UNIQUE MOBILITY, INC.
1992 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT made as of this 4th day of September, 1997, between Unique
Mobility, Inc., a Colorado corporation (the "Company"), and Xxx X. Xxxxxx (the
"Option Holder").
1. Stock Option.
Pursuant to the Unique Mobility, Inc. 1992 Stock Option Plan (the "Plan") and
subject to the terms and conditions of this Agreement, the Company hereby
grants to the Option Holder an option (the "Option") to purchase 36,000 shares
of the authorized and unissued $0.01 par value common
stock (the "Stock") of the Company at a price of $7.13 per share (the "Option
Price"). The Option is granted on August 19, 1997 (the "Grant Date"). The
Option granted pursuant to this Agreement is not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as it may be amended (the "Code").
2. Exercise of the Option.
(a) The Option shall not become exercisable until the Option Holder has
completed one year of continuous employment after the Grant Date. Upon the
completion of one full year of continuous employment after the Grant Date, the
Option shall become exercisable as to one-third of the number of shares
subject to the Option. Upon the completion of the second full year of
continuous employment after the Grant Date, the Option shall become
exercisable as to an additional one-third of the shares originally subject to
the Option. Upon the completion of the third full year of continuous
employment after the Grant Date, the Option shall become exercisable as to an
additional one-third of the shares originally subject to the Option.
Except as set forth in Sections 4 or 5 hereof, the Option shall not be
exercisable as to any shares as to which the continuous employment requirement
shall not be satisfied, regardless of the circumstances under which the Option
Holder's employment by the Company, or service with the Company, shall be
terminated. The number of shares as to which the Option may be exercised shall
be cumulative, so that once the Option shall become exercisable as to any
shares it shall continue to be exercisable as to such shares until expiration
or termination of the Option as provided in Section 5 hereof.
(b) The Option may be exercised only by delivery to the Corporate
Secretary of the Company of written notice specifying the number of shares
with respect to which the Option is exercised and payment of the Option Price.
At the request of the Company, such notice shall contain the Option Holder's
representation that he is purchasing such Stock for investment purposes only
and his agreement not to sell any Stock purchased pursuant to the Option in
any manner that is in violation of the Securities Act of 1933, as amended, or
any applicable state law. Such restrictions or notice thereof shall be placed
on the certificates representing the Stock purchased pursuant to the Option,
and the Company may refuse to issue the certificates or to transfer the shares
on its books unless it is satisfied that no violation of such restrictions
will occur. The exercise of the Option shall be deemed effective on the
receipt of such notice by the Corporate Secretary and payment to the Company.
The purchase of such Stock shall take place at the principal offices of the
Company upon the delivery of such notice of exercise, at which time the Option
Price for the Stock shall be paid in full by any of the methods set forth in
Section 2(c) below. A properly executed certificate or certificates
representing the Stock shall be issued by the Company and delivered to the
Option Holder. If certificates are used to pay all or part of the exercise
price, upon such payment, separate certificates shall be delivered
representing each certificate so used, and an additional certificate shall be
delivered representing any additional shares to which the Option Holder is
entitled as a result of the exercise of the Option. If payment is made
pursuant to subparagraph (c)(v) below, the certificate shall be delivered
to the broker.
