Exhibit 4.4
THE SECURITIES REPRESENTED BY THIS OPTION AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
NEITHER THESE SECURITIES NOR THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER MAY
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR ANY EXEMPTION
THEREFROM UNDER SAID ACT.
JMAR TECHNOLOGIES, INC.
STOCK OPTION AGREEMENT
(Non-Qualified Stock Options)
THIS AGREEMENT, made and entered into as of October 14, 2002 (the "Grant
Date") by and between JMAR TECHNOLOGIES, INC., a Delaware corporation, (the
"Company"), and Xxxxxx X. Xxxxxx ("Optionee").
1. Option Grant and Accrual of Right to Purchase. As a matter of
separate inducement and agreement in connection with his service with the
Company, the Company hereby grants to Optionee, at the times, on the terms and
subject to conditions set forth herein, the right and "non-qualified stock
option" to purchase an aggregate of 500,000 shares of the Company's Common
Stock, par value $0.01, at the purchase price of $1.3062 per share (the
"Option"). The Option shall continue for, and is limited to, the period from and
after the Grant Date until October 14, 2012 (which period is hereinafter
referred to as the "Option Period"), except as and to the extent that (1) the
term of the Option may be reduced as provided in paragraphs 4 and 5 hereof or
(2) the Option may be terminated as provided in paragraph 13 hereof. In no event
may the Option or any portion thereof be exercised after the end of the Option
Period.
The Option shall become exercisable on the dates and in the installments
set forth in the following table:
Cumulative Percentage
Date Of Total Shares
Subject to Option
Which May Be Purchased
October 14, 2003 33.3%
October 14, 2004 66.6%
October 14, 2005 100.0%
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Prior to the expiration of the Option Period as specified above, and
subject to the provisions hereof, all or any portion of the shares of Common
Stock available for exercise may be purchased at any time and from time to time
after they become exercisable; provided that in no case may Optionee exercise
the Option for a fraction of a share.
(a) Change in Control. In the event of the occurrence of a
Change in Control (as defined below) or in the event that the Board, in its sole
and absolute discretion, determines that there exists a threat of a Change in
Control, each Option issued before the date of such occurrence or such
determination, which Option has not theretofore terminated as provided in
paragraphs 4, 5 or 13 below, shall immediately become exercisable in full as of
the date of such occurrence or such determination, whether or not such Option
was otherwise exercisable immediately before such occurrence or such
determination. For purposes of this Option, "Change in Control" shall be deemed
to occur if, at any time, any person (including, without limitation, any
individual, sole proprietorship, partnership, trust, corporation, association,
joint venture, pool, syndicate or other entity, whether or not incorporated), or
any two or more persons acting as a syndicate or group and thereby deemed
collectively to be a "person" within the meaning of Section 13(d)(3) of the
Exchange Act, shall acquire shares of stock of the Company, which acquisition
results in such person or persons owning in the aggregate shares of stock of the
Company possessing 15 percent or more of the total combined voting power of all
classes of stock of the Company, unless prior to such acquisition the full Board
shall by at least a two-thirds vote have specifically approved such acquisition
and determined that such acquisition shall not constitute a Change in Control
for purposes of this Option. Whether there exists a threat of a Change in
Control for purposes of this Option shall be determined by the Board, which
determination shall be final and conclusive.
