EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
September 26, 1997, by and between Grip Technologies, Inc., a California
corporation ("Company"), and Xxxxxx Xxxxxx, an individual ("Employee").
RECITALS
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A. The Company desires to employ Employee upon the terms and subject to
the conditions contained in this Agreement.
B. Employee desires to be hired and employed by the Company upon the terms
and subject to the conditions contained in this Agreement.
TERMS AND CONDITIONS
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NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
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agrees to be employed by the Company, as the Vice President-Sales & Marketing on
the terms and subject to the conditions set forth herein. Employee shall
perform such duties for the Company as may be assigned to him from time to time
by the executive officers or Board of Directors of the Company. Employee agrees
to devote all of his working time and effort to the performance of his duties
hereunder during normal business hours. Employee further agrees to perform his
duties hereunder in an efficient, faithful, loyal and business like manner and
to conduct himself at all times during the term of this Agreement in a manner
which does not damage or otherwise adversely reflect upon the business
reputation or integrity of the Company. The Company and Employee acknowledge
and agree that Employee is expressly directed and instructed not to bring, use
or employ any trade secrets or other proprietary or confidential information of
his prior employer in connection with the performance of his duties to the
Company hereunder.
2. Term and Termination.
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2.1 Term. The term of Employee's employment with the Company shall
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commence as October 6, 1997 ("Commencement Date") and, subject to the earlier
termination as provided in Section hereof, shall expire at the close of
business on September 30, 2002 ("Expiration Date").
2.2 Termination. Notwithstanding the Expiration Date set forth in
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Section hereof, the employment of Employee shall be terminated upon the
occurrence of any of the following events, to be effective as of the date
hereinafter specified, and the term of this Agreement shall thereupon terminate,
subject to the executory duties and obligations contained herein but in no event
shall the Company be obligated to pay or provide Employee any compensation or
other benefits beyond the date of termination:
(a) The Company may, at any time, immediately terminate Employee
for "just cause". For purposes hereof, "just cause" includes, but is not limited
to, misconduct, dishonesty, extended absences, violation of Company policies and
procedures, violation of any laws or Company policies or procedures regarding or
related to sexual harassment or discrimination in connection with his work or
another employee of the Company, improper disclosure of Confidential Information
(as that term is defined in Section below), or any material and continuing
failure of Employee to perform his duties under this Agreement (except as a
result of death or Total Disability). Any termination for "just cause" shall
become effective immediately upon written notice from the Company to Employee
describing, in reasonable detail, the events or circumstances allegedly
constituting "just cause".
(b) The death of Employee shall immediately terminate his
employment with the Company and this Agreement.
(c) The "Total Disability" of Employee shall terminate his
employment with the Company. For purposes of this Agreement, a condition of
"Total Disability" shall exist if Employee is unable or unwilling to perform his
duties hereunder, or it is determined by a medical doctor retained by the
Company that he would be unable to perform his duties hereunder, for a period of
at least three (3) consecutive months by reason of any medically determinable
physical or mental impairment. The termination shall be effective as of the date
it is first determined that Employee has suffered a total disability.
2.3 Terminable at Will Employment at Expiration of Term. The parties
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hereto agree that if this Agreement is not extended or superceded, in either
case by another written instrument, and Employee continues his employment with
the Company beyond the Expiration Date, then, from and after the Expiration Date
the employment of Employee shall be terminable at will at any time, with or
without reason or cause, irrespective of Employee's longevity, upon the giving
of sixty (60) days' prior written notice to the other party.
2.4 No Additional Rights Conferred. Except as expressly provided in
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this Agreement, nothing contained herein or in any other agreement concurrently
or subsequently entered into between the Company and Employee, such as Stock
Option Agreement(s), shall confer upon Employee any right with respect to the
continuation of his
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employment by the Company or interfere in any way with the right of the Company
to terminate his employment at any time or to increase or decrease the
compensation or other perquisites payable to Employee. The inclusion of this
Section in this Agreement is not a promise, inducement, covenant or
representation by the Company that it has agreed or will agree at any time in
the future to enter into any other or additional agreements with Employee with
respect to any matter.
3. Compensation.
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3.1 Signing Bonus. Upon execution of this Agreement, the Company
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agrees to pay Employee a signing bonus in the amount of $3,000 less all
applicable federal and state withholding taxes, F.I.C.A., unemployment and
disability premiums or payments and all other applicable payroll taxes.
3.2 Base Salary. As compensation for his employment hereunder,
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Employee shall receive from the Company a base salary of $100,000 per annum.