(c) The exercise price shall be paid any of the following methods or any
combination of the following methods. as the Stock Option Committee (the
"Committee") shall determine in its sole discretion:
(i) in cash;
(ii) by certified or cashier's check payable to the order of the
Company;
(iii) by delivery to the Company of certificates representing the
number of shares then owned by the Option Holder, the fair market value of
which equals the purchase price of the Stock purchased pursuant to the Option,
properly endorsed for transfer to the Company; provided however, that the
Option may not be exercised by delivery to the Company of certificates
representing Stock, unless such Stock has been held by the Option Holder for
more than six months; for purposes of this Agreement, the "fair market value"
of any shares of Stock delivered in payment of the Option Price upon exercise
of the Option shall be as defined in Section 2.1(9) of the Plan;
(iv) to the extent permitted under the applicable provisions of state
law, by delivery to the Company of a promissory note, which shall be in a
principal amount equal to the Option Price plus any federal and state income
tax required to be withheld; which shall be full recourse and secured by all
or a portion of the Stock acquired pursuant to the exercise of the Option;
which shall bear interest at a rate determined by the Committee, but not lower
than the rate required to avoid the imputation of interest under the Code;
which shall provide for level quarterly payments of interest and principal
over its term; which shall become payable in full upon the first to occur of
the fifth anniversary of the date the Option is exercised, failure to pay any
payment of principal and interest within five days after it is due or
termination of the Option Holder's employment for any reason; and which shall
contain such other terms and conditions including the provision of security in
addition to the Stock that the Company, in its sole discretion, deems
necessary or appropriate;
(v) by delivery to the Company of a property executed notice of
exercise together with irrevocable instructions to a broker to deliver to the
Company promptly the amount of the proceeds of the sale of all or a portion of
the Stock or of a loan from the broker to the Option Holder necessary to pay
the exercise price.
3. Adjustment of the Option.
(a) Adjustment by Stock Split. Stock Dividend. Etc. If at any time the
Company increases or decreases the number of its outstanding shares of Stock,
or changes in any way the rights and privileges of such shares by means of the
payment of a stock dividend or the making of any other distribution on such
shares payable in Stock, or through a stock split, subdivision, consolidation,
combination or reclassification or recapitalization involving the Stock, the
numbers, rights and privileges of the shares of Stock included in the Option
shall be increased, decreased or changed in like manner as if such shares had
been issued and outstanding, fully paid and nonassessable at the time of such
occurrence.
(b) Dividends Payable in Stock of Another Corporation. Etc. If at any
time the Company pays or makes any dividend or other distribution upon the
Stock payable in securities or other property (except money or Stock), a
proportionate part of such securities or other property shall be set aside and
delivered to the Option Holder when he exercises the Option. The securities
and other property delivered to the Option Holder upon exercise of the Option
shall be in the same ratio to the total securities and property set aside
for the Option Holder as the number of shares with respect to which the Option
is then exercised is to the total shares subject to the Option.
(c) Other Changes in Stock. If there shall be any change, other than as
specified in the preceding subsections (a) and (b), in the number or kind of
outstanding shares of Stock or of any stock or other securities into which the
Stock shall be changed or for which it shall have been exchanged, then and if
the Committee shall in its discretion determine that such change equitably
requires an adjustment in the number or kind of shares subject to the Option,
such adjustments shall be made by the Committee and shall be effective for all
purposes of this Agreement.
(d) Apportionment of Price. Upon any occurrence described in the
preceding subsections (a), (b), and (c), the total Option Price shall remain
unchanged and shall be apportioned ratably over the increased or decreased
number or changed kinds of securities or other properties subject to the
Option.
(e) Rights to Subscribe. If at any time the Company grants, to the
holders of its Stock, rights to subscribe pro rata for additional shares
thereof or for any other securities of the Company or of any other
corporation, there shall then be added to the number of shares subject to the
Option, the Stock or other securities that the Option Holder would have been
entitled to subscribe for if immediately prior to such grant, the Option
Holder had exercised his entire Option, and the Option price shall be
increased by the amount of the price that would have been payable by the
Option Holder for such Stock or other securities.
(f) General Adjustment Rules. No adjustment or substitution provided for
in this Section 3 shall require the company to sell a fractional share under
this Agreement and the total substitution or adjustment with respect to this
Agreement shall be limited by deleting any fractional share. In the case of
any such substitution or adjustment, the Option shall be equitably adjusted by
the Committee to reflect the greater or lesser number of shares of Stock or
other securities into which the Stock subject to the Option may have been
changed. Notwithstanding the foregoing subsections (a), (b), (c), (d), and
(e), no adjustment shall be made that would constitute a modification of the
Option within the meaning of Section 424 of the Code.
(g) Determinations by the Committee. Adjustments under this paragraph
shall be made by the Committee, whose determinations with respect thereto
shall be final and binding. No fractional shares shall be issued on account of
any such adjustment.
