This option shall become vested or exercisable for the Option
Shares in installments as provided in the Exercise Schedule below:
MONTHS ADDITIONAL EXERCISABLE ACCUMULATED
SINCE GRANT PERCENT EXERCISABLE PERCENT
----------- ------- -------------------
12 33.33% 33.33%
24 33.33% 66.66%
36 33.33% 100.00%
5. CESSATION OF SERVICE. The option term specified in paragraph 2 above
shall terminate, and this option shall cease to be outstanding prior to the
Expiration Date, upon Optionee's ceasing to be an employee of the Corporation
(or of a subsidiary of the Corporation) or, if Optionee is a non-employee
director of the Corporation, upon Optionee's ceasing to be a director of the
Corporation. In such event, the following provisions shall apply:
a. Should Optionee's service terminate for any reason (other than
death or for "cause" as defined below) while this option is outstanding, then
Optionee shall have a period of three months (commencing with the date of such
cessation of service) during which to exercise this option as to Option Shares
that were vested on or before the date of such service termination.
b. Should Optionee die while this option is outstanding, then the
personal representative of Optionee's estate (or the person or persons to whom
the option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution) shall have a period of twelve months
(commencing with the date of such cessation of service) during which to
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exercise this option as to Option Shares that were vested on or before the date
of such service termination.
c. Should Optionee's service be terminated for "cause," then this
option shall terminate immediately and cease to remain outstanding. For purposes
of this Stock Option Grant, Optionee's service shall be deemed to have been
terminated for "cause" if the Corporation or a subsidiary terminates Optionee's
service because of (i) Optionee's conviction of a felony or plea of guilty or
nolo contendere to a felony, (ii) Optionee's intentional failure or refusal to
perform his or her employment or directorship duties, or (iii) Optionee's
intentional misconduct that is materially and demonstrably injurious to the
Corporation's business.
d. During the limited post-service exercise period described above,
this option may not be exercised in the aggregate for more than the number of
vested Option Shares for which the option is exercisable on the date of the
Optionee's cessation of service. Upon the expiration of such limited
post-service exercise period or upon the Expiration Date (if earlier), this
option shall terminate and cease to be outstanding for any vested Option Shares
for which the option has not been exercised. In no event shall this option be
exercisable at any time after the Expiration Date. To the extent this option is
not otherwise exercisable for vested Option Shares at the time of Optionee's
cessation of service, this option shall immediately terminate and cease to be
outstanding with respect to those shares.
6. ADJUSTMENT IN OPTION SHARES. Should any change be made to the Common
Stock by reason of any split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the total number and/or class of securities
subject to this option, and (ii) the Exercise Price, in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.
7. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price, and the issuance of the
shares of Common Stock covered by the option exercise has been evidenced by an
appropriate entry on the books of the Corporation or of a duly authorized
transfer agent.
8. MANNER OF EXERCISING OPTION
a. In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising this option) must take all of the
following actions:
(1) Execute and deliver to the Corporation a Stock Option
Exercise Notice and Purchase Agreement (in a form to be provided by the
Corporation) for the Option Shares for which the option is exercised.
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(2) Pay the aggregate Exercise Price for the shares of Common
Stock which are being acquired by exercise of the option in one or more of the
following forms:
(a) Cash or check made payable to the Corporation; or
(b) A full recourse promissory note payable to the
Corporation, but only if and to the extent authorized by the
Administrator in accordance with paragraph 12.
Upon prior written approval of the Administrator, the Exercise Price
may also be paid as follows:
(c) In shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at fair market value
(determined in accordance with Section 6.1.9 of the Plan) on the
Exercise Date; or
(d) Through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
written instructions (1) to a Corporation-designated brokerage firm
to effect the immediate sale of the shares of Common Stock covered
by the option exercise and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate Exercise Price plus all applicable federal, state and
local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (2) to the Corporation to
deliver the certificates for the purchased shares of Common Stock
directly to such brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is utilized
in connection with the option exercise, payment of the Exercise Price must
accompany the Stock Option Exercise Notice and Purchase Agreement delivered to
the Corporation in connection with the option exercise.
(3) Furnish to the Corporation appropriate documentation that
the person or persons exercising the option (if other than Optionee) have the
right to exercise this option.
(4) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for it to comply
with the applicable requirements of federal and state securities laws.
(5) Make appropriate arrangements with the Corporation (or
subsidiary employing or retaining Optionee) for the satisfaction of all federal,
state and local income and employment tax withholding requirements applicable to
the option exercise.