The base salary shall be paid semi-monthly in accordance with the Company's
usual payroll practices. The amount actually paid to Employee shall be the base
salary less all applicable federal and state withholding taxes, F.I.C.A.,
unemployment and disability premiums or payment and all other applicable payroll
taxes. Payment of Employee's base salary for the first twelve (12) months of
his employment will be guaranteed by Xxx X. Xxxxxxx pursuant to a separate
Guaranty, in the form attached hereto as Exhibit and incorporated herein by
this reference.
3.3 Bonuses. Employee will be entitled to receive bonuses in
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accordance with the bonus program described in Exhibit attached hereto and
incorporated herein by this reference.
4. Major Medical Health Program. Employee shall be entitled to
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participate in any major medical-health program or other group medical insurance
program in which the Company is enrolled at any time, or from time to time,
subject to the terms of the program or plan and any applicable waiting
probationary period and any pre-existing conditions.
5. Stock Options. On a date during calendar 1997 to be mutually agreeable
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between the Company and Employee, the Company will grant to Employee an
incentive stock option under the Company's 1994 Stock Option Plan covering
100,000 shares of Common Stock. On a date during calendar 1998 to be mutually
agreeable between the Company and Employee, the Company will grant to Employee
another incentive stock option under the Company's 1994 Stock Option Plan
covering an additional 100,000 shares of Common Stock. Each stock option shall
vest in equal amounts over a three-year period from the Commencement Date. The
exercise price for such stock options shall be the Fair
3
Market Value of shares of Common Stock of the Company on the date of grant. The
stock options shall be subject to the term of the Company's 1994 Stock Option
Plan, as amended, and separate Stock Option Agreements between the Company and
Employee, in the form attached hereto as Exhibit and incorporated herein by
this reference. In addition, Xxx X. Xxxxxxx, will xxxxx Employee the right and
option to purchase up to 100,000 shares of Common Stock of the Company pursuant
to the terms of that certain letter agreement, attached hereto as Exhibit and
incorporated herein by this reference.
6. Relocation Expense. The Company agrees to reimburse Employee for his
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reasonable moving expenses, in an amount estimated to be approximately $7,000.
7. Country Club. The parties acknowledge and understand that Employee's
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duties and responsibilities will involve meetings and contacts with customers
and prospective customers, and that access to a country club would facilitate
such meetings and contacts and would provide an appropriate venue for the golf-
related business of the Company. In furtherance thereof, the Company agrees to
purchase a corporate membership in Shadow Ridge Country Club, to permit Employee
to use such membership during the term of his employment and to pay Employee's
monthly dues therefor during the term of his employment.
8. Reimbursement for Expenses. The Company shall reimburse Employee, from
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and after the commencement of his employment, for his ordinary and necessary
business expenses incurred with respect to the business of the Company,
including reasonable expenses incurred for Company authorized travel, in
accordance with policies and procedures adopted by the Company from time to
time. In addition, the Company agrees to reimburse Employee for the use tax and
registration fee to initially register his automobile in California. Under no
circumstance will Employee be entitled to reimbursement of any expense unless
and until he submits complete and accurate substantiation of that expense,
together with a detailed explanation of the nature and purpose of the expense
and the person or persons involved.
9. Location. Employee understands that the principal executive offices of
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the Company are currently located in Irvine, California and that he will be
located at the Company's production facilities in Vista, California. The
Company may relocate either Employee or its production facilities to any other
location within Orange or San Diego counties as the Company may reasonably
determine. Employee approves in advance his initial location at Vista and any
such relocation.
10. Employees Manual. To the extent the Company has or at any time
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hereafter adopts an Employees Manual, or modifies its Employees Manual from time
to time, the
4
provisions of the Employees Manual, as so modified, are incorporated herein and
made a part of this Agreement and Employee hereby agrees to be bound by and to
comply with all of the terms, conditions, rules and regulations set forth
therein.
11. Tax Compliance Matters. The parties hereto agree that it shall be the
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responsibility of Employee to keep all appropriate records with respect to any
business related expenses incurred by Employee in connection with the
performance of his duties hereunder including the automobile allowance. It
shall be further understood and agreed that the Company, to the extent required
by applicable law, will report the payment or providing of any benefits or
perquisites to Employee in accordance with applicable laws and regulations and,
if required, will make appropriate payroll deductions with respect thereto. It
will be Employee's sole responsibility to report such benefits and perquisites,
to the extent applicable, as income. To the extent that Employee has not
accounted to the Company for any benefits or perquisites to enable the Company
to determine whether or not reporting or payroll deductions are appropriate, and
the Company later determines that reporting or deduction was appropriate, then
Employee agrees to indemnify and hold the Company harmless from and with respect
to any liability which the Company incurs in connection therewith, including,
without limitation, the tax-affected amount of the deduction and all penalties
and interest with respect thereto.
