EXHIBIT 10.19
COMPETITIVE TECHNOLOGIES, INC.
1997 EMPLOYEE'S STOCK OPTION AGREEMENT
AGREEMENT made as of June 17, 2002, between COMPETITIVE
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and
Xxxx X. Nano ("Grantee" or "Optionee").
WHEREAS, the Company has in effect a 1997 Employees' Stock
Option Plan, as amended January 18, 2002 (the "Plan"), and all
provisions of the Plan are incorporated by reference into this
Agreement and all defined terms in the Plan will have the same
meaning when used in this Agreement; and
WHEREAS, Grantee is now or concurrently herewith will become
employed by the Company in a key employee capacity, and it is in
the best interests of the company that Grantee be offered an
opportunity to acquire stock ownership in the Company; and
WHEREAS, pursuant to the Plan, the Compensation Committee of
the Board of Directors (the "Committee"), has determined that a
stock option, to be partly an Incentive Option and partly a
Nonstatutory Option, as detailed in this Agreement, should be
granted to Grantee under the Plan on the terms stated herein;
NOW, THEREFORE, the Company hereby grants to Grantee the
right to purchase 300,000 shares of the Company's Common Stock
("Stock") on the following terms and conditions:
1. Grant and Option Price. Subject to Paragraph 10 below,
this is an Incentive Option with respect to 186,044 shares of
Stock and is a Nonstatutory Option with respect to all remaining
shares of Stock subject to this Option. Subject to adjustment as
provided in Paragraph 6 hereof, the per share option price at
which the shares of Stock shall be purchased shall be $2.15 per
share, which is not less than 100% of the per share fair market
value of the Stock on the grant date.
2. Vesting and Period of Exercise.
(a) This option will vest and the Optionee may exercise
this option as follows:
Incentive Option NonStatutory Option
i) 46,511 on June 17, 2003 28,489 on June 17, 2003
ii) 46,511 on June 17, 2004 28,489 on June 17, 2004
iii) 46,511 on June 17, 2005 28,489 on June 17, 2005
iv) 46,511 on June 17, 2006 28,489 on June 17, 2006
(b) In addition, and subject to the various provisions of
Paragraph 8 of Grantee's Employment Agreement attached hereto as
Appendix A (the "Employment Agreement"), this option will vest
and become exercisable as of the date of the Optionee's death, or
the date the Optionee becomes disabled within the meaning of
Section 8.b. of the Employment Agreement, regardless of whether
Optionee is a Disabled Optionee.
(c) In addition, and subject to the various provisions of
Paragraph 8 of Grantee's Employment Agreement, in the event of
Optionee's resignation of "Good Reason," within the meaning of
Section 8.d. of the Employment Agreement, or Optionee's
Termination without Cause, within the meaning of Section 8.f. of
the Employment Agreement, this option will continue to vest and
become exercisable through the date that is six months following
the employment termination date or, if later, the anniversary
date of this Agreement next following the date of resignation or
termination.
(d) In the event of Optionee's termination without Cause in
conjunction with a Change in Control, all as provided in Section
8.g. of the Employment Agreement, this option will vest and
become exercisable.
(e) Optionee may exercise this option, once vested, in
minimum purchases of 100 whole shares until termination under
Paragraph 3 hereof.
3. Termination of Option. Upon the date that any one of
the events specified below first occurs, this option shall
terminate to the extent and at the times provided.
(a) Upon the expiration of ten years from the date hereof
("the Expiration Date"), this option shall terminate as
to the then unexercised portion.
(b) If Grantee dies while employed by the Company, all
outstanding and exercisable Options held by Grantee at
the time of his death shall be exercisable by the
person or persons entitled to do so under the Grantee's
Will, if any, or by his legal representative at any
time before the earlier of (1) the Expiration Date of
this option or (2) one year after the date of Grantee's
death. Thereafter, this option shall terminate as to
the then unexercised portion.
(c) If Grantee's employment terminates on account of
disability, within the meaning of Section 8.b. of the
Employment Agreement, all outstanding and exercisable
Options held by Grantee at the employment termination
date shall be exercisable before the earlier of (1) the
Expiration Date of this option or (2) one year after
the employment termination date. Thereafter, this
option shall terminate as to the then unexercised
portion.