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b. As soon as practical after the Exercise Date, the Corporation
shall issue to Optionee (or any other person or persons exercising this option)
a share certificate for the purchased shares of Common Stock, with the
appropriate legends affixed thereto.
c. In no event may this option be exercised for any fractional
shares.
9. COMPLIANCE WITH LAWS AND REGULATIONS
a. The exercise of this option and the issuance of the shares of
Common Stock upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or Nasdaq, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
b. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its reasonable efforts to obtain all such
approvals.
10. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
paragraph 3 above, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's permitted assigns and the legal representatives, heirs and
legatees of Optionee's estate.
11. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated on the Stock Option Grant. All notices shall be deemed
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.
12. FINANCING. The Administrator may, in its absolute discretion and
without any obligation to do so, permit Optionee to pay the Exercise Price for
the purchased Option Shares by delivering a full-recourse promissory note
payable to the Corporation; provided, however, that an executive officer or a
director of the Corporation shall not be permitted to deliver a promissory note
to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Administrator in its sole discretion.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the terms of the Plan. All decisions of the Administrator with respect to any
question or issue arising under the Plan or
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this Agreement shall be conclusive and binding on all persons having an interest
in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Nevada without resort to
its conflict-of-laws rules.
15. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event this
option is designated an Incentive Option above, the following terms and
conditions shall also apply to the grant:
a. This option shall cease to qualify for favorable tax treatment as
an Incentive Option if (and to the extent) this option is exercised for one or
more Option Shares: (1) more than three months after the date Optionee ceases to
be an employee or a director of the Corporation (or a subsidiary) for any reason
other than death or (2) more than twelve months after the date Optionee's
service terminates by reason of death.
b. No installment under this option shall qualify for favorable tax
treatment as an Incentive Option if (and to the extent) the aggregate fair
market value (determined at the Grant Date and in accordance with Section 6.1.9
of the Plan) of the Common Stock for which such installment first becomes
exercisable hereunder would, when added to the aggregate value (determined as of
the respective date or dates of grant) of any earlier installments of the Common
Stock and any other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar
($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.
c. Should the Board of Directors or Administrator elect to
accelerate the exercisability of this option upon a Corporate Transaction
described in Section 6.1.2 of the Plan, then this option shall qualify as an
Incentive Option only to the extent the aggregate fair market value (determined
at the Grant Date and in accordance with Section 6.1.9 of the Plan) of the
Common Stock for which this option first becomes exercisable in the calendar
year in which the Corporate Transaction occurs does not, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or one or more other
Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any parent or subsidiary)
first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the applicable One Hundred
Thousand Dollar ($100,000) limitation be exceeded in the calendar year of such
Corporate Transaction, the option may nevertheless be exercised for the excess
shares in such calendar year as a Non-Statutory Option.
d. Should Optionee hold, in addition to this option, one or more
other options
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to purchase Common Stock which become exercisable for the first time in the same
calendar year as this option, then the foregoing limitations on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
f. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder
approval be issued under the Plan, then this option shall cease to qualify as an
Incentive Option unless stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of the Plan.
g. Shares purchased pursuant to this option shall cease to qualify
for favorable tax treatment as Incentive Option shares if and to the extent
Optionee disposes of such shares within two years from the Grant Date or within
one year of Optionee's purchase of said shares.
h. Optionee acknowledges that the rules regarding Incentive Options
as contained in the Internal Revenue Code are subject to amendment in the
future. Optionee should consult his or her tax advisor prior to taking any
action with respect to this option or the shares purchased hereunder.
IN WITNESS WHEREOF, this Stock Option ▇▇▇▇▇ is executed as of the Grant
Date first noted above.
XENONICS HOLDINGS, INC.
By: _________________________
Its: ________________________
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OPTIONEE'S ACKNOWLEDGEMENT AND AGREEMENT
Optionee understands and agrees that the option is granted subject to and
in accordance with the terms of the Corporation's 2004 Stock Incentive Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the Plan and the
terms of the option as set forth in this Stock Option Grant.
Optionee hereby acknowledges receipt of a copy of the Plan in the form
attached hereto as Exhibit A, and represents that Optionee has read and
understands the Plan, and accepts this option subject to all terms and
provisions of the Plan and the Plan documents. Optionee hereby agrees to accept
as binding, conclusive and final, all decisions and interpretations of the Board
of Directors and Administrator upon any questions arising under the Plan.
Optionee acknowledges that there may be adverse tax consequences upon exercise
of this option and/or upon disposition of the purchased shares of Common Stock,
and that Optionee should consult a tax advisor prior to such exercise or
disposition.
OPTIONEE
OPTIONEE
DATE
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