12. Covenant of Nondisclosure and Non-use.
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12.1 Confidential Information. Employee understands and acknowledges
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that he will be advised by the Company from time to time of certain matters, and
will be provided access to certain documents and information, which are trade
secrets or which the Company deems to be proprietary and confidential
("Confidential Information"), whether heretofore or hereafter obtained by
Employee while providing services to the Company, and whether or not Employee
assists the Company in the development of any such Confidential Information.
Employee agrees to maintain the confidentiality of any Confidential Information
provided to him in connection with the performance of his duties under this
Agreement; provided, however, such obligation shall terminate upon the
occurrence of any of the following: (i) where such information now or hereafter
becomes part of the public domain, and Employee has not obtained or learned such
information as a result of "misappropriation" or "improper means", as those
terms are defined in California Civil Code Section 3426.1; (ii) such information
is already in the possession of Employee at the time of the disclosure so long
as it was acquired otherwise than by "misappropriation" or "improper means";
(iii) such information hereafter comes into the possession of Employee from a
third party without breach of this covenant; or (iv) such information is
independently developed by Employee without otherwise violating this Agreement.
Notwithstanding any of the foregoing, under no circumstance will Employee use or
disclose any ideas, concepts,
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themes, inventions, designs, improvements and discoveries conceived, developed
or written by him pursuant to this Agreement or in connection with this
Agreement; all rights to which shall belong to the Company.
12.2 Return of Materials. Employee further agrees that at the
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termination or expiration of this Agreement, he will not take, without the prior
written consent of the Company, tangible manifestations of the Confidential
Information on any memoranda, notes (whether or not prepared by Employee during
the course of his engagement by the Company), extracts, summaries, plats,
sketches, plans, data, lists, manuals, schedules, forms, programs, tapes, disks
or other documents, papers, media or records of any kind relating to or used in
the Company's business, or any reproductions thereof.
12.3 Unfair Competition. Any violation of this Section shall be
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deemed to be unfair competition, in addition to any other rights or remedies
which the Company may have against Employee.
13. Nonsolicitation of Customers, Etc. During the term of this Agreement
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and for a period of one (1) year following its termination or expiration,
Employee agrees not to influence or solicit, or attempt to influence or solicit,
any of Company's customers, suppliers, vendors, lessees or any others having
business with the Company, either directly or indirectly, to divert their
business to any other person, firm or business similar to or in competition with
the Company.
14. Organizing Competitive Business. Employee agrees that during the term
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of this Agreement, Employee will not undertake the planning or organization of
any business activity similar to or competitive with the business of the
Company. Employee further agrees that he will not, for a period of one (1) year
following the termination of this Agreement, either directly or indirectly,
solicit any of the Company's employees to work for or with Employee, or his
affiliates, or any other corporation, entity or individual, in a business
similar to or competitive with the Company or to work for a competitor of the
Company.
15. Notices. All notices, requests, demands and other communications
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required or contemplated hereunder shall be in writing, shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, and shall be deemed to have been given upon the earlier of
(a) the date of personal delivery to the person to receive such notice at the
address indicated below or (b) if mailed to the person to receive such notice at
the address indicated below, four (4) business days after the date of posting by
the United States Post Office as evidenced by the execution of the return
receipt. The parties addresses, for all purposes hereof, are as follows:
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Company: Grip Technologies, Inc.
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
Employee: Xxxxxx Xxxxxx
00000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Notice of change of address shall be given by written notice but shall not be
deemed effective until it has been given in the manner detailed in this Section.
16. Applicable Law; Venue. This Agreement shall be governed by,
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interpreted under, and construed and enforced in accordance with the internal
laws, and not the laws pertaining to conflicts or choice of laws, of the State
of California applicable to agreements made and to be performed wholly within
the State of California. The sole forum for resolving disputes arising under or
relating to this Agreement shall be the Municipal and Superior Courts for the
County of Orange, California, or the Federal District Court for the Central
District of California and all related appellate courts, and the parties hereby
consent to the jurisdiction of such courts and agree that venue shall be in
Orange County, California; provided, however, if the Company relocates its
principal executive offices to another county within the State of California,
then the appropriate venue shall be the state or federal courts of such county.
17. Attorneys' Fees and Litigation Costs. If any suit, legal proceeding
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or other action is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party shall be
entitled to recover its or his reasonable attorneys' fees and other costs
incurred in such proceeding or action, in addition to any other relief to which
it or he may be entitled.
