MERCURY WASTE SOLUTIONS INC.
NON STATUTORY STOCK OPTION AGREEMENT
This AGREEMENT is dated as of the 22nd day of January, 1997, by and
between Mercury Waste Solutions, Inc., a Minnesota corporation (the "Company")
and Xxxxxx X. Xxxxx ("Optionee").
WHEREAS, pursuant to the Stock Option Plan of the Company (the "Plan"),
the Board of Directors of the Company has authorized granting to Optionee a
Nonstatutory Stock Option to purchase certain shares of common stock of the
Company reserved for issuance pursuant to the Plan, such option to be for the
term and upon the terms and conditions hereinafter stated.
NOW, THEREFORE, it is hereby agreed:
1. GRANT OF OPTION. Pursuant to said action of the Board of Directors,
the Company hereby grants to Optionee the option to purchase, upon and subject
to the terms and conditions of the Plan, the terms and conditions of which are
incorporated in full herein by reference, thirty-five thousand (35,000) shares
of common stock (the "Option Stock") of the Company at the option price of $2.75
per share (the "Option"). The Company does not intend that the Option shall be
an Incentive Stock Option governed by the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). The Optionee (or any
other person claiming under the Optionee) shall not have any of the rights of a
shareholder with respect to the Option Stock until the due exercise of the
Option and payment of the option price in accordance with this Agreement.
Notwithstanding any other provision herein, the grant of the Option shall be
null and void if the initial public offering of the Company's common stock is
not effective by March 31, 1997.
2. TERMS AND CONDITIONS.
a. Term of Option; Exercise of Option. The Option shall terminate ten
(10) years after the date hereof, subject to the provisions contained herein.
The Optionee may exercise the Option for up to twenty percent (20%) of the
Option Stock each year commencing one year from January 22, 1997, with
additional installments of twenty percent (20%) exercisable on each of the
second, third, fourth and fifth year anniversary dates, in accordance with the
Nonstatutory Stock Option Vesting Schedule attached hereto as Exhibit A. Such
installments shall be cumulative and, if in any year the total number of shares
of Option Stock which may be purchased in such year is not purchased, the shares
not purchased may be purchased in any subsequent year during the term of the
Option.
b. Procedure for exercise. Subject to the foregoing, the Option may be
exercised in whole or in part from time to time by serving written notice of
exercise on the Company at its principal office, accompanied by the payment of
the option price in cash or check payable to the Company. As soon as is
practicable after such notice is received, Optionee shall be recorded on the
books of the Company as the owner of the Option Stock purchased and the Company
shall deliver to Optionee a stock certificate evidencing such ownership.
c. Death or Disability of Optionee. If the Optionee dies or becomes
Disabled (as hereinafter defined) and the Optionee has been at the time of his
death or Disability in continuous employment by the Company or a parent or
subsidiary corporation, the Option shall be exercisable in full on the date of
Optionee's death or Disability without regard to the installment percentages
provided in Section 2(a) above. The term "Disability" shall mean any physical or
mental impairment of Optionee, whether total or partial, which prevents
Optionee, in the reasonable judgment of the Company, from carrying out or
performing the major duties of his employment with the Company. The
determination of whether an Optionee has a Disability within the meaning of this
Section 2(c) shall be made in writing by the Board of Directors in its sole
discretion.
d. Termination of Employment for Cause. If Optionee's employment by the
Company or a parent or subsidiary corporation is terminated for cause, as is
hereafter defined ("Cause"), the Option, regardless of the extent vested, shall
be canceled immediately. Termination for Cause shall include termination for
violation of any employment agreement, or on fraud, embezzlement, securities law
violation, material violation or willful criminal violation of environmental
laws and regulations or an applicable agreement with a federal or state
environmental agency, sexual harassment of fellow employees, or if Optionee is
guilty of a substantial, willful and material act or acts of insubordination,
misconduct, dishonesty, or disloyalty against the Company, or gross misconduct
involving moral turpitude. The determination of the Board of Directors with
respect thereto shall be final and conclusive.
e. Termination of Employment other than for Cause. If Optionee's
employment shall terminate for any reason, voluntary or involuntary, other than
for Cause, the Optionee may at any time within three months after such
termination exercise the Option to the extent the Option was exercisable by the
Optionee on the date of the termination of his employment.
f. No Right to Continued Status as an Employee. This Option shall not
confer upon Optionee any right with respect to continued status as en employee
of the Company, nor shall it interfere in any way with the right of the Company
to terminate his status as an employee at any time.