2. Method of Exercise. The Option shall be exercisable by the giving of
written notice of exercise to the Company, in either of the manners set forth
below in this paragraph 2, specifying the number of shares to be purchased and
accompanying such notice with (a) payment by cash and/or check payable to the
Company of the full purchase price therefor or (b) in the discretion of the
Company's Board of Directors (the "Board") at the time of the exercise of the
Option regarding whether to permit payment in either of the following manners
(i) payment by a stock certificate or certificates, duly endorsed for transfer
to the Company, representing shares of Common Stock of
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the Company owned by the Optionee which shall be deemed to have a fair market
value on the date of exercise equal to the closing sale price of the Company's
Common Stock as reported by NASDAQ on the day prior to the date of exercise or
(ii) cash and/or a check payable to the Company and a stock certificate or
certificates representing shares of the Common Stock of the Company owned by the
Optionee, which, when added to the amount of the cash and/or check, have a fair
market value on the date of exercise, as defined in (i) above, equal to the
option price and (c) if required by the Company, the written representations and
agreements referred to in paragraph 7 hereof. Shares of stock delivered to the
Company in payment of tax withholdings are allowed only to the extent that such
delivery does not result in a charge to the earnings of the Company. If sent by
mail such written notice shall be deemed for all purposes to be given and the
Option exercised on the second business day following the date the same is
deposited in the United States mail, properly addressed to the Secretary of the
Company, with postage thereon prepaid. If personally delivered, such written
notice shall be deemed for all purposes to be given and the Option exercised on
the date the same is personally delivered to the Secretary of the Company (or
such other officer as may be designated by the Company in writing).
3. Who May Exercise. The Option shall be exercisable during the
lifetime of Optionee only by the Optionee. In the event that the notice
specified in paragraph 2 hereof shall, pursuant to the provisions of paragraph 5
hereof, be given by any person other than Optionee, such notice shall be
accompanied by appropriate evidence satisfactory to the Company to establish
such person's right to exercise the Option.
4. Exercise Upon Termination of Employment. Subject to the other
provisions hereof, if Optionee shall cease to be employed by the Company or any
subsidiary of the Company for any reason other than the death of Optionee, the
option privileges shall be limited to the shares which are immediately
exercisable on the date of termination of Optionee's service; and such option
privileges shall expire unless exercised by him or his successors as the case
may be, within 60 days after such termination.
5. Exercise in the Event of Death. Subject to the other provisions
hereof, in the event of the death of Optionee while in the employ of the Company
or a subsidiary of the Company, the Option may be exercised by the person or
persons to whom Optionee's rights under the Option shall pass by Optionee's will
or by the laws of descent and distribution. In such event, the Option may be
exercised during the one year period following the Optionee's date of death, but
only to the extent that Optionee was entitled to exercise the Option at the date
of death;
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provided, however, that in no event shall the Option or any portion thereof be
exercisable except during the Option Period. The right to exercise the Option
provided under this Paragraph 5, to the extent permitted hereunder, shall
terminate on the first anniversary of the date of the Optionee's death.
6. Stock To Be Issued. Shares to be issued on the exercise of the
Option may, at the election of the Company, be either authorized and unissued
shares or shares previously issued and reacquired by the Company.
7. Investment Representation and Restrictions on Disposition. By
accepting the Option, Optionee agrees for himself or herself and any other
person or persons entitled to exercise the Option pursuant to the provisions of
paragraph 5 hereof, that any and all shares purchased upon the exercise of the
Option shall be acquired for investment and not with a view to distribution, and
that if required by the Company: (i) each notice of the exercise of all or any
portion of the Option shall be accompanied by such representations and
agreements in writing, signed by the Optionee or such other person or persons
entitled to exercise the Option, as the case may be, and in form and substance
satisfactory to the Company, to such effect as the Company may deem necessary in
order to insure compliance with all laws, orders, rules, regulations, conditions
and undertakings of any kind which may be in effect at any time with respect to
the purchase or disposition of any shares purchased upon exercise of the Option,
including, but not limited to, a representation to the effect that the shares
covered by such notice are being acquired in good faith for investment and not
for distribution; (ii) the certificate or certificates evidencing the shares may
be legended with language appropriate to give notice of the restrictions
referred to in this paragraph 7; and (iii) the Company may place "stop orders"
or other impediments to the transfer of the shares until it is satisfied that
the transfer can be made in conformity with the representations and agreements
of Optionee made pursuant to this paragraph 7. Optionee understands that the
effect of this paragraph 7 is to restrict the right to sell, transfer or
otherwise distribute such shares except in accordance with the Securities Act of
1933 ("the Act") and all other laws, orders, rules, regulations, conditions and
undertakings of any kind which may be in effect at any time with respect to the
purchase or disposition of such shares. In the event such shares are or shall at
any time hereafter become duly registered under the Act, then those provisions
of this paragraph 7 which the Company determines are rendered unnecessary by
reason of such registration shall not be operative during such time as said
registration remains effective.