18. Waivers. No waiver of any breach or default hereunder, or of any
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condition precedent to the performance of any obligation hereunder, shall be
considered valid unless in writing and signed by the parties giving such waiver
or against whom such waive is to be enforced, and no such waiver shall be deemed
a waiver of any subsequent breach or default of the same or similar nature.
19. Partial Invalidity and Severability. If any provision of this
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Agreement shall be held or deemed to be, or shall, in fact, be inoperative or
unenforceable as applied in any particular case because if conflicts with any
other provision or provisions hereof or any constitution or statute or rule of
public policy, or for any other reason, such circumstances shall not have the
effect of rendering the provision in question inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision or
provisions herein
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contained invalid, inoperative or unenforceable to any extent whatsoever. The
invalidity of any one or more phrases, sentences, clauses, sections or
subsections of this Agreement shall not affect the remaining portions thereof.
20. Interpretation. The parties hereto acknowledge and agree that each
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has been given the opportunity to independently review this Agreement with legal
counsel, and has the requisite experience and sophistication to understand,
interpret and agree to the particular language of the provisions hereof. In the
event of any ambiguity in or dispute regarding the interpretation of this
Agreement, or any provision hereof, the interpretation of this Agreement shall
not be resolved by any rule providing for interpretation against the party who
causes the uncertainty to exist or against the party who is the draftsman of
this Agreement.
21. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
22. Entire Agreement; Amendment. This Agreement contains the entire
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understanding between the parties hereto with respect to the subject matter
hereof and supersedes any and all prior or contemporaneous written or oral
negotiations or agreements between them regarding the subject matter hereof. No
addition, modification or amendment of or to any term or provision of this
Agreement, or to this Agreement as a whole, shall be effective unless set forth
in writing and signed by all the parties hereto.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above mentioned.
GRIP TECHNOLOGIES, INC., a
California corporation
By: ____________________________ ________________________________
Xxx X. Xxxxxxx Xxxxxx Xxxxxx
President
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EXHIBIT A
Guaranty
September 26, 1997
Xx. Xxxxxx Xxxxxx
00000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Xxxxxx:
The purpose of this letter is to memorialize and confirm my commitment and
agreement to personally guaranty payment of $100,000 of your annual base salary
payable to you by Grip Technologies, Inc., a California corporation (the
"Company"), pursuant to your Employment Agreement during the first twelve (12)
months of your employment by the Company.
My commitment and agreement is as follows:
1. If the Company fails, refuses or is unable, for any reason, to pay
any portion of your annual base salary during the first twelve (12) months of
your employment by the Company, I will pay you your base salary at such time(s)
and in such amount(s) as the Company was obligated under the Employment
Agreement; provided, however, if your employment is terminated for cause or as
a result of your death or disability, or if you voluntarily terminate your
employment, then my guarantee immediately terminates and no further payment(s)
are due from me for any period following the date of such occurrence.
2. My maximum obligation to you is $100,000, and this maximum amount
decreases with each payment by the Company during the first twelve (12) months
of your employment by the Company in an amount equal to the amount actually
paid to you plus the amount of all employer payroll withholdings paid by the
Company.
3. If the Company terminates your employment without cause during the
first twelve months of your employment, and subsequently during the remaining
portion of
A-1
Xx. Xxxxxx Xxxxxx
September 26, 1997
Page 2
that twelve (12) month period you are employed or are hired as a consultant,
then my guarantee immediately terminates and no further payment(s) are due from
me for any period following the date of such occurrence.
If the foregoing is acceptable to you, please indicate your agreement by
dating and signing the enclosed copy of this letter and returning it to me at
your earliest convenience.
Very truly yours,
Xxx X. Xxxxxxx
SGL/cm
Agreed to and accepted on
September 26, 1997
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Xxxxxx Xxxxxx
A-2
EXHIBIT B
Bonus Program
The Company agrees to pay Employee the following bonuses:
1. For all new sales generated by Employee during the initial term of
his Employment Agreement with the Company, Employee shall be paid a bonus equal
to two percent (2%) of the first year's sales and one percent (1%) of the second
year's sales. Such bonuses are payable within forty-five (45) days following
the end of each fiscal quarter of the Company. For purposes hereof, the term
"new sales generated by Employee" means the net amount paid to the Company from
sales of golf grips generated by Employee to new customers, or to existing
customers for new product lines, if said new product lines are in addition to
existing product lines rather than substitutions for existing product lines.
