KESSELRING HOLDING CORPORATION EMPLOYEE NONSTATUTORY STOCK OPTION AGREEMENT
Exhibit
10.2
XXXXXXXXXX
HOLDING CORPORATION
This
Employee Nonstatutory
Stock Option Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between XXXXXXXXXX HOLDING
CORPORATION, a Delaware corporation (the "Company"), and the
following employee of the Company ("Optionee"):
In
consideration of the covenants
herein set forth, the parties hereto agree as follows:
1. Option
Information.
|
(a)
|
Date
of Option:
|
December
12, 2007
|
|
(b)
|
Optionee:
|
Xxxxxxx
Xxxxxxxxxxx
|
|
(c)
|
Number
of Shares:
|
2,500,000
of which 625,000 shall vest on
|
|
November
15, 2007, 625,000 shall vest on February 15, 2008, 625,000 shall
vest on
May 15, 2008 and 625,000 shall vest on August 15,
2008
|
|
(d)
|
Exercise
Price:
|
$0.30
|
2. Acknowledgements.
(a)
Optionee is an employee of the
Company.
|
(b)
The Board of Directors (the "Board" which term shall
include an authorized committee of the Board of Directors) and
shareholders of the Company have heretofore adopted a 2007 Incentive
Stock
Plan (the "Plan"), pursuant to which this Option is being
granted; and
|
|
(c)
The Board has authorized the granting to Optionee of a nonstatutory
stock
option ("Option") to purchase shares of common stock of
the Company ("Stock") upon the terms and conditions
hereinafter stated and pursuant to an exemption from registration
under
the Securities Act of 1933, as amended (the "Securities
Act") provided by Rule 701
thereunder.
|
3. Shares;
Price. Company hereby grants to Optionee the right to purchase,
upon and subject to the terms and conditions herein stated, the number of shares
of Stock set forth in Section 1(c) above (the "Shares") for
cash (or other consideration as is authorized under the Plan and acceptable
to
the Board of Directors of the Company, in their sole and absolute discretion)
at
the price per Share set forth in Section 1(d) above (the "Exercise
Price).
4. Term
of Option;
Continuation of Service. This Option shall expire, and all rights
hereunder to purchase the Shares shall terminate, five (5) years from the date
hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof
upon, and as of the date of, the termination of Optionee's employment if such
termination occurs prior to the end of such five (5) year period. Nothing
contained herein shall confer upon Optionee the right to the continuation of
his
or her employment by the Company or to interfere with the right of the Company
to terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.
1
5. Vesting
of
Option. Subject to the provisions of Sections 7 and 8 hereof,
this Option shall become exercisable as set forth under Section 1(c) of this
Agreement.
6. Exercise. This
Option shall be exercised by delivery to the Company of (a) written notice
of
exercise stating the number of Shares being purchased (in whole shares only)
and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix A, (b) a check or cash in the amount of the Exercise
Price of the Shares covered by the notice (or such other consideration as has
been approved by the Board of Directors consistent with the Plan) and (c) a
written investment representation as provided for in Section 13 hereof.
Notwithstanding anything to the contrary contained in this Option, this Option
may be exercised by presentation and surrender of this Option to the Company
at
its principal executive offices with a written notice of the holder’s intention
to effect a cashless exercise, including a calculation of the number of shares
of Common Stock to be issued upon such exercise in accordance with the terms
hereof (a “Cashless Exercise”). In the event of a Cashless Exercise,
in lieu of paying the Exercise Price in cash, the holder shall surrender this
Option for that number of shares of Common Stock determined by multiplying
the
number of Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market
Price
per share of the Common Stock and the Exercise Price, and the denominator of
which shall be the then current Market Price per share of Common
Stock. For example, if the holder is exercising 100,000 Options with
a per Warrant exercise price of $0.75 per share through a cashless exercise
when
the Common Stock’s current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common
Stock. Market Price is defined as the average of the last reported
sale prices on the principal trading market for the Common Stock during the
five
(5) trading days immediately preceding such date. This Option shall
not be assignable or transferable, except by will or by the laws of descent
and
distribution, and shall be exercisable only by Optionee during his or her
lifetime, except as provided in Section 8 hereof.
