STOCK OPTION AGREEMENT
Exhibit
10.6
THIS STOCK OPTION AGREEMENT
(“Agreement”)
is made and entered into as of November 18, 2008, by and between Future Energy
Solutions, Inc., a New York corporation (the “Company”),
and the following consultant to the Company (herein, the “Optionee”):
Xxxxxxx Xxxxxxxx
A. The
Company is a developer of wind turbine power generator technology and is in its
development phase.
B.
Since July 2008, the Optionee has provided consulting services to the Company in
connection with its management structure and business development and product
marketing strategies and has arranged to continue to provide consulting services
to the Company over the next year during its development stage.
In
consideration of the foregoing, the services provided and to be provided, and
the covenants set forth in this Agreement, the parties agree as
follows:
1. Option
Information.
(a) Date
of Option: November 18, 2008
(b) Optionee:
Xxxxxxx Xxxxxxxx
(c) Number
of Shares: 166,500
(d) Exercise
Price: $1.00 per share
2. Acknowledgments.
(a) Optionee
is an independent consultant to the Company, not an employee.
(b) The
Board of Directors has authorized the granting to Optionee of a stock option
(“Option”)
to purchase shares of common stock of the Company (“Common
Stock”) upon the terms and conditions hereinafter stated.
3. Shares; Price. The
Company hereby grants to Optionee the right to purchase, upon and subject to the
terms and conditions herein stated, the number of shares of Common Stock set
forth in Section 1(c) above (the “Shares”)
at the price per Share set forth in Section 1(d) above (the “Exercise
Price”), the fair market value per share of the Shares covered by this
Option as determined by the Board of Directors in good faith as of the date of
this Option.
4. Term of
Option. This Option shall expire, and all rights under it to
purchase the Shares, shall terminate at 5:00p.m. Eastern Time on November 18,
2011, unless terminated earlier pursuant to the terms hereof.
5. Exercise.
(a) This
Option shall be exercised by delivery to the Company of (a) a written notice of
exercise stating the number of Shares being purchased (in whole shares only) and
such other information set forth on the form of Notice of Exercise attached to
this Agreement as Appendix
A, (b) a check or cash in the amount of the Exercise Price of the Shares
covered by the notice (or such other consideration as has been approved by the
Board of Directors) and (c) a written investment representation as provided for
in Section 10 of this Agreement.
(b) This
Option shall not be assignable or transferable, except by will or by the laws of
descent and distribution or by gift or domestic relations orders to the
Optionee’s Family Members who agree to be bound by the terms of this Agreement.
For purposes of this Agreement, “Family Member” includes any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the employee's household (other than a tenant or employee), a trust in
which these persons have more than fifty percent of the beneficial interest, a
foundation in which these persons (or the employee) control the management of
assets, and any other entity in which these persons (or the employee) own more
than fifty percent of the voting interests.
6. No Rights as
Shareholder. Optionee shall have no rights as a shareholder
with respect to the Shares covered by this Option until the effective date of
the issuance of shares following exercise of this Option, and no adjustment will
be made for dividends or other rights for which the record date is prior to the
date such stock certificate or certificates are issued except as provided in
Section 7 of this Agreement.
7. Recapitalization.
(a) Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted automatically for any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares or the payment of
a stock dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however that
the conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration by the
Company.”
(b) In
the event of a proposed dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving entity, or a sale of all
or substantially all of the assets or capital stock of the Company
(collectively, a “Reorganization”),
this Option shall terminate upon to the consummation of the proposed action,
unless otherwise provided by the Board in its sole and absolute discretion,
provided that the Company gives Optionee ninety (90) days notice prior to
consummation.
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(c) Subject
to any required action by the shareholders of the Company, if the Company shall
be the surviving entity in any merger or consolidation, this Option thereafter
shall pertain to and apply to the securities to which a holder of Shares equal
to the Shares subject to this Option would have been entitled by reason of the
merger or consolidation.
(d) The
grant of this Option shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes in
its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets,
provided that the Company gives Optionee at least sixty (60) days
notice.