For purposes hereof, a customer is a new customer if the Company is not
presently doing business with, and has not done business with that customer
during the past twelve (12) months (determined from the date of the Employment
Agreement), or is not actively involved with such customer (determined as of the
date of the Employment Agreement) in the development of a product for such
customer.
2. In addition to the foregoing, Employee shall be paid a bonus equal
to one percent (1%) of all golf grip sales in excess of $5.5 million in each
fiscal year of the Company, payable annually following completion and release of
the Company's audited annual financial statements.
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EXHIBIT C
Stock Option Agreement
INCENTIVE STOCK OPTION AGREEMENT ISO-_____
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made and
entered into on ___________________________________, 1997, by and between Grip
Technologies, Inc., a California corporation ("Company") and Xxxxxx Xxxxxx
("Optionee").
1. Grant of Option. The Company hereby irrevocably grants to the
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Optionee, on the terms and subject to the conditions set forth in this
Agreement and subject to the terms and conditions of the Company's 1994
Stock Option Plan, as amended ("Plan"), the right the option ("Option") to
purchase all or any part of an aggregate of 100,000 shares ("Option Shares")
of the Company's common stock, such number being subject to adjustment as
provided in Section hereof. It is understood by the parties hereto that the
Option is intended to qualify as an "incentive stock option" within the
meaning of Section 422A of the Internal Revenue Code of 1986, as amended
(the "Code"). It is further understood by the parties hereto that the Option
has been granted as a matter of separate inducement and agreement in
connection with the employment of the Optionee and is not in lieu of any
salary or other compensation for the Optionee's services.
2. Option Price. The Option Price for the Option Shares shall be $_______
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per share. The Option Price shall be paid in full as provided in Section
10 hereof.
3. Term of Option. The term of the Option shall be for a period of
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five (5) years from _________________________________, 1997, subject to
earlier termination as provided in Sections and hereof.
4. Exercisability of Option.
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(a) Subject to the provisions of Section (b) hereof, the Option shall
be exercisable in accordance with the following schedule:
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Number of Option
Date Shares Purchasable
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On or after October 6, 1998 33,333
On or after October 6, 1999 additional 33,333
On or after October 6, 2000 additional 33,334
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TOTAL 100,000
The Optionee's right to exercise the Option shall be cumulative as to the Option
Shares covered thereby.
(b) The Company's grant of the Option is based upon the assumption
that the Optionee's exercise of the Option and the Company's issuance of the
Option Shares as a result of such exercise will be exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"). In the
event that the Company's assumption is erroneous, the Option may not be
exercised unless and until a registration statement under the Securities Act
relating to the Option Shares shall be in effect, or unless and until the
issuance of the Option Shares upon the exercise of the Option shall be exempt
from registration under the Securities Act, in either of which events the term
of the Option shall be deemed to have been automatically extended through and
including a period of ninety (90) days from and after the date that such
registration statement under the Securities Act relating to the Option Shares
first becomes effective or the date that the issuance of the Option Shares upon
the exercise of the Option first becomes exempt from registration under the
Securities Act, as the case may be. In this regard, the Company shall use its
best efforts to either register the Option Shares in accordance with the
registration requirements of the Securities Act or to comply with any exemption
therefrom with regard to the issuance of the Option Shares. The Company shall
promptly notify Optionee of any automatic extension in the term of the Option in
the event the foregoing provisions become applicable. In all events, the
Optionee shall give a written representation satisfactory to legal counsel to
the Company upon his exercise of the Option that he is acquiring the Option
Shares for investment purposes and not with a view to, or for resale in
connection with, the distribution of any Option Shares or other securities of
the Company.
5. Limitation on Optionee's Rights.
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(a) The Optionee shall not have any of the rights of a shareholder of
the Company with respect to the Option Shares except to the extent that one or
more certificates for the Option Shares shall be delivered to him upon the due
exercise of the Option.
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(b) Nothing contained in this Agreement shall confer upon the Optionee
any right with respect to the continuation of his employment by the Company or a
parent or a subsidiary of the Company or interfere in any way with the right of
the Company or a parent or a subsidiary of the Company (subject to the terms of
any separate employment agreement to the contrary) to terminate his employment
at any time or to increase or decrease the compensation payable to the Optionee.