4. Reorganization or Change of Control.
(a) Reorganization. If the Company is merged or consolidated with another
corporation or the Company is a party to a reorganization (other than a
merger, consolidation or reorganization in which the Company is the continuing
corporation and which does not result in any reclassification or change of
outstanding shares of stock), or if all or substantially all of the assets or
more than 50% of the outstanding voting stock of the Company is acquired by
any other corporation, business entity or person (other than a sale or
conveyance in which the Company continues as a holding company of an entity or
entities that conduct the business or businesses formerly conducted by the
Company), or in case of a reorganization (other than a reorganization under
the United States Bankruptcy Code) or liquidation of the Company, the
Committee shall, either (i) make appropriate provision for the adoption and
continuation of the Plan by the acquiring or successor corporation and for the
protection of any such outstanding Options by the substitution on an equitable
basis of appropriate stock of the Company or of the merged, consolidated or
otherwise reorganized corporation which will be issuable with respect to the
Stock, provided that no additional benefits shall be conferred upon the Option
Holder as a result of such substitution, and the excess of the aggregate Fair
Market Value of the Stock subject to the Option immediately after such
substitution over the Option Price is not more than the excess of the
aggregate Fair Market Value of the Stock subject to the Option immediately
before such substitution over the Option Price, and provided further that any
such substitution made with respect to the Option shall comply with Section
424(a) of the Code, or (ii) upon written notice to the Option Holder, provide
that the unexercised portion of the Option must be exercised within thirty
(30) days of the date of such notice or the Option will be terminated. If
alternative (i) is implemented, the Committee may, at its sole discretion,
provide that the Option may be exercisable in full without regard to the
applicable exercise periods set forth in Section 2 and if alternative (ii) is
implemented, the Option shall be exercisable in full without regard to the
applicable exercise periods set forth in Section 2 above. However, if the
Option Holder is subject to Section 16(b) of the Securities Exchange Act of
1934, the Option shall not become exercisable until six months after the Grant
Date.
(b) Change of Control. If there is a change in control of the Company, as
defined below, the Option shall become exercisable in full, without regard to
applicable exercise periods set forth in Section 2. For purposes of the Plan,
a "change in control" shall be deemed to have occurred if during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company (the "Board") (and any new
director whose election by the Board or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority thereof.
5. Expiration and Termination of the Option.
The Option shall expire 10 years (the "Option Period") from the date of this
Agreement or prior to such time as follows:
(a) If the Option Holder's employment with the Company is terminated for
cause, as determined by the Company, the Option shall terminate immediately
and shall thereafter be void for all purposes. As used in this Section 5,
"cause" shall mean a gross violation, as determined by the Company, of the
Company's established policies and procedures, provided that the effect of
this Section 5 shall be limited to determining the consequences of a
termination and that nothing in this Section 5 shall restrict or otherwise
interfere with the Company's discretion with respect to the termination of any
employee.
(b) If the Option Holder retires from employment by the Company or its
affiliates during the Option Period but after attaining age 65, the Option may
be exercised by the Option Holder, or in the case of death by the persons
specified in subsection (c) of this Section 5, within three months following
his or her retirement (if otherwise within the Option Period), but not
thereafter. In any such case, the Option may be exercised only as to the
shares as to which the Option had become exercisable on or before the date of
the Option Holder's termination of employment or death.
(c) If the Option Holder dies during the Option Period while still
employed or within the one-month period referred to in (d) below, the Option
may be exercised by those entitled to do so under the Option Holder's will or
by the laws of descent and distribution within fifteen months following the
Option Holder's death, but not thereafter. In any such case, the Option may be
exercised only as to the shares as to which the Option had become exercisable
on or before the date of the Option Holder's death.
(d) If the employment of the Option Holder by the Company is terminated
(which for this purpose means that the Option Holder is no longer employed by
the Company or by any parent or subsidiary corporation of the Company within
the meaning of Section 424 of the Code) within the Option Period for any
reason other than cause, retirement after attaining age 65, or the Option
Holder's death, the Option may be exercised by the Option Holder within one
month following the date of such termination (if otherwise within the Option
Period), but not thereafter. In any such case, the Option may be exercised
only as to the shares as to which the Option had become exercisable on or
before the date of termination of employment.
