Date of Grant: December 31, 1997
ELECTROSOURCE, INC.
STOCK OPTION AGREEMENT
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE OACTO), OR
UNDER THE SECURITIES LAWS OF ANY STATE (OBLUE SKY
LAWSO), AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR DELIVERY TO THE COMPANY OF EVIDENCE
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT AN
EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE.
Corning Incorporated Xx. X00-000X
Xxxxxxx, Xxx Xxxx 00000 70,000 Shares
The undersigned, Electrosource, Inc. (the "Company"), a
Delaware corporation, for good and valuable consideration desires
to grant to Corning Incorporated ("Corning" or "Holder") an
option to acquire shares of Common Stock in the Company. The
option covered hereby is granted pursuant to the terms of the
Research and Development Umbrella Agreement ("Umbrella
Agreement") dated as of July 1, 1997 between the Company and
Corning, and all provisions of that Umbrella Agreement are
incorporated herein by reference. Defined terms shall have the
same meaning as in the Umbrella Agreement.
1. Option. The Company does hereby grant to Corning the
exclusive option to purchase from the Company all or any part of
an aggregate of Seventy Thousand (70,000) shares ("shares") of
Common Stock of the Company. The exercise price shall be Seven
and .125/100 Dollars ($7.125) per share for Seventy Thousand
(70,000) shares.
2. Term. The Option shall be exercisable at any time or
times until the option expires or terminates in accordance with
the provisions hereof. This Option shall in any event terminate
no later than 5:00 o'clock P.M., San Marcos, Texas time three
years after its date of grant.
3. Exercise. To exercise this option or any part thereof,
Corning shall give written notice of such election to the Company
at its Corporate Headquarters, Attention Corporate Secretary, so
as to be received by the Company within the period this option is
exercisable, which notice shall specify the number of shares to
be purchased and be accompanied by payment in full. Payment for
such shares may be by check or wire transfer. Exercise of the
option may be made in multiple parts, but in amounts of at least
One Hundred Thousand and No/100 Dollars ($100,000.00) per
exercise.
4. Share Issue. Upon receipt by the Company of proper
notice of exercise of this Option, the Company as promptly as
practicable and subject to the other provisions in this Option,
shall deliver a certificate or certificates representing shares
so purchased, and shall pay all original issuance or transfer
taxes on the exercise of this Option, and all other fees and
expenses necessarily incurred by the Company in connection
therewith. Certificates evidencing such shares may have endorsed
thereon such language as may be deemed necessary or advisable by
counsel for the Company in order to ensure compliance with the
applicable securities laws or regulations. Registration rights
shall be as set forth in the Umbrella Agreement.
5. Subdivision or Combination of Common Stock. If the
Company at any time subdivides (by any stock split, stock
dividend, recapitalization or otherwise) its outstanding shares
of Common Stock into a greater number of shares, the exercise
price in effect immediately prior to such subdivision will be
proportionately reduced, and if the Company at any time combines
(by reverse stock split or otherwise) its outstanding shares of
Common Stock into a smaller number of shares, the exercise price
in effect immediately prior to such combination will be
proportionately increased.
6. Reorganization, Reclassification, Consolidation, Merger
or Sale. Any reorganization, reclassification, consolidation,
merger or sale of all or substantially all of the Company's
assets to another entity which is effected in such a way that
holders of Common Stock are entitled to receive (either directly
or upon subsequent liquidation), stock, securities or amounts
with respect to or in exchange for Common Stock is referred to
herein as an "Organic Change." Prior to the consummation of any
Organic Change, the Company will make appropriate provisions (in
form and substance satisfactory to the holder of the outstanding
principal amount of the Option then outstanding) to insure that
the holder of the Option will thereafter (for so long as such
holder has the right to exercise the Option) have the right to
receive, in lieu of or in addition to the shares of Common Stock
immediately theretofore issuable upon the exercise of the Option,
such shares of stock, securities or assets as such holder would
have received in connection with such Organic Change if such
holder had exercised the Option immediately prior to such Organic
Change. In any such case, the Company will make appropriate
provisions (in form and substance satisfactory to the holder of
the Option) to insure that the provisions of this part 6 will
thereafter (for so long as such holder has the right to exercise
the Option) be applicable to the Option.
IN WITNESS WHEREOF, the Parties have executed this
Agreement on the date first written above.
ELECTROSOURCE, INC. CORNING INCORPORATED
By: /S/ XXXXX X. XXXXX By:/S/ XXXXX X. XXXXXX
Xxxxx X. Xxxxx
Vice President Finance Printed Name: Xxxxx X. Xxxxxx
and General Counsel
Its: Division Vice President and
Director