(c) As a limitation upon the exercisability of the Option, and in
accordance with Section 422(d) of the Code, to the extent the aggregate Fair
Market Value of the Stock with respect to which: (i) ISOs granted under the
Plan; and (ii) incentive stock options granted under all other plans of the
Company, a Parent or a Subsidiary (determined without regard to Section 422(d)
of the Code), are exercisable for the first time by the Optionee during any
calendar year of all such plans (inclusive of the Plan) shall exceed one hundred
thousand dollars ($100,000), then the exercisability of such options (inclusive
of the ISOs granted under the Plan) shall be deferred, taking all such options
in order in which such options shall have been granted. To the extent the
exercisability of an ISO is deferred by reason of the foregoing limitation, the
deferred portion shall become exercisable in the first calendar year or years
thereafter in which the one hundred thousand dollars ($100,000) limitation in
this Section would not be contravened, but such deferral shall in all events end
thirty (30) days immediately prior to the early termination of the Option as
provided in Section hereof or the effective date of a transaction described in
Section 3.2(d) of the Plan in which the ISO is not to be assumed, whereupon the
ISO shall become immediately exercisable as a Non-ISO for the deferred portion
of the Option shares.
6. Nontransferability of Option. The Option shall not be transferable by
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the Optionee otherwise than by will or the laws of descent and
distribution, and the Option may be exercised during the lifetime of the
Optionee only by him. More particularly, but without limiting the
generality of the foregoing, the Option may not be assigned, transferred
(except upon the death of the Optionee), pledged or hypothecated in any
way, shall not be assignable by operation of law and shall not be subject
to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.
7. Early Termination of Option. The Option and all rights under this
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Agreement, to the extent such rights shall not have been previously
exercised, shall terminate and become immediately null and void on the
expiration of thirty (30) days after the Optionee ceases to be an employee
(whether by resignation,
C-3
retirement, dismissal, total disability, death or otherwise) of the Company
or a parent or a subsidiary of the Company; provided, however, the Option
may thereafter be exercised as follows:
(a) If the termination of employment was due to the Optionee's forced
retirement after becoming totally disabled, the Optionee may, at any time or
from time to time during a period of six (6) months after such termination of
his employment, exercise the Option (except that in no event may the Option be
exercised to any extent after the expiration of the term specified in Section
hereof) to the extent such Option was exercisable by him on the date of such
termination of his employment.
(b) If the termination of employment was due to the death of the
Optionee while in the employ of the Company or a parent or a subsidiary of the
Company or in the event of his death within thirty (30) days after termination
of his employment, then the Option, to the extent that the Optionee was entitled
to exercise such Option on the date of his death in the first instance or the
date of his termination of employment in the second instance, may be exercised
within one (1) year after such death by the Optionee's executors,
administrators, heirs or legatees; provided, however, that in no event may the
Option be exercised to any extent after the expiration of the term specified in
Section hereof.
8. Nonsurvival of Company. Where dissolution or liquidation of the
----------------------
Company or any merger or combination in which the Company is not the
surviving corporation is involved, the Option shall terminate as of the
effective date of such liquidation, dissolution, merger or combination to
the extent that the Option is not assumed by, or replaced by equivalent
options granted by, the surviving corporation, if any, in such liquidation,
dissolution, merger or combination, but, in such event, the Optionee shall
have the right, for a period of thirty (30) days immediately prior to the
effective date of such liquidation, dissolution, or merger or combination,
to exercise his Option, in whole or in part, to the extent that such Option
shall not have been previously exercised or so assumed or so replaced,
without regard to the vesting provisions set forth in Section (a) hereof;
provided, however, that no adjustment shall be made which would constitute
a "modification" of such Option, as such term is defined in Section
425(h)(3) of the Code.
9. Changes in Capital Structure. In the event that the outstanding shares of
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common stock of the Company are changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation by reason of merger, consolidation, other reorganization,
recapitalization, reclassification, combination of shares, stock dividend,
stock split
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or reverse stock split, the rights of the Optionee shall be appropriately
adjusted both as to the number of shares and the Option Price; provided,
however, that no adjustment shall be made which would constitute a
"modification" of such Option, as such term is defined in Section 425(h)(3)
of the Code.
10. Method of Exercising Option.
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(a) Subject to the terms and conditions of the Plan and this Agreement, the
Option may be exercised by written notice ("Exercise Notice") from the Optionee
or other person entitled to exercise the Option delivered to the Company stating
the election to exercise the Option and the number of the Option Shares in
respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. The Exercise Notice shall be accompanied by
the full exercise price for the Option Shares in respect of which the Option is
being exercised. In the event the Option shall be exercised pursuant to Section
(b) hereof by any person or persons other than the Optionee, the Exercise Notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise the Option.