6. Transferability.
The Option may not be transferred except by will or pursuant to the laws of
descent and distribution, and it shall be exercisable during the Option
Holder's life only by him and after his death only by those entitled to do so
under his will or the applicable laws of descent and distribution; provided
however, that, during his lifetime, the Option Holder may transfer the Option
to a member of his immediate family, a trust of which members of his immediate
family are the sole beneficiaries, or a partnership of which members of his
immediate family or trusts for the sole benefit of his immediate family are
the only partners. For this purpose immediate family means the Option Holder's
spouse, children, stepchildren, grandchildren, parents, grandparents, siblings
(including half brothers and sisters), and individuals who are family members
by adoption.
7. Consideration for the Grant of the Option.
In consideration of the granting of this Option, the Option Holder agrees to
remain in the employ of the Company at the pleasure of the Company for a
continuous period of at least one year from the date of this Agreement at the
salary rate in effect at the date of this Agreement or at such changed rate as
may be fixed from time to time by the company
8. Withholding.
(a) The Option Holder shall make appropriate arrangements with the
Company to provide for the amount of withholding that may be required by
Sections 3102 and 3402 of the Code and applicable state income tax laws.
(b) The Option Holder may elect to pay all such amounts of tax
withholding, or any part thereof, if any withholding is required, by electing
to transfer to the Company, or to have the Company withhold from shares
otherwise issuable to the Option Holder, shares of Stock having a value equal
to the amount required to be withheld or such lesser amount as may be elected
by the Option Holder. All elections shall be subject to the approval or
disapproval of the Committee. The value of shares of Stock to be withheld
shall be based on the fair market value of the Stock on the date that the
amount of tax to be withheld is to be determined (the "Tax Date"). Any such
election by an Option Holder to have shares of Stock withheld for this purpose
shall be subject to the following restrictions:
(i) All elections must be made prior to the Tax Date.
(ii) All elections shall be irrevocable.
(iii) If the Option Holder is subject to Section 16 of the Securities
Exchange Act of 1934 ("Section 16"), the Option Holder may not exercise the
Option within six months of the date of grant.
(iv) If the Option Holder is subject to Section 16, any such election
must be made either six months prior to the Tax Date or in the ten day "window
period" beginning on the third day following the release of the Company's
quarterly or annual summary statement of sale and earnings.
9. Compliance with Certain Company Policies.
The Option Holder shall comply at all times with the Company's policy on
trading securities of the Company as such policy is in effect from time to
time. In addition, the Option Holder agrees to sell no Stock (including Stock
acquired otherwise than upon exercise of an Option) if the sale of such Stock,
together with all other sales of Stock by any of the Company's directors or
employees on any stock exchange or in the over-the-counter market, shall
exceed 10% of the total trading volume of the Stock on the date of sale by the
Option Holder on any stock exchange and in the over-the counter market. If the
Option Holder fails to comply with the Company's policy on trading securities,
or violates the agreement made in the immediately preceding sentence, as
determined in the sole discretion of the Company, the Option Holder shall pay
to the Company as liquidated damages the profit realized (which shall be equal
to the excess of the amount received by the Option Holder over the Option
Holder's basis for the Stock disposed of) in the transaction that resulted in
the failure to comply with Company's policy. This condition shall survive the
exercise of an Option and the termination of the Plan.
10. Notices.
Any notice required or permitted to be given under this Agreement shall be in
writing and shall be given by first class registered or certified mail,
postage prepaid, or by personal delivery to the appropriate party, addressed:
(a) If to the Company, at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000;
or
(b) If to the Option Holder, at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx
00000, or at such other address as may have been furnished to the Company by
the Option Holder.
Any such notice shall be deemed to have been given as of the date so mailed in
the case of mailed notice, or as of the date delivered in the case of personal
delivery.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
UNIQUE MOBILITY, INC.
By:/s/ Xxxxxx X. French
Xxxxxx X. French, Treasurer
OPTION HOLDER
/s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