3. OPTIONEE'S REPRESENTATIONS. In the event the Option Stock has not
been registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, Optionee shall, concurrently with the exercise of all or
any portion of this Option, deliver to the Company his Investment Representation
Statement in the form attached hereto as Exhibit B.
4. LIMITATIONS ON TRANSFERABILITY. All Option Stock issued to Optionee
shall be subject to the terms of a Shareholder Agreement, a copy of which is
attached hereto as Exhibit C.
5. MODIFICATION AND TERMINATION BY BOARD OF DIRECTORS. The rights of
Optionee are subject to modification and termination in certain events as
provided in the Plan.
6. WITHHOLDING. Company shall be entitled to withhold from amounts due
to Optionee amounts required to be withheld for income taxes, FICA (social
security) taxes or other purposes as required under any federal, state or local
law. If Company fails to withhold in the full amount or at the time required by
law, Company may make up the deficiency by withholding from later amounts due.
If such amounts withheld are at any time for any reason insufficient to meet
Company's withholding obligations, Company may (i) withhold and deduct the
deficiency from any amounts due to Optionee for any reason, and (ii) require
that Optionee pay the amount of such withholding deficiency to Company (and
Optionee shall make such payment immediately upon demand).
7. OPTIONEE BOUND BY PLAN. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
8. NOTICES. Any notice hereunder to the Company shall be addressed to
it at its principal office; and any notice hereunder to the Optionee shall be
addressed to him at the address set forth below; subject to the right of either
party to designate at any time hereunder in writing some other address.
9. ENTIRE AGREEMENT. This Agreement, together with the provisions of
the Plan, sets forth the entire agreement between the parties with respect to
the subject matter hereof, and supersedes and revokes all prior negotiations,
discussions, representations, understandings and agreements between the parties
with respect to such subject matter.
10. AMENDMENT; WAIVER. This Agreement may be amended only in a written
instrument signed by all parties hereto and setting forth the nature of such
amendment and the specific intent to so amend. Rights under this Agreement may
be waived only in a written instrument signed by the waiving party and setting
forth the specific right being waived and the specific intent to so waive. A
waiver of any particular right in any particular instance shall not be deemed a
waiver of any other right or a waiver of such right in any other instance.
11. BINDING NATURE. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective legal
representatives, heirs, successors and permitted assigns.
12. HEADINGS. Headings in this Agreement are for convenience of
reference only, and shall not alter the interpretation, meaning or effect of any
provision of this Agreement.
13. GOVERNING LAW. The validity, enforceability, interpretation and
effect of this Agreement shall be governed in all respects by the laws of the
State of Minnesota.
14. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MERCURY WASTE SOLUTIONS, INC
By___________________________________
Its:_________________________________
OPTIONEE:
_____________________________________
Xxxxxx X. Xxxxx
Address and Telephone Number of Optionee:
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000
EXHIBIT A
NONSTATUTORY STOCK OPTION VESTING SCHEDULE
Name of Employee: Xxxxxx X. Xxxxx
Date of Commencement of Employment: part-time, January 22, 1997; full-time,
March 1, 1997
Number of Shares Subject to Option: 35,000
Date of Grant: January 22, 1997
OPTION VESTING SCHEDULE
NO. OF SHARES
DATE EXERCISABLE
---- -----------
January 22, 1998 7,000
January 22, 1999 7,000
January 22, 2000 7,000
January 22, 2001 7,000
January 22, 2002 7,000
The above vesting schedule assumes continuous employment. Reference is
made to the Plan and the Agreement for your rights to exercise your Option in
the event of termination of employment during lifetime or upon death or
disability. The above vesting schedule is in all respects subject to the terms
of the Plan.
