STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT is effective as of the 15th day of August,
1997, between SAF T LOK, INCORPORATED, a Florida corporation (the "Company"),
and XXXXXXX X. XXXXXX (the "Optionee").
BACKGROUND
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A. Optionee is currently an employee of the Company.
B. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase common stock of the Company.
C. This Agreement shall be considered an individual employee benefit plan
for the Optionee.
AGREEMENT
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In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
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option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 86,000 shares of the Company's common stock (the "Stock") at an exercise
price equal to $0.10 per share (the "Exercise Price"), on the terms and
conditions herein set forth. The date of grant of the Option is the date set
forth on Exhibit "A" attached hereto.
2. Period of Option. The term of the Option shall be for a period of
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seven years from the date hereof, subject to earlier termination as provided
herein. Prior to the expiration of the Option, Optionee may exercise the Option
for portions of the total option stock granted only in accordance with the
vesting schedule set forth on Exhibit "A" attached hereto.
3. Exercise of Option. The Option shall be exercisable only during the
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term of the Option as long as the Optionee is in "Continuous Employment" with
the Company, or any successor thereof. Notwithstanding the preceding sentence,
as long as the Option's term has not expired, the Option which is otherwise
exercisable in accordance with the provisions of this Agreement shall be
exercisable.
(a) for a period ending 90 days after the removal or resignation of
the Optionee from the Board of Directors, on which such Optionee has served; or
(b) by the estate of the Optionee, within one year after the date of
the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or while serving on the Board of Directors of the
Company or any Subsidiary, or any successor thereof; or
(c) within one year after the Optionee's employment with the Company
terminates, if the Optionee becomes disabled (as defined in Section 22(e) of the
Code) during Continuous Employment with the Company and such disability is the
cause of termination.
For purposes of this Agreement, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by the Company. Continuous
Employment with the Company shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence approved by the
Company or in the case of transfers between locations of the Company or between
any Parent or Subsidiary, or successor thereof. Service as a member of the
board of directors or as a consultant of the Company shall be treated as
Continuous Employment. The term "cause" as used in this subparagraph 3 shall
mean: (i) commission of a felony or a charge of theft, dishonesty, fraud or
embezzlement; (ii) failure to adhere to Company's reasonable directives and
policies, willful disobedience or insubordination; (iii) disclosing to a
competitor or other unauthorized person, proprietary information, confidences or
trade secrets of the Company or any Parent or Subsidiary; (iv) recruitment of
Company or any Parent or Subsidiary personnel on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof; or (v) solicitation of business on behalf of a competitor or potential
competitor of the Company, any Parent or Subsidiary, or any successor thereof.
4. Investment Representation and Agreement. Optionee represents that
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this Option and any shares purchased pursuant to this Option are purchased for
investment purposes only and for Optionee's own account. Optionee acknowledges
that this Option and the shares pertaining to this Option are not registered
under the Securities Act of 1933, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
5. Restrictive Legend. Optionee hereby agrees that certificates
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evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
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These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act or any
other state securities laws, and, therefore, cannot be sold unless they are
subsequently registered under the Act and any applicable state securities
laws, or unless an exemption from registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
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Optionee, except in the case of Optionee's death while in Continuous Employment
of the Company, in which case the Option is exercisable by Optionee's estate's
personal representative pursuant to paragraph 3(c), and except in the case of
Optionee's termination due to disability occurring during Continuous Employment
with Saf T Lok, in which case the Option is exercisable, if necessary, by
Optionee's legal representative pursuant to paragraph 3(d). The Option may not
be sold, exchanged, assigned, pledged, encumbered, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution. The
Option shall not be subject to execution, attachment, or similar process. Upon
any attempt to sell, exchange, assign, pledge, encumber, hypothecate, or
otherwise transfer the Option or any right thereunder, the Option and all rights
thereunder shall immediately become null and void.
7. Method of Exercise. Optionee may exercise the Option, in whole or in
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part, by written notice to the Company stating in such written notice the number
of shares of Stock such Optionee elects to purchase under the Option, and the
time of the delivery thereof, which time shall be at least 15 days after the
giving of such notice, unless an earlier date shall have been mutually agreed
upon. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by the applicable state and federal
securities laws. If, after receipt of such information, Optionee desires to
withdraw such notice of exercise, Optionee may withdraw such notice of exercise
by notifying the Company, in writing, prior to the time set forth for delivery
of the shares of Stock. In no event may the Option be exercised after the
expiration of its term. Optionee is under no obligation to exercise an Option or
any part thereof.
(a) Payment for Option Stock. The exercise of this Option shall be
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contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock or cancellation of a vested portion
of the Stock Option, or any combination of the foregoing in an amount equal to
the full option price of the shares of Stock being purchased. The optionee
shall have no rights as a shareholder with respect to any shares covered by his
Option until the exercise of the Option and the date of issuance of a
certificate to him for such shares. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such certificate
is issued.
(b) Delivery of Stock to Optionee. Provided the optionee has
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delivered proper notice of exercise and full payment of the option price, the
Company shall
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undertake and follow all necessary procedures to make prompt delivery of the
number of shares of Stock which the Optionee elects to purchase at the time
specified in such notice. Such delivery, however, may be postponed at the sole
discretion of the Company to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any governmental agency,
stock exchange or regulatory authority. As a condition to the issuance of
shares of Stock, the Company may require such additional payments from the
Optionee as may be required to allow the Company to withhold any income taxes
which Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
8. Changes in Capital Structure of Company. In the event of a change in
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capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. The Company shall give notice of any adjustment to Optionee.
9. Governing Law. This Agreement shall be governed by, interpreted
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under, and construed in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement will inure to the benefit of and be
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binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
11. Entire Agreement. This Agreement constitutes the entire agreement of
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the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
12. Waiver of Modification. No waiver or modification of this Agreement
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or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such wavier or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
13. Number and Gender. Whenever used herein, singular numbers shall
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include the plural, the singular, and the use of any gender shall include all
genders.
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14. Invalid Provision. The invalidity or unenforceability of any term or
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provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
15. Nonqualified Stock Option. This Agreement shall be considered an
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individual employee benefit plan for the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "OPTIONEE"
SAF T LOK, INCORPORATED
By:________________________ _______________________________
Name:___________________ Name: Xxxxxxx X. Xxxxxx
Title:__________________
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EXHIBIT "A" TO STOCK OPTION AGREEMENT
NOTICE OF GRANT OF STOCK OPTION
This Agreement shall be considered an individual employee benefit plan for the
Optionee.
Name: Xxxxxxx X. Xxxxxx
Address: ________________
________________
Social Security Number: ______________________
You have been granted a stock option to buy Saf T Lok Incorporated common stock
as follows:
Stock Option Grant Number............... _____________
Grant Date............................ August __, 1997
Type of Grant*................................... NQSO
Exercise Price per Share...................... $ 0.10
Total Shares Granted........................... 86,000
Total Amount to Fully Exercise................ $ 8,600
Expiration Date of the Grant........... August __,2004
The vesting schedule for this grant is as follows: This option is fully vested.
By Order of the Board of Directors of Saf T Lok Incorporated
Validated by _________________________________________
Corporate Secretary
*ISO = Qualified Stock Option
NQSO = Nonqualified Stock Option
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