8. Taxation Upon Exercise of
Option. Optionee understands that, upon exercise of this
Option, Optionee will recognize income, for Federal and state income tax
purposes, in an amount equal to the amount by which the fair market value of the
Shares, determined as of the date of exercise, exceeds the Exercise Price. The
acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate
with Company in establishing the amount of such income and corresponding
deduction to the Company for its income tax purposes.
9. Modification, Extension and Renewal
of Options. The Board of Directors or a Committee thereof may
modify, extend or renew this Option or accept its surrender (to the extent not
yet exercised) and authorize the granting of a new option in substitution for it
(to the extent not yet exercised), subject at all times to the Internal Revenue
Code and New York law. Notwithstanding the provisions of this Section
9, no modification shall, without the consent of the Optionee, alter to the
Optionee's detriment or impair any rights of Optionee hereunder.
10. Investment Intent; Restrictions on
Transfer; Registration Rights.
(a) No
later than February 15, 2009, the Company will file a registration statement
with the Securities and Exchange Commission on Form S-1 or Form S-8 covering the
Shares subject to this Option in favor of the Optionee and his assigns, and
following the effectiveness the Company will provide an opinion of counsel
stating that such Shares may be traded without restriction, under the federal
securities law to the extent required by the Company’s transfer
agent.
(b) Optionee
represents and agrees that if Optionee exercises this Option in whole or in
part, Optionee will in each case acquire the Shares upon such exercise for the
purpose of investment and not with a view to, or for resale in connection with,
any distribution thereof; and that upon the exercise of this Option in whole or
in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Section 5 of this Agreement) shall furnish to the
Company a written statement to such effect, satisfactory to the Company in form
and substance.
(c) Optionee
further represents that Optionee has had access to the financial statements or
books and records of the Company, has had the opportunity to ask questions of
the Company concerning its business, operations and financial condition.
Optionee further represents to obtain additional information reasonably
necessary to verify the accuracy of such information, and further represents
that Optionee (either alone or in conjunction with his or her professional
advisers) has such experience in and knowledge of investment, financial and
business matters with respect to investments similar to the stock of the Company
that Optionee is capable of evaluating the merits and risks thereof and has the
capacity to protect his or her own interest in connection
therewith.
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(d) Unless
and until the Shares represented by this Option are registered under the
Securities Act of 1933, as amended ("Securities
Act"), all certificates representing the Shares and any certificates
subsequently issued in substitution therefor and any certificate for any
securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially the
following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES
ACT OF 1933 (THE “SECURITIES
ACT”) OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE. NEITHER THESE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR
ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.”
The
certificates shall bear such other legend or legends as the Company and its
counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company's transfer
agent.
(e) No
later than December 15, 2008, the Company will file a Form 10 Registration
Statement with the Securities and Exchange Commission to register its class of
common stock under the Securities Exchange Act of 1934, as amended.
11. Confidentiality; Non-Solicitation;
Intellectual Property. As a material inducement to the Company
to grant this Option and to enter into this Agreement, the Optionee hereby
expressly agrees to be bound by the following covenants, terms and
conditions:
(a) During
the course of the Optionee's relationship with the Company or any of its
affiliates, the Optionee has had, and will have, access to Confidential
Information relating to the Company and its affiliates and their respective
suppliers, partners and customers. The Optionee agrees to keep secret and retain
in strictest confidence all of such Confidential Information, and will not
disclose, disseminate or use such information for the Optionee's own advantage
or for the advantage of any other person or entity other than the Company in
accordance with the terms of the Optionee's employment or relationship with the
Company. In the event disclosure of any such Confidential Information
is required or purportedly required by law, the Optionee will provide the
Company with prompt notice of any such requirement so that the Company may seek
an appropriate protective order prior to disclosure.