8. Restrictions on Exercise. Each exercise of the Option shall be
subject to the condition that if at any time the Company shall determine in its
discretion that (i) the satisfaction of withholding tax or other
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withholding liabilities, or (ii) the listing, registration or qualification of
any shares otherwise deliverable upon such exercise upon any securities exchange
or under any state or federal law, or (iii) the consent or approval of any
regulatory body, or (iv) the perfection of any exemption from any such
withholding, listing, registration, qualification, consent or approval is
necessary or desirable as a condition of, or in connection with, such exercise
or the issuance, delivery or purchase of shares hereunder, then in any such
event, such exercise shall not be effective, and the Company shall not be
required to accept a notice of exercise delivered by Optionee pursuant to
paragraph 2 hereof or the tender of any portion of the purchase price for the
shares covered by such exercise or to issue or deliver any certificate or
certificates for shares intended to be purchased by such exercise, unless such
withholding, listing, registration, qualification, consent, approval or
exemption shall have been effected, obtained or perfected free of any conditions
not acceptable to the Company.
9. Capital Adjustments. In the event that prior to the delivery by the
Company of all the shares covered by the Option, there shall be any change in
the outstanding common shares of the Company in the manner described in
paragraph 7 of the Company's 1999 Stock Option Plan, the number of shares
deliverable upon the exercise of the Option and the purchase price therefor
shall be adjusted as provided in said paragraph 7.
10. Issuance of Certificates and Rights as Shareholders. As soon as
practicable after the exercise of the Option as provided in paragraph 2 hereof,
but subject to the provisions of paragraphs 7, 8 and 9 hereof, the Company shall
issue and deliver to Optionee or any other person who has exercised the Option
pursuant to the provisions of paragraph 5 hereof a certificate evidencing the
shares purchased thereby. Neither Optionee nor any other person entitled to
exercise the Option pursuant to the provisions of paragraph 5 hereof shall be or
have any of the rights or privileges of a shareholder of the Company in respect
of any of the shares issuable upon the exercise of the Option unless and until a
certificate representing such shares shall have been issued and delivered.
11. Transferability of Option. Except as otherwise herein provided, the
Option and the rights and privileges conferred hereby may not be transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of the Option or any right or privilege conferred hereby contrary to the
provisions hereof, or upon the levy of any attachment or similar process on the
rights and privileges conferred hereby, contrary to the provisions hereof, the
Option and the rights and privileges conferred hereby shall
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immediately become null and void.
12. Interpretation of Agreement. The Board shall have the full and
final authority in its discretion to construe, interpret and define all terms
and provisions of this Agreement and to correct any defect or supply any
omission or reconcile any inconsistency herein and to prescribe rules and
regulations relating to the administration of the Option.
13. Cancellation of Option. Notwithstanding anything herein to the
contrary, the Company may cancel the Option, or any portion thereof, at any time
if the Company determines that Optionee has (i) committed fraud, embezzlement or
other act of dishonesty; (ii) engaged in other gross misconduct or deliberate
disregard of the law; (iii) made any unauthorized disclosure of any secret or
confidential information of the Company or any of its subsidiaries; (iv) engaged
in any conduct which constitutes unfair competition with the Company or any of
its subsidiaries; (v) induced or attempted to induce an employee of the Company
or any of its subsidiaries to terminate such employee's employment with the
Company or any of its subsidiaries; or (vi) induced or attempted to induce any
customer of, or other person having business relations with the Company or any
of its subsidiaries to terminate or curtail such relationship with the Company
or any of its subsidiaries.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
JMAR TECHNOLOGIES, INC.
Optionee: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
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