EDISON CONTROL CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
EDISON CONTROL CORPORATION, a New Jersey corporation (the "Company"), hereby
grants to Xxxx X. Xxxxxxxx ("Optionee"), in consideration for services to be
provided, an option to purchase a total of 97,222 shares (the "Shares") of
Common Stock of the Company, at the price determined as provided herein.
1. Nature of the Option.
This Option is a non-qualified option and is not intended to qualify for
incentive stock option special tax benefits to Optionee.
2. Exercise Price.
The exercise price is $3.00 for each share of Common Stock.
3. Exercise of Option.
Subject to Section 6 hereof, this Option shall be exercisable during its term
as follows:
(i) Right to Exercise.
The Options granted hereunder shall vest and become exercisable on the first
anniversary of the date of this Agreement.
(ii) Method of Exercise.
This Option shall be exercisable from time to time by written notice which
shall state the number of Shares in respect of which this Option is being
exercised, and which shall contain or be accompanied by such other
representations and agreements as to the holder's investment intent with
respect to such Shares of Common Stock as may reasonably be required by the
Company. Such written notice shall be signed by Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company.
The written notice shall be accompanied by payment of the exercise price.
No Shares will be issued pursuant to the exercise of this Option unless such
issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed.
(iii) Number of Shares Exercisable.
Each exercise of an Option hereunder shall reduce, pro tanto, the total
number of Shares that may thereafter be purchased under such Option.
4. Optionee's Representations.
In the event the Shares purchasable pursuant to the exercise of this Option
have not been registered under the Securities Act of 1933, as amended
("Securities Act"), 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 A.
5. Method of Payment.
Payment of the exercise price shall be by any of the following, or a
combination thereof:
(i) cash or certified check; or
(ii) if authorized by the Board, surrender to the Company of other shares of
common stock of the Company having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which
this Option is being exercised. The fair market value of the shares so
surrendered shall be determined by the Board in its sole discretion;
provided, however, that where there is a public market for the common stock,
the value per Share shall be the mean of the bid and asked prices of the
common stock on the last business day prior to the date of exercise, as
reported on the date of exercise in The Wall Street Journal (or, if not so
reported, as otherwise reported in the National Association of Securities
Dealers Automated Quotation (NASDAQ) System) or, in the event the common
stock is listed on a stock exchange, the value per Share shall be the mean of
the highest and lowest sales price of the common stock on such exchange on
the last business day prior to the date of exercise, as reported in The Wall
Street Journal.
6. Restrictions on Exercise.
This Option may not be exercised if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
7. Termination of Status as an Employee.
If Optionee's employment is terminated by the Company for Cause at any time,
Options granted hereunder (both unvested Options and vested but unexercised
Options) shall immediately terminate. If Optionee's employment is terminated by
the Company at any time for a reason other than for Cause, Options granted
herewith (both invested Options and vested, but unexercised Options) shall
be immediately exercisable for a period of three (3) months from the date of
termination of employment. If Optionee voluntarily terminates his employment
with the Company at any time, unvested Options shall immediately terminate
and vested Options shall be immediately exercisable for a period of three (3)
months from the date of termination of employment.
For purposes of this Agreement, a termination shall be for Cause only if the
Board of Directors of the Company shall determine that any one or more of the
following has occurred:
(i) the commission by the Optionee of a felony, fraud, embezzlement or an act
of serious criminal moral turpitude; or
(ii) the Optionee shall have committed a material breach of any one or more
of the management policies and directives of the Company and such breach shall
have continued in effect for a period of thirty (30) days after written
notice to the Optionee specifying such breach in reasonable detail.
8. Disability of Optionee.
Notwithstanding the provisions of Section 7 above, if Optionee is unable to
continue his employment with the Company as a result of his permanent and
total disability (as defined in Section 22(e)(3) of the Code), he may, but
only within three (3) months from the date of termination of employment or
consulting relationship, exercise his Option to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise this Option at such date, or if he does not exercise it
within the time specified herein, this Option shall terminate.
9. Death of Optionee.
Upon the death of Optionee, this Option shall terminate and be of no further
effect, except that if Optionee's death occurs during the term of this Option
and at the time of his death, Optionee was an Employee of the Company and had
been in continuous status as an Employee since the date of grant of the
Option, this Option may be exercised, at any time within three (3) months
following the date of Optionee's death, by Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only as to the number of Shares subject to this Option as to which the right
to exercise had accrued to the Optionee at the date of death.
10. Non-Transferability of Option.
This Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by
him. The terms of this Option shall be binding upon the executors,
administrators, heirs and successors of Optionee.
11. Term of Option.
This Option may not be exercised more than ten (10) years from the date of
grant of this Option.
12. Registration.
This Company shall register the shares on a registration statement on Form
S-8 within one year of the date hereof.
DATE OF GRANT: June 21, 1996
EDISON CONTROL CORPORATION
a New Jersey corporation
By: /s/ Xxxx X. XxXxxxxxx
Name: Xxxx X. XxXxxxxxx
Title: President
Agreed to this 21st day of
June, 1996.
By: Xxxx X. Xxxxxxxx
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
SELLER: EDISON CONTROL CORPORATION
COMPANY: EDISON CONTROL CORPORATION
SECURITY: COMMON STOCK
AMOUNT:
DATE:
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Seller and to the Company, the following:
(a) I am aware of the Company's business affairs and financial condition,
and have acquired all such information about the Company as I deem necessary
and appropriate to enable me to reach an informed and knowledgeable decision
to acquire the Securities. I am purchasing these Securities for my own
account for investment and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes of the Securities Act
of 1933, as amended ("Securities Act").
(b) I understand that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment
intent as expressed herein.
(c) I further understand that the Securities may not be sold publicly and
must be held indefinitely unless they are subsequently registered under the
Securities Act or unless an exemption from registration is available. I am
able, without impairing my financial condition, to hold the Securities for
an indefinite period of time and to suffer a complete loss on my investment.
I understand that the Company is under no obligation to register the
Securities. In addition, I understand that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering
subject to the satisfaction of certain conditions, including, among other
things: (1) the availability of certain public information about the Company;
(2) the resale occurring not less than two years after the party has purchased
and made full payment for, within the meaning of Rule 144, the securities to
be sold; and, in the case of an affiliate, or of a non-affiliate who has held
the securities less than three years (3) the sale being made through a broker
in an unsolicited "broker's transaction" or in transactions directly with a
market maker (as said term is defined under the Securities Exchange Act of
1934) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein, if applicable.
(e) I further understand that at the time I wish to sell the Securities there
may be no public market upon which to make such a sale, and that, even if
such a public market then exists, the Company may not be satisfying the
current public information requirements of Rule 144, and that, in such event,
I would be precluded from selling the Securities under Rule 144 even if the
two-year minimum holding period had been satisfied. I understand that the
Company is under no obligation to make Rule 144 available.
(f) I further understand that in the event all of the applicable requirements
of Rule 144 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such person and
their respective brokers who participate in such transactions do so at their
own risk.
Signature of Purchaser:
Date: , 19 _
