LITHIUM TECHNOLOGY CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
[FOR GRANTS TO NON-EMPLOYEES - DIRECTORS AND CONSULTANTS]
LITHIUM TECHNOLOGY CORPORATION, a Delaware corporation (the
"Company"), hereby grants to _______ (the "Optionee"), a Non-Qualified Stock
Option (the "Option") to purchase a total of _______ shares of the Company's
Common Stock, at the price set forth herein, and subject to the terms,
definitions and provisions of the 2002 Stock Incentive Plan (the "Plan")
adopted by the Company, which is incorporated herein by reference. The terms
defined in the Plan shall have the same defined meanings herein.
1. NATURE OF THE OPTIONS. The Option is a non-qualified stock
option. The shares underlying the Option are hereinafter referred to as the
"Shares".
2. EXERCISE PRICE. The exercise price of the Option is $
per share for each share subject to the Option.
3. TERMS OF OPTIONS. Subject to provisions contained elsewhere
in this Agreement, the Option may be exercised cumulatively as set forth below
after the vesting date set forth below, until the day preceding the tenth
anniversary of the date hereof (the "Termination Date"):
VESTING DATE NUMBER OF OPTIONS
4. ADMINISTRATION. The Plan is administered by a committee of
the Board (the "Committee" as defined in the Plan). All determinations and
acts of the Committee as to any matters concerning the Plan, including
interpretations or constructions of this Option and of the Plan, shall be
conclusive and binding on the Optionee and any parties claiming through the
Optionee.
5. EXERCISE. The right of the Optionee to purchase Shares
hereunder, subject to any installment requirements set forth above, may be
exercised in whole or in part at any time after the accrual of such respective
installment and prior to the Termination Date, except as otherwise provided
herein. The Option may not be exercised for a fraction of a share.
Notwithstanding the foregoing, the Optionee's right to exercise the Option
shall be subject to Shareholder approval of the plan, and shall be limited by
the number of shares of Company Common Stock available for issuance pursuant
to Awards granted under the Plan.
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6. NOTICE OF EXERCISE. The Option shall be exercisable by
written notice (the "Notice") which shall state the election to exercise the
Option and the number of Shares in respect of which the Option is being
exercised, and such other representations and agreements as to the Optionee's
investment intent with respect to such Shares as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail
to the Secretary of the Company. The written notice shall be accompanied by
payment in full of the exercise price in cash, or in any other manner approved
by the Committee, including payment by surrender of shares of Common Stock of
the Company at their fair market value on the date of delivery.
7. DELIVERY OF CERTIFICATES. As soon as practicable after
receipt of the Notice and payment, and subject to the next two paragraphs, the
Company shall, without transfer or issue tax or other incidental expense to
the Optionee, deliver to the Optionee a certificate or certificates for the
shares of Common Stock so purchased. Such delivery shall be made (a) at the
offices of the Company at 0000 Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx
00000, (b) at such other place as may be mutually acceptable to the Company
and the Optionee, or (c) by certified mail addressed to the Optionee at the
Optionee's address shown in the records of the Company.
8. WITHHOLDING. The Company shall have the right to withhold an
appropriate number of shares of Common Stock (based on the fair market value
thereof on the date of exercise) for payment of taxes required by law or to
take such other action as may be necessary in the opinion of the Company to
satisfy all tax withholding obligations.
9. COMPLIANCE WITH LAWS. The Company may postpone the time of
delivery of certificate(s) for shares of Common Stock for such additional time
as the Company shall deem necessary or desirable to enable it to comply with
the requirements of any securities exchange upon which the Common Stock may be
listed, or the requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any rules or regulations of the
Securities and Exchange Commission promulgated thereunder, or any applicable
state laws relating to the authorization, issuance or sale of securities.
10. DEATH OF OPTIONEE. The terms of this Option Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns
of Optionee. In the event of the death of Optionee during the term of the
Option, the Option may be exercised, at any time within thirty-six (36) months
unless otherwise provided in an agreement with the Company following the date
of death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance but only to the extent of the
right to exercise that had accrued at the date of death. If Optionee's estate
or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise such portion of Optionee's Option which has
vested and which the Optionee was entitled to exercise in the time specified
herein, the Option shall terminate.
11. FAILURE TO PAY. If, upon tender of delivery thereof, the
Optionee fails to accept delivery of and pay or have paid for all or any part
of the number of shares of Common Stock specified in the Notice, the
Optionee's right to exercise this Option with respect to such undelivered and
unpaid for shares may be terminated by the Company.
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12. RESTRICTIONS ON TRANSFER OF SHARES UNDERLYING OPTIONS.
The issuance of the Shares subject hereto and upon the exercise of
the Option and the transfer or resale of such Shares shall be subject to such
restrictions as are, in the opinion of the Company's counsel, required to
comply with the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, and the certificate(s) representing such
shares shall, if it is deemed advisable by the Company's counsel, bear a
legend to such effect.
13. NO RIGHTS OF SHAREHOLDER. Neither the Optionee nor any
person or persons entitled to exercise the Optionee's rights under this Option
in accordance herewith shall have any rights to dividends or to Common Stock
subject to this Option, except to the extent that a certificate for such
shares shall have been issued upon the exercise of this Option as provided
herein.