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(b) In
the event that the Optionee as part of his activities on behalf of the Company
generates, creates, authors or contributes to any invention, design, new
development, device, product, method or process (whether or not patentable or
reduced to practice or constituting Confidential Information), any copyrightable
work (whether or not constituting Confidential Information) or any other form of
Confidential Information relating directly or indirectly to the Company's
business (including anything that has occurred since the first date Optionee
provided services to the Company), the Optionee acknowledges that such
Intellectual Property is the exclusive property of the Company and hereby
assigns all right, title and interest in and to such Intellectual Property to
the Company. Any copyrightable work prepared in whole or in part by
the Optionee is and will be deemed “a work made for hire” under Section 201(b)
of the 1976 Copyright Act, and the Company shall own all of the rights comprised
by the copyright therein. The Optionee shall promptly and fully
disclose all Intellectual Property to the Company and shall cooperate with the
Company to protect the Company's interests in and rights to such Intellectual
Property (including, without limitation, providing reasonable assistance in
securing patent protection and copyright registrations and executing all
documents as reasonably requested by the Company, whether such requests occur
prior to or after termination of the Optionee's employment with the
Company). Notwithstanding the Date of Option or anything else herein
to the contrary, the provisions of this Section 11(b) shall be deemed to be
effective as of and apply to all matters occurring since the first date Optionee
provided services to the Company.
(c) As
requested by the Company from time to time for any reason, the Optionee shall
promptly deliver to the Company all copies and embodiments, in whatever form, of
all Confidential Information and Intellectual Property in the Optionee's
possession or within his control (including, but not limited to, written
records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
(d) The
Optionee acknowledges that in the event the Optionee violates any provisions of
this Section 11, in addition to its other rights and remedies, the Company shall
be entitled to injunctive relief without the necessity of proving actual
damages. The Optionee further acknowledges that if any provision of
this Section 11 is held to be unenforceable, the court making such holding shall
have the power to modify such provision and in its modified form such provision
shall be enforced.
(e) Without
in any way limiting the provisions of this Section 11, the Optionee further
acknowledges and agrees that the provisions of this Section 11 shall remain
applicable in accordance with their terms after the termination or cessation of
services to the Company or exercise or termination of the Option.
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(f) “Confidential
Information” means information or material proprietary to the Company or
designated as Confidential Information by Company and not generally known by
non-Company personnel, which the Optionee develops, or of which Optionee obtains
knowledge, or to which the Optionee may obtain access, through or as a result
of, the Optionee's relationship with the Company (including information
conceived, originated, discovered or developed in whole or in part by the
Optionee). Confidential Information includes, but is not limited to,
the following types of information and other information of a similar nature
(whether or not reduced to writing): discoveries, ideas, concepts, software in
various stages of development, designs, drawings, specifications, techniques,
models, data, source code, object code, data structures, instruction sets,
documentation, diagrams, flow charts, research, development, training methods,
training manuals, processes, procedures, “know-how”, marketing techniques and
materials, marketing and development plans, customer names and other information
related to customers, price lists, pricing policies and financial
information. Confidential information also includes any information
described above which the Company obtains from other entities and which the
Company treats as proprietary or designates as Confidential Information, whether
or not owned or developed by the Company. Notwithstanding the
foregoing, information publicly known that is generally employed by the trade at
or after the time Optionee first learns of such information, or generic
information or knowledge which associate would have learned in the course of
similar employment or work elsewhere in the trade, shall not be deemed part of
the confidential information.
(g) “Intellectual
Property” shall mean those forms of authorship (as understood from Title 17 of
the United States Code), invention (as understood by Title 35 of the United
States Code) and identification (as understood from Title 15 of the United
States Code Section 1051 et seq., trademarks and service marks) and such other
forms of property rights in ideas, “know how”, inventions, discoveries, or in
their physical embodiments as shall related to or involve the Company's business
or any of its products, services or strategies.
12. Notices. Any notice
required to be given pursuant to this Option or the Plan shall be in writing and
shall be deemed to be delivered upon receipt or, in the case of notices by the
Company, three days after deposit in the U.S. mail, postage prepaid, addressed
to Optionee at the address last provided by Optionee for use in Company records
related to Optionee.