(d) If Grantee's employment is terminated by the Company without
Cause or by the Grantee for Good Reason, within the meaning of
Section 8.f. or 8.d. of the Employment Agreement, all outstanding
and exercisable Options held by Grantee at the employment
termination date shall be exercisable before the earlier of (1)
the Expiration Date of this option or (2) one year after the
later of (A) the end of the Severance Benefit Period, within the
meaning of Section 8.k. of the Employment Agreement, or (B) the
next employment anniversary date for Grantee which would have
occurred following the employment termination date (had Grantee's
employment not terminated). Thereafter, this option shall
terminate as to the then unexercised portion.
(e) If Grantee's employment is terminated by the Company
without Cause in conjunction with a Change in Control,
within the meaning of Section 8.g. of the Employment
Agreement, all outstanding and exercisable options held
by Grantee at the employment termination date shall be
exercisable before the earlier of (1) the Expiration
Date of this option or (2) one year after the end of
the Change in Control Benefit Period as defined in
Section 8.1. of the Employment Agreement. Thereafter,
this option shall terminate as to the then unexercised
portion.
(f) If Grantee resigns for any reason not specified above,
or retires under any retirement plan of the Company,
all outstanding and exercisable options held by Grantee
at the employment termination date shall be exercisable
before the earlier of (1) the Expiration Date of this
option or (2) three months after the date Grantee's
employment or service terminates. Thereafter, this
option shall terminate as to the then unexercised
portion.
(g) If Grantee's employment is terminated by the Company
for Cause, within the meaning of Section 8.e. of the
Employment Agreement, all outstanding stock Options
held by the Grantee at the time of such termination
shall automatically terminate unless the Committee
notifies the Grantee in writing that his Options will
not terminate.
For purposes of this Paragraph 3,
(i) employment by a subsidiary or parent of the Company shall be
deemed employment by the Company,
(ii) the Grantee's employment shall not be considered
terminated by an authorized leave of absence for a
period not exceeding ninety days, or a longer period,
if Grantee is entitled by contract or applicable law
to continue in the employ of the Company, and
(iii) the Committee in its discretion shall determine which
Sub-paragraph of Section 8 of the Employment Agreement governs
Grantee's termination of employment and the Committee's
determination shall be final and binding.
4. Non-Transferability. During the lifetime of Grantee,
this option may be exercised only by Grantee. This option shall
not be assignable or transferable, except by will or the laws of
descent and distribution.
5. Confidential and Proprietary Information, Etc.
Following termination of Grantee's employment with the Company,
it shall be a condition precedent to the exercise of any options
that remain exercisable after such termination that Grantee not
be in material breach of any of the provisions of Sections 10,
11, 12 and 13 of the Employment Agreement that apply to conduct
by the Grantee subsequent to termination of employment, which
breach, after written notice by the Company of such breach, is
not cured within ten (10) days of such notice, all as determined
by the Board of Directors of the Company in its reasonable
discretion.
6 Change in Shares. If any change is made in the
Company's outstanding shares of Stock, appropriate adjustment,
disregarding fractional shares, shall be made to the kind and
number of shares subject to this option, and to the option price
therefor, as provided in Section 9 of the Plan. The determination
by the Committee of such changes to the shares subject to this
option and the price therefor shall be final and binding on
Optionee.
7. Corporate Reorganizations. Notwithstanding anything
contained herein to the contrary, the unexercised options granted
hereunder shall lapse at the time(s) and to the extent provided
in Section 15 of the Plan.