14. TERMINATION OF ASSOCIATION.
(a) If Optionee's association with the Company or its direct or
indirect subsidiaries terminates for any reason other than by reason of death
or disability or "for cause" as defined in Paragraph 14 (b) below, all
currently exercisable installments of this Option shall remain exercisable for
a period of sixty (60) months unless otherwise provided in an agreement with
the Company from the date of termination and, to the extent not exercised,
shall terminate. All other non-vested installments of this Option shall
immediately and automatically terminate.
(b) If Optionee's association with the Company or its direct or
indirect subsidiaries terminates by virtue of a termination for cause (as
defined in Optionee's Consulting Agreement, if applicable or as set forth
below), the Committee shall have the right to terminate the Option, upon the
date of termination of association, whether vested or not, in their sole
discretion, without prior notice to Optionee. If Optionee is not affiliated
with the Company pursuant to a Consulting Agreement as of the date of
termination, cause shall mean the substantial breach or continuous neglect by
Optionee of his obligations, or willful misconduct by Optionee in the
performance of such obligations which occurs or persists after notice and an
opportunity to cure.
15. DISABILITY OF OPTIONEE. If Optionee is unable to continue
his association with the Company as a result of his disability (as such
condition is defined in the Plan) Optionee may, but only within thirty-six
(36) unless otherwise provided in an agreement with the Company from the date
of disability, exercise such portion of the Option which has vested to the
extent he was entitled to exercise it at the date of such disability, and such
portion of the Option which has not vested shall terminate. If Optionee does
not exercise such portion of the Option which has vested and which Optionee
was entitled to exercise within the time specified herein, the Option shall
terminate.
16. NON-DILUTION. In the event of any change in the outstanding
Common Stock by reason of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger or similar event, the
Committee may adjust proportionally (a) the number of shares of Stock (i)
available for issuance under the Plan and (ii) covered by outstanding Awards
denominated in stock or units of stock; (b) the exercise and grant prices
dated to outstanding Awards; and (c) the appropriate Fair Market Value and
other price determinations for such Awards as the Committee in its sole
discretion may in good faith determine to be equitably required in order
prevent dilution or
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enlargement of the rights of Participants. Moreover, in the event of any such
transaction or event, the Committee may provide in substitution for any or all
outstanding Awards under the Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require
in connection therewith the surrender of all Awards so replaced. The Committee
may also make or provide for such adjustments in the number of Shares
specified in Section 3 of the Plan as the Committee in its sole discretion may
in good faith determine to be appropriate in order to reflect any such
transaction or event. In the event of any other change affecting the Common
Stock or any distribution (other than normal cash dividends) to holders of
Common Stock, such adjustments in the number and kind of shares and the
exercise, grant and conversion prices of the affected Awards as may be deemed
equitable by the Committee, including adjustments to avoid fractional shares,
shall be made to give proper effect to such event. Upon the occurrence of a
"change in control", as defined in the Plan, of the Company, each Option shall
at the discretion of the Committee either be cancelled in exchange for a
payment in cash of an amount equal to the excess, if any, of the Change in
Control Price over the exercise price for such Option, or be fully exercisable
regardless of the exercise schedule otherwise applicable to such Option and
all restricted shares of Stock and all SARs shall become nonforfeitable and be
immediately transferable or payable, as the case may be, subject however to
Paragraph 9(b) of the Plan. In the event of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation
not constituting a change in control, the Committee may terminate this Option,
authorize the assumption of this Option or substitute a new stock option for
this Option, whether or not in a transaction to which Section 424(a) of the
Internal Revenue Code applies. The judgment of the Committee with respect to
any matter referred to in this paragraph shall be conclusive and binding upon
the Optionee and any parties claiming through the Optionee.
17. REGISTRATION ON FORM S-8. The Company hereby agrees that in
the event that during the term Options are exercisable, the Company causes to
be filed with the Securities and Exchange Commission a registration statement
on Form S-8 (or equivalent form as may be in effect at such time) the Optionee
may include in such registration statement all shares underlying options
granted to Optionee under the Plan. The Company covenants that it will keep
such registration statement current and effective while the Optionee or his
guardian or estate has the right to exercise any of the options granted
hereunder. The Company also hereby agrees that in the event that during the
term the Company causes to be filed with the Securities and Exchange
Commission a registration statement on a form other than Form S-8, Optionee
shall have "piggyback" registration rights to include in such registration
statement all the options and shares underlying options granted to Optionee
under the Plan, subject to a reasonable cutback in the inclusion of such
options and shares if the Board or the Company's underwriter determines that
such cutback is necessary to prevent an adverse effect on the Company's
offering.
18. NOTICES. Each notice relating to this Option shall be in
writing and delivered in person or by certified mail to the proper address.
All notices to the Company shall be addressed to it at its offices at 0000
Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000, attention of the
Committee, c/o the Company's Secretary. All notices to the Optionee or other
person or persons then entitled to exercise any rights with respect to this
Option shall be addressed to the Optionee or such other person or persons at
the Optionee's address shown in the records of the Company or the location at
which the Optionee is employed by the Company. Anyone to whom a notice may be
given under this Option may designate a new address by notice to that effect.
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19. GOVERNING LAW. This Option and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by the
Internal Revenue Code of 1986, as amended from time to time, or the securities
laws of the United States, shall be governed by and construed under the laws
of the State of Delaware.
IN WITNESS WHEREOF, LITHIUM TECHNOLOGY CORPORATION has caused this
Option to be executed by its officers as of the ___ day of ________.
LITHIUM TECHNOLOGY CORPORATION
By:
--------------------------------
Name:
Title:
ACCEPTED AND AGREED:
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