7. Termination
of
Employment. If Optionee is terminated "for cause" or the Optionee
resigns without “good reason”, as such terms are defined in the certain Amended
and Restated Employment Agreement entered by and between the Company and
Optionee (the “Employment Agreement”), this Option shall automatically terminate
as to all Shares covered by this Option that have not vested in accordance
with
Section 1(c) prior to such termination. If the Optionee is terminated
“without cause” or if the Employment Agreement is terminated for “good reason”
by the Optionee, as such terms are defined in the Employment Agreement, then
the
Optionee shall continue to have rights as set forth under this Agreement with
respect to all Shares covered by this Option regardless of whether such Options
have vested pursuant to Section 1(c).
2
Unless
earlier terminated, all rights
under this Option shall terminate in any event on the expiration date of this
Option as defined in Section 4 hereof.
8. Death
of
Optionee. If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is
the
lesser, exercise this Option and purchase Shares to the extent, but only to
the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.
9. No
Rights as
Shareholder. Optionee shall have no rights as a shareholder with
respect to the Shares covered by any installment of this Option until the
effective date of issuance of the Shares following exercise of this Option,
and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.
10. Recapitalization. Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however
that
the conversion of any convertible securities of the Company shall not be deemed
having been "effected without receipt of consideration by the
Company".
In
the event of a proposed dissolution
or liquidation of the Company, a merger or consolidation in which the Company
is
not the surviving entity, or a sale of all or substantially all of the assets
or
capital stock of the Company (collectively, a
"Reorganization"), this option shall fully vest.
If
the Company shall be the surviving
entity in any merger or consolidation, this Option thereafter shall pertain
to
and apply to the securities to which a holder of Shares equal to the Shares
subject to this Option would have been entitled by reason of such merger or
consolidation, and the installment provisions of Section 5 shall continue to
apply.
In
the event of a change in the shares
of the Company as presently constituted, which is limited to a change of all
of
its authorized Stock without par value into the same number of shares of Stock
with a par value, the shares resulting from any such change shall be deemed
to
be the Shares within the meaning of this Option.
To
the extent that the foregoing
adjustments relate to shares or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly provided, Optionee
shall have no rights by reason of any subdivision or consolidation of shares
of
Stock of any class or the payment of any stock dividend or any other increase
or
decrease in the number of shares of stock of any class, and the number and
price
of Shares subject to this Option shall not be affected by, and no adjustments
shall be made by reason of, any dissolution, liquidation, merger, consolidation
or sale of assets or capital stock, or any issue by the Company of shares of
stock of any class or securities convertible into shares of stock of any
class.
3
The
grant of this Option shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or transfer
all or any part of its business or assets.
11. Taxation
upon
Exercise of Option. Optionee understands that, upon exercise of
this Option, Optionee will recognize income, for Federal and state income tax
purposes, in an amount equal to the amount by which the fair market value of
the
Shares, determined as of the date of exercise, exceeds the Exercise Price.
The
acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate
with Company in establishing the amount of such income and corresponding
deduction to the Company for its income tax purposes. In the event that the
Company should become liable with respect to withholding for federal or state
income and employment tax purposes (the “Tax Liability”) as a result of the
Optionee’s exercise of this Option, the Optionee shall reimburse the Company for
the Tax Liability prior to such Tax Liability becoming due.
12. Modification,
Extension and Renewal of Options. The Board or Committee, as
described in the Plan, may modify, extend or renew this Option or accept the
surrender thereof (to the extent not theretofore exercised) and authorize the
granting of a new option in substitution therefore (to the extent not
theretofore exercised), subject at all times to the Plan and the
Code. Notwithstanding the foregoing provisions of this Section 12, no
modification shall, without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights of Optionee hereunder.