(b) The Option Price for the Option Shares shall be paid in one or more of
the following forms: (i) Certified or bank cashier's check, personal check or
the equivalent thereof payable to the order of the Company; or (ii) in Shares of
Stock held by the Optionee (or any other person or persons exercising the
Option); provided, however, that the Stock so surrendered is valued at Fair
Market Value; and, provided further, in the case an Option Price is paid by an
Insider in whole or in part by the delivery of shares of Stock, the Stock
acquired in the exercise of such Option shall not be disposed of by the Insider
for a six (6) month period commencing on the date on which the Insider last
purchased Stock (including the Stock tendered in connection with such exercise)
so long as and only to the extent such restriction is required under Section 16
of the 1934 Act and any rules or regulations promulgated thereunder. In
addition, no such payment of the Option Price shall be made in full or in part
with shares of Stock acquired by the Optionee through the prior exercise of an
ISO where such shares shall not have been held by the Optionee within the
requirements of Section 422(a)(1) of the Code.
(c) The certificate or certificates for the Option Shares in respect of
which the Option shall have been exercised shall be registered in the name of
the person or persons exercising the Option, or, if the Option is exercised by
the Optionee and if the Optionee shall so request in the Exercise Notice, shall
be registered in the name of the Optionee 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 the
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Option. All of the Option Shares purchased upon the exercise of the Option as
provided herein shall, when issued, be fully paid and nonassessable.
(d) The Company's obligation to deliver the Option Shares upon the
exercise of the Option shall be subject to satisfaction of all applicable
federal, state and local income and employment tax withholding requirements. In
addition, if at any time the Optionee makes a "disqualifying disposition" of an
ISO, he shall also be responsible for payment of his share of all applicable
federal, state and local income and employment tax withholding requirements
caused as a result thereof and shall promptly pay to the Company upon demand the
amount thereof.
11. Legend on Certificates. Each certificate representing the Option
----------------------
Shares in respect of which the Option has been exercised by Optionee shall
bear on its face the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF BY THE HOLDER UNLESS REGISTERED UNDER SAID ACT OR UNLESS, IN
THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, THE TRANSFER QUALIFIES
FOR AN EXEMPTION FROM OR EXCEPTION TO THE REGISTRATION PROVISIONS THEREOF."
12. Adequate Authorized Capitalization. The Company shall at all times
----------------------------------
during the term of the Option reserve and keep available or otherwise have
authorized such number of shares of the Company's common stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all
fees and expenses necessarily incurred by the Company in connection
therewith, and shall from time to time use its best efforts to comply with
all laws and regulations which, in the opinion of legal counsel to the
Company, shall be applicable thereto.
13. Notices. All notices, requests, demands and other communications
-------
required or contemplated hereunder shall be in writing, shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, and shall be deemed to have been given upon the earlier
of (a) the date of personal delivery to the person to receive such notice
at the address indicated below or (b) if mailed to the person to receive
such notice at the address indicated below, four (4) business days after
the date of posting by the United States Post Office as evidenced by the
execution of the return receipt. The parties addresses, for all purposes
hereof, are as follows:
If to the Company: Grip Technologies, Inc.
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00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxxxx
If to the Optionee: (See address on signature page)
Notice of change of address shall be given by written notice but shall not be
deemed effective until it has been given in the manner detailed in this Section.
14. Successors and Assigns. Subject to the provisions of Section hereof,
----------------------
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their successors and permitted assigns.
15. Applicable Law; Venue. This Agreement shall be governed by,
---------------------
interpreted under, and construed and enforced in accordance with the
internal laws, and not the laws pertaining to conflicts or choice of laws,
of the State of California applicable to agreements made and to be
performed wholly within the State of California. The sole forum for
resolving disputes arising under or relating to this Agreement shall be the
Municipal and Superior Courts for the County of Orange, California, or the
Federal District Court for the Central District of California and all
related appellate courts, and the parties hereby consent to the
jurisdiction of such courts and agree that venue shall be in Orange County,
California; provided, however, if the Company relocates its principal
executive offices to another County within the State of California, then
the appropriate venue shall be the state or federal courts of such county.
16. Counterparts. This Agreement may be executed in one or more counterparts,
------------
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
17. Entire Agreement; Amendment. This Agreement contains the entire
---------------------------
understanding between the parties hereto with respect to the subject matter
hereof and supersedes any and all prior or contemporaneous written or oral
negotiations or agreements between them regarding the subject matter
hereof. No addition,
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modification or amendment of or to any term or provision of this Agreement,
or to this Agreement as a whole, shall be effective unless set forth in
writing and signed by all the parties hereto.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above mentioned.
"Company" "Optionee"
GRIP TECHNOLOGIES, INC.
