EXHIBIT 99.1
NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE
INSYNQ, INC.
2000 LONG TERM INCENTIVE PLAN
Date of Grant: December 1, 2000
Name of Optionee: Xxxxx X. Xxxxx
Number of Shares: 500,000 (Five Hundred Thousand)
Price Per Share: $.01, (One Cent)
INSYNQ, Inc. (the "Company"), hereby grants to the above-named
Optionee (the "Optionee") an option (the "Option") to purchase from the
Company, for the price per share set forth above, the number of shares of
Common Stock, $.001 par value (the "Stock"), of the Company.
1. Terms. The terms and conditions of the Option granted hereby, to the
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extent not controlled by the terms and conditions contained in the Plan, are as
follows:
a. Price. The price at which each share of Stock subject to this
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Option may be purchased shall be the price set forth above, subject to any
adjustments that may be made pursuant to the terms of the Plan.
b. Exercise and Vesting. This Option may be exercised only to the
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extent that such Option is vested in accordance with the following table:
May Be Purchased
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Number of Shares Not Before Not After
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500,000 December 1, 2000 December 5, 2000
___________ ___________ ___________
___________ ___________ ___________
___________ ___________ ___________
Subject to the preceding vesting schedule, this Option may be exercised in
whole or in part. Except as set forth in Sections 4 or 5 hereof, (i) the
Optionee may not exercise this Option unless at the time of exercise he has
been in the employ of the Company and/or a Subsidiary of the Company
continuously since the date of the grant of this Option, and (ii) the
unvested portion of this Option shall terminate and be forfeited
immediately on the date the Optionee ceases to be a full-time employee of
the Company. This Option shall be exercisable during
the lifetime of the Optionee only by him or his guardian or legal
representative. Neither the Optionee nor any person exercising this Option
pursuant to Section 6 hereof may exercise this Option for a fraction of a
share.
2. Exercise and Payment.
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a. Manner of Exercise. The Optