Non-Qualified Stock Option Agreement
Exhibit
10.1
SmartVideo
Technologies, Inc., a Delaware corporation (the “Company”), hereby grants this
18
day of
July
18,
2005,
2005
to
Xxxxxx
X. Xxxxxxx,
Xx. (“Director”),
an option to purchase a maximum of 250,000
(Two Hundred Fifty Thousand)
shares
of the Company’s common stock, par value $.001 per share,
at the
price of $0.90
per
share (“Option Price”), on the following terms and conditions:
1. Grant
Under 2004 Equity Incentive Plan.
This
option is granted pursuant to and is governed by the
Company’s 2004 Equity Incentive Plan (the “Plan”), as amended, and, unless the
context otherwise requires, terms used herein shall have the same meaning
as in
the Plan. Determinations made in connection with this option pursuant to
the
Plan shall be governed by the
Plan
as it exists on this date.
2. Xxxxx
as Non-Qualified Stock Option; Other Options.
This
option is a non-statutory stock option and is not intended to qualify as
an
Incentive Stock Option under Section 422A of the Internal Revenue Code of
1986
(the “Code”). This option is in addition to any other options heretofore or
hereafter granted to the Director by the
Company, but a duplicate original of this instrument shall not effect the
grant
of another option.
3. Extent
of Option if Employment Continues.
Unless
the vesting of the option accelerates as provided below in this Section 3,
if
the Director has continued to be employed by the Company on the following
dates,
the Director may exercise this option for the number of shares set opposite
the
applicable date:
Vesting
Schedule:
Options
vest over two (2) years at 12.5% or 31,250
Option
Shares per Quarter for an aggregate amount of 50% or 125,00
Option
Shares Annually. A detailed Vesting Schedule is attached as Exhibit
A.
Upon
a
Change in Control (as such term is defined in the Plan), all of the unvested
option will accelerate and be exercisable for a period of twenty (20) days
immediately prior to the scheduled consummation of a Change in Control;
provided, however, that any such acceleration and any exercise of the option
during such five (5) day period shall be (i) conditioned on the consummation
of
the Change in Control and (ii) effective only immediately before the
consummation of the Change in Control.
Upon
consummation of any Change in Control, the Plan and any outstanding portion
of
the option that remains unexercised shall terminate. Notwithstanding the
foregoing, to the extent provision is made in writing in connection with
such
Change in Control for the continuation of the Plan and the assumption of
options
under the Plan theretofore granted, or for the substitution for such options
of
new options covering the stock of a successor company, or a parent or a
subsidiary thereof, with appropriate adjustments as to the number and kinds
of
shares or units and exercise prices, then the Plan and the option granted
hereunder shall continue in the manner and under the terms so provided, and
the
acceleration and termination provisions set forth in this Section 3 shall
be of
no effect. The Company will send written notice of a Change in Control to
the
Director not later than a time at which the Company gives notice thereof
to its
stockholders.
The
foregoing rights are cumulative and, while the Director continues to be employed
by the Company, may be exercised up to and including the date which is
10th
years
from the date this option is granted. All of the foregoing rights are subject
to
Sections 4 and 5, as appropriate, if the Director ceases to be employed by
the
Company or dies or suffers a Total Disability while in the employ of the
Company.
4. Termination
of Employment.
If the
Director ceases to be employed by the Company, other than by reason of death
or
Total Disability as defined in Section 5, no further installments of this
option
shall become exercisable and this option shall terminate after the passage
of
ninety (90) days from the date employment ceases, but in no event later than
the
scheduled expiration date. In such a case, the Director’s only rights hereunder
shall be those which are properly exercised before the termination of this
option.
5. Death;
Total Disability.
If the
Director dies while in the employ of the Company, this option may be exercised,
to the extent of the number of shares with respect to which the Director
could
have exercised it on the date of his death, by his estate, personal
representative or beneficiary to whom this option has been assigned pursuant
to
Section 10, at any time within one year after the date of death, but not
later
than the scheduled expiration date. If the Director suffers a Total Disability
(as defined in the Plan), this option may be exercised, to the extent of
the
number of shares with respect to which he could have exercised it on the
date of
the Director’s Total Disability, at any time within one year after the date of
the Director’s Total Disability, but not later than the scheduled expiration
date. At the expiration date of such one year period or the scheduled expiration
date, whichever is the earlier, this option shall terminate and the only
rights
hereunder shall be those as to which the option was properly exercised before
such termination.
6. Partial
Exercise.
Exercise of this option up to the extent above stated may be made in part
at any
time and from time to time within the above limits.
7. Payment
of Option Price.
Payment
of the purchase price for options exercised by the Director shall be made:
(i) in United States dollars in cash or by check, (ii) with the consent
of
the Company, through delivery of shares of Common Stock having a fair
market value as of the date of the exercise equal to the cash exercise price
of
the options, (iii) any other form of payment acceptable to the Company,
or
(iv) any combination of subparagraphs 7(i), 7(ii) and 7(iii).