By
------------------------ --------------------------------------
Xxx X. Xxxxxxx XXXXXX XXXXXX
President
--------------------------------------
Number and Street
--------------------------------------
City, State and Zip Code
(If Optionee is unmarried as of the
date hereof, then he shall sign his
name again below.)
I certify that, as of the date
hereof, I am not married.
--------------------------------------
XXXXXX XXXXXX
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EXHIBIT D
Private Stock Option Agreement
September 26, 1997
Xx. Xxxxxx Xxxxxx
00000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Xxxxxx:
The purpose of this letter is to memorialize and confirm my commitment and
agreement to sell you 100,000 shares of Common Stock of Grip Technologies, Inc.,
a California corporation (the "Company"), from shares which I currently own or
hereafter acquire.
My commitment and agreement is as follows:
1. On the following terms and subject to the following conditions, I
hereby agree to sell to you 100,000 shares of Common Stock of the Company which
I own (the "Shares") at $.35 per share (the "Purchase Price").
2. Your right to purchase the Shares will vest over three years on the
basis of the following schedule: (i) 33,333 shares after completion of the first
year of your employment by the Company; (ii) 33,333 shares after completion of
the second year of your employment by the Company; (iii) 33,334 shares after
completion of the third year of your employment by the Company.
3. The Shares are "restricted securities" as that term is defined in Rule
144(a)(3) promulgated under the Securities Act of 1933 as amended (the "Act").
The Shares have not been registered under the Act or any securities or Blue Sky
laws of any state (collectively the "State Laws") and, consequently, the Shares
must be held indefinitely unless subsequently registered thereunder or an
exemption from such registration is available. Neither I nor the Company has
any obligation or intention to register the Shares for resale under the Act or
any State Laws.
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Xx. Xxxxxx Xxxxxx
September 26, 1997
Page 2
4. You hereby acknowledge, and each time you exercise your right to
purchase the Shares will acknowledge, that you will be purchasing the Shares for
your own account and not with a view to or for sale in connection with any
distribution of securities of the Company.
5. By reason of your business or financial experience, you hereby
represent, and each time that you exercise your right to purchase the Shares
will represent, that you have the capacity to protect your own interests in
connection with the purchase of the Shares.
6. Your right to purchase the Shares must be exercised, if at all, within
five (5) years following the initial commencement of your employment by the
Company, otherwise your rights expire and lapse. The manner in which you are
required to exercise your rights hereunder is to deliver to me a written notice
of exercise, stating the number of the Shares you desire to purchase accompanied
by your check, payable to me, in the amount of the Purchase Price for those
Shares. The notice and payment of the Purchase Price must be actually received
by me prior to the expiration of the five-year period or the earlier termination
of your employment.
7. If at any time during the first five (5) years of your employment by
the Company you are terminated for "good cause" or you voluntarily resign or
terminate your employment, all rights hereunder shall automatically and
immediately terminate, and if as of such time you have previously purchased any
Shares from me, I or my heirs, successors or assigns have the right and option
to repurchase those Shares from you, and you hereby agree to sell those Shares
to me, at the same Purchase Price as you originally paid me for those Shares.
My right is exercisable at anytime within sixty (60) days following the
termination or resignation of your employment by delivery to you of a written
notice of my intent to exercise the repurchase right. Delivery of the Purchase
Price therefor is conditioned upon the surrender and delivery of the
certificate(s) representing the Shares.
8. The certificate representing the Shares will bear appropriate
restrictive legends, as specified by the Company or its legal counsel, regarding
restrictions on transferability and compliance with the Act and State Laws, and
the Company will place "stop transfer" instructions with respect thereto with
its transfer agent. In addition, the
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Xx. Xxxxxx Xxxxxx
September 26, 1997
Page 3
certificate will bear a legend indicating the repurchase right, as set forth in
paragraph 7 above.
9. Time is of the essence with respect to each and every provision set
forth in of this letter.
10. In the event that the outstanding shares of Common Stock of the
Company are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of
merger, consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock dividend, stock split or reverse stock split, the
Shares and the Purchase Right shall be appropriately adjusted.
11. The provisions of this letter supersede any prior or contemporaneous
commitments or understandings. This letter sets forth our entire agreement and
understanding regarding the subject matter hereof. Any modification, amendment
or waiver must be in writing signed by the party to be charged.
If the foregoing is acceptable to you and accurately reflects our
agreement, please date and sign the enclosed copy of this letter and return it
to me at your earliest convenience.
Very truly yours,
SGL/cm Xxx X. Xxxxxxx
Agreed to and accepted on
September 26, 1997
-------------------------
Xxxxxx Xxxxxx
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