13. Applicable
Law. This Option has been granted, executed and delivered in
the State of New York, and the interpretation and enforcement shall be governed
by the laws thereof and subject to the exclusive jurisdiction of the courts
therein.
14. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and controls and
supersedes any prior understandings, agreements or representations by or between
the parties, written or oral with respect to its subject matter.
[SIGNATURE PAGE
FOLLOWS]
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IN WITNESS WHEREOF, the
parties hereto have executed this Option as of the date first above
written.
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FUTURE
ENERGY SOLUTIONS, INC.
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/s/ Xxxxxx Xxxxx
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By:
Xxxxxx Xxxxx
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Title: President
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Optionee
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/s/ Xxxxxxx Xxxxxxxx
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Name:
000 Xxxx Xxxxxx
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Xxxxxxx:
Xxxxxxxxx, XX
00000
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APPENDIX
A
NOTICE
OF EXERCISE OF STOCK OPTION
To: Future
Energy Solutions, Inc.
The undersigned is a holder of a stock
option (the “Option”)
to purchase shares of Future Energy Solutions, Inc. (the “Company”)
Common Stock, $.001 par value (the “Common
Stock”), issued pursuant to a Future Energy Solutions, Inc. Stock Option
Agreement dated as of ________________ (the “Agreement”). A
copy of the Agreement evidencing such Option is annexed hereto.
The undersigned hereby elects to
purchase ____________ shares of Common Stock pursuant to the terms of such
Option (the “Option
Shares”), and tenders herewith payment in full in the amount of $________
per share, for a total purchase price of $_______________, with the payment of
the purchase price being made in the form of _____________________, pursuant to
Section 5 of the Agreement. The undersigned wishes to consummate the
purchase of the Option Shares by or before ________________.
In exercising his Option, the
undersigned hereby confirms and acknowledges that he is acquiring Option Shares
for his own account for investment and not with a view to, or for sale in
connection with, the resale or distribution of any such shares. The
undersigned also confirms and acknowledges that he will not sell or transfer any
Option Shares acquired pursuant to the exercise of the Option until he requests
and receives an opinion of the Company's counsel to the effect that such
proposed sale or transfer will not result in a violation of the Securities Act
of 1933, as amended, or any applicable state securities law, or a registration
statement covering the sale or transfer of the Option Shares has been declared
effective by the Securities and Exchange Commission or appropriate state
governmental authority, or he obtains a no-action letter from the Securities and
Exchange Commission or appropriate state governmental authority with respect to
the proposed transfer.
The undersigned acknowledges and agrees
that this purported exercise of the Option is conditioned on, and subject to,
(a) any compliance with requirements of applicable federal and state securities
laws deemed necessary by the Company, (b) to the undersigned's satisfaction of
all federal, state or local income and employment tax withholding requirements
applicable to this exercise.
Please issue a certificate or
certificates representing said Option Shares in the name of the undersigned or
in such other name as is specified below. If the Option Shares are
being issued to any person other than the Optionee, evidence of the right of
such person to exercise the Option has been presented to the Company and has
been deemed satisfactory:
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Name
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Address:
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Social
Security Number
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Date:
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SCHEDULE
TO EXHIBIT 10.6 – FORM OF
November 18, 2008
STOCK OPTION AGREEMENT
BY
AND AMONG WINDTAMER CORPORATION AND THE
NON-EMPLOYEE
CONSULTANTS OF THE
COMPANY
The
Consultant Stock Option Agreement filed as Exhibit 10.6 is substantially
identical in all material respects to the Consultant Stock Option Agreements
which have been entered into by WindTamer Corporation and the following
non-employee consultants effective as of November 18, 2008,
except for a difference in the number of shares granted to Optionee Xxxxx
Koloukoris.
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Optionee
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Number of Shares
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Xxxxxxx
Xxxxxx
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166,500
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Xxxxx
Xxxxxxxxxx
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167,000
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Xxxxx
Xxxxxxxxxx
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600,000
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