8. Agreement
to Purchase for Investment.
By
acceptance of this option, the Director agrees that a purchase of shares
under
this option will not be made with a view to their distribution, as that term
is
used in the Securities Act of 1933, as amended, unless in the opinion of
counsel
to the Company such distribution is in compliance with or exempt from the
registration and prospectus requirements of that Act, and the Director agrees
to
sign a certificate to such effect at the time of exercising this option and
agrees that the certificate for the shares so purchased may be inscribed
with a
legend to ensure compliance with the Securities Act of 1933.
9. Method
of Exercising Option.
Subject
to the terms and conditions of this Agreement, this option may be exercised
by
prior written notice to the Company, at the principal executive office of
the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares
in
respect of which it is being exercised and shall be signed by the person
or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver
a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Director and if the Director shall so request
in the notice exercising this option, shall be registered in the name of
the
Director and another person jointly, with right of survivorship) and shall
be
delivered as provided above to or upon the written order of the person or
persons exercising this option. In the event this option shall be exercised,
pursuant to Section 5 hereof, by any person or persons other than the Director,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this option. All shares that shall be purchased
upon the exercise of this option as provided herein shall be fully paid and
non-assessable.
10. Option
Not Transferable.
This
option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Director’s lifetime only the Director can
exercise this option.
11. No
Obligation to Exercise Option.
The
grant and acceptance of this option imposes no obligation on the Director
to
exercise it.
12. No
Rights as Stockholder until Exercise.
The
Director shall have no rights as a stockholder with respect to shares subject
to
this Agreement until a stock certificate therefor has been issued to the
Director and is fully paid for. Except as is expressly provided in the Plan
with
respect to certain changes in the capitalization of the Company, no adjustment
shall be made for dividends or similar rights for which the record date is
prior
to the date such stock certificate is issued.
13. Withholding
Taxes.
The
Director xxxxxx agrees that the Company may withhold from the Director’s wages
the appropriate amount of federal, state and local withholding taxes
attributable to the Director’s exercise of this Non-Qualified Stock Option. At
the Company’s discretion, the amount required to be withheld may be withheld in
cash from such wages, or (with respect to compensation income attributable
to
the exercise of this option) in kind from the Common Shares otherwise
deliverable to the optionee on exercise of this option. The Director further
agrees that, if the Company does not withhold an amount from the Director’s
wages sufficient to satisfy the Company’s withholding obligation, the Director
will reimburse the Company on demand, in cash, for the amount under
withheld.
14. Lock-up
Agreement.
The
Director agrees that the Director will not, for a period of at least ninety
(90)
days following the effective date of the Company’s distribution of securities in
an underwritten public offering to the general public pursuant to a registration
statement filed with the Securities and Exchange Commission, directly or
indirectly, sell, offer to sell or otherwise dispose of the shares purchased
upon the exercise of the options granted hereunder other than any such shares
which are included in such public offering.
15. Provision
of Documentation to Director.
By
signing this Agreement the Director acknowledges receipt of a copy of this
Agreement and a copy of the Plan.
16. Governing
Law.
This
Agreement shall be governed by and interpreted in accordance with the internal
laws of the State of Delaware.
IN
WITNESS WHEREOF, the Company and the Director have caused this instrument
to be
executed as of the day and year first above written, and the Director whose
signature appears below acknowledges receipt of a copy of the Plan and
acceptance of an original copy of this Agreement.
| OPTIONEE: | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx, Xx. | |
|
Name: Xxxxxx
X. Xxxxxxx,
Xx.
Address: 000
Xxxxxx Xxxx
Xxxxxxxx,
XX 00000,
X.X.X.
|
||
| SMARTVIDEO TECHNOLOGIES, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxx, Xx. | |
|
Name: Xxxxxxx
X. Xxxxxxx, Xx.
Title: President
& CEO
|
||
EXHIBIT
A
|
Name
of Director (the “Director”):
|
Xxxxxx
X. Xxxxxxx,
Xx.
|
|
Date
of this option grant:
|
July
18, 2005
|
|
Number
of shares of the Company’s Common Stock subject to this option
(“Option
Shares”):
|
250,000
(Two Hundred Fifty Thousand)
|
|
Option
exercise price per share: $0.90
|
Vesting
Start Date: July
18, 2005
|
|
Percent
of Shares Vesting Annually: 50
%
|
Number
of Shares Vesting Annually: 125,00
|
Vesting
Schedule
| Vesting Date | Shares Vested Percent Vested |
|
July
18, 2005
|
31,250 12.5
%
|
|
October
18, 2005
|
31,250 12.5
%
|
|
January
18, 2006
|
31,250 12.5
%
|
|
April
18, 2006
|
31,250 12.5
%
|
|
July
18, 2006
|
31,250 12.5
%
|
|
October
18, 2006
|
31,250 12.5
%
|
|
January
18, 2007
|
31,250 12.5
%
|
|
April
18, 2007
|
31,250 12.5
%
|