13. Investment
Intent;
Restrictions on Transfer.
|
(a) Optionee
represents and agrees that if Optionee exercises this Option in whole
or
in part, Optionee will in each case acquire the Shares upon such
exercise
for the purpose of investment and not with a view to, or for resale
in
connection with, any distribution thereof; and that upon such exercise
of
this Option in whole or in part, Optionee (or any person or persons
entitled to exercise this Option under the provisions of Sections
7 and 8
hereof) shall furnish to the Company a written statement to such
effect,
satisfactory to the Company in form and substance. If the Shares
represented by this Option are registered under the Securities Act,
either
before or after the exercise of this Option in whole or in part,
the
Optionee shall be relieved of the foregoing investment representation
and
agreement and shall not be required to furnish the Company with the
foregoing written statement.
|
|
(b) Optionee
further represents that Optionee has had access to the financial
statements or books and records of the Company, has had the opportunity
to
ask questions of the Company concerning its business, operations
and
financial condition, and to obtain additional information reasonably
necessary to verify the accuracy of such
information
|
4
|
(c) Unless
and until the Shares represented by this Option are registered under
the
Securities Act, all certificates representing the Shares and any
certificates subsequently issued in substitution therefor and any
certificate for any securities issued pursuant to any stock split,
share
reclassification, stock dividend or other similar capital event shall
bear
legends in substantially the following
form:
|
THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER
THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE
OR
SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY
INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.
|
|
and/or
such other legend or legends as the Company and its counsel deem necessary
or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.
14. Stand-off
Agreement. Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act pursuant
to a
public offering, and upon the request of the Company or any underwriter managing
an underwritten offering of the Company's securities, Optionee shall not sell,
short any sale of, loan, grant an option for, or otherwise dispose of any of
the
Shares (other than Shares included in the offering) without the prior written
consent of the Company or such managing underwriter, as applicable, for a period
of at least one year following the effective date of registration of such
offering.
15. Notices. Any
notice required to be given pursuant to this Option or the Plan shall be in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, five (5) days after deposit in the U.S. mail, postage
prepaid, addressed to Optionee at the address last provided by Optionee for
his
or her employee records.
16. Agreement
Subject to
Plan; Applicable Law. This Option is made pursuant to the Plan
and shall be interpreted to comply therewith. A copy of such Plan is available
to Optionee, at no charge, at the principal office of the Company. Any provision
of this Option inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. This Option has been granted,
executed and delivered in the State of Delaware, and the interpretation and
enforcement shall be governed by the laws thereof and subject to the exclusive
jurisdiction of the courts therein.
In
Witness Whereof,
the parties hereto have executed this Option as of the date first above
written.
5
COMPANY:
|
XXXXXXXXXX
HOLDING CORPORATION,
a
Delaware corporation
|
||
|
By:
|
/s/ Xxxxx Xxxxxx | |
Name: Xxxxx Xxxxxx | |||
Title: Chairman | |||
OPTIONEE:
|
|||
By:
|
/s/ Xxxxxxx Xxxxxxxxxxx | ||
(signature)
|
|||
Name: Xxxxxxx
Xxxxxxxxxxx
|
|||
6
Appendix
A
NOTICE
OF EXERCISE
XXXXXXXXXX
HOLDING CORPORATION
_________________
_________________
_________________
Re:
Nonstatutory Stock
Option
1) Notice
is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement
that I elect to purchase the number of shares set forth below at the exercise
price set forth in my option agreement:
Nonstatutory
Stock Option Agreement
dated: ____________
Number
of shares being purchased:
____________
Exercise
Price:
$____________
A
check in the amount of the aggregate
price of the shares being purchased is attached.
OR
2) I
elect a cashless exercise pursuant to Section 6 of my Nonstatutory Stock Option
Agreement. The Average Market Price as of _______ was
$_____.
I
hereby confirm that such shares are
being acquired by me for my own account for investment purposes, and not with
a
view to, or for resale in connection with, any distribution thereof. I will
not
sell or dispose of my Shares in violation of the Securities Act of 1933, as
amended, or any applicable federal or state securities laws. Further, I
understand that the exemption from taxable income at the time of exercise is
dependent upon my holding such stock for a period of at least one year from
the
date of exercise and two years from the date of grant of the
Option.
I
understand that the certificate
representing the Option Shares will bear a restrictive legend within the
contemplation of the Securities Act and as required by such other state or
federal law or regulation applicable to the issuance or delivery of the Option
Shares.
I
agree to provide to the Company such
additional documents or information as may be required pursuant to the Company's
2007 Incentive Stock Plan.
By:
|
/s/ | ||
(signature)
|
|||
Name: | |||
7