8. Compliance With Securities Laws. As a condition to
exercise of this option, Optionee shall agree:
(a) that Optionee will purchase any shares hereunder for
Optionee's own account for investment and not with any present
intention to resell or distribute the same, and upon any exercise
of this option, Optionee shall sign and deliver to the Company a
certificate to such effect;
(b) that Optionee will not, directly or indirectly, sell,
transfer, assign, pledge, hypothecate or otherwise
dispose of any such shares unless the sale, transfer,
assignment, pledge, hypothecation or other disposition
of the shares is pursuant to the provisions of the Plan
and effective registrations under the Securities Act of
1933, as amended, and any applicable state or foreign
securities laws or pursuant to appropriate exemptions
from any such registrations; and
(c) that Optionee will execute such other documents,
including but not limited to any stock restriction
agreement, as the Committee determines, in its sole
discretion, to be necessary to comply with any
applicable laws or regulations relating to the sale of
securities. If the Committee determines, in its sole
discretion, that the statement of Optionee mentioned
above is not necessary to protect adequately both the
Company and Optionee under applicable federal and state
securities laws, it shall promptly notify Optionee of
such determination. Upon receipt of such notice from
the Committee, the statement of Optionee required by
this paragraph shall not be prerequisite to future
purchases of stock under outstanding options and any
such statements made by Optionee prior thereto shall,
to the extent provided in such notice, be automatically
rescinded.
9. Method of Exercise. Optionee shall exercise this
option by delivering to the Secretary of the Company at its
principal place of business (a) a signed written notice
specifying the number and type (Incentive or Nonstatutory) of
shares to be purchased, containing a statement which obligates
Optionee to all of the terms and conditions set forth herein and,
if required, also containing the statements referred to in
Paragraph 8 hereof, in form satisfactory to counsel for the
Company, and (b) cash, check, bank draft or money order payable
to the order of the Company in the full amount of the purchase
price for such shares, or in lieu of such cash, check, bank draft
or money order, Optionee may make payment in whole or in part by
tendering to the Company a certificate or certificates for shares
of Common Stock of the Company, which shares shall have been
owned by the Optionee or the Optionee's representative for at
least six months prior to the exercise date, valued at fair
market value on the exercise date, duly endorsed by the Optionee
or accompanied by a stock assignment duly executed by the
Optionee, with signatures guaranteed. Subject to the provisions
of Paragraph 10 of the Plan regarding listing of shares purchased
hereunder, the Company shall, within ten (10) business days after
receipt of the foregoing, deliver or cause to be delivered to
Optionee a certificate or certificates representing the shares
purchased.
10. Incentive Option. Optionee agrees that
(a) To the extent that (i) any portion of this option
originally granted as an Incentive Option is exercised
more than three (3) months (or such longer period as
may be provided by Section 422(a) of the Code) after
the date of the termination of Optionee's employment
for any reason other than death, or (ii) any
acceleration of the vesting of the option causes the
Incentive Option to violate Section 5(f) of the Plan,
such portion of the option shall automatically be
treated as a Nonstatutory Option; provided, however,
that if Optionee is a Disabled Optionee, then such
three (3) month period referred to above shall be
extended to one (1) year (or such longer period as may
be provided by Section 422(c)(6) of the Code).
(b) If and to the extent that this is an Incentive Option,
then if shares acquired on any exercise of this option
are disposed of within two years from the date of the
granting of this option or within one year after the
transfer of such shares to Optionee, Optionee will give
the Company prompt written notice stating the date of
such disposition and the amount realized upon such
disposition.
11. Miscellaneous. The Optionee hereby acknowledges
receipt of a copy of the Plan document and agrees to be bound by
all terms and provisions thereof and as the same may be amended
from time to time in accordance with the terms thereof. The
Optionee further acknowledges and agrees that in the event of any
conflict herewith, the provisions of the Plan shall govern and
control, and this Agreement or the applicable provision hereof
will automatically be deemed modified to conform ab initio. This
Agreement together with Appendix A and the Plan constitute the
entire agreement and understanding between the Company and the
Optionee and may not be changed, modified or amended by oral
statements to the contrary, but only by written document signed
by both parties hereto. This Agreement will be binding on and
inure to the benefit of the parties hereto, and their respective
heirs, legatees, successors and assigns. This Agreement will be
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, on the date specified above, the Company
has granted and the Optionee has accepted, each by its execution
of this Agreement, this option.
COMPETITIVE TECHNOLOGIES, INC.
By: /s/Xxxxx X. XxXxxx, Xx.
ATTEST:
/s/Xxxxxx Xxxxxxxxx
OPTIONEE:
/s/Xxxx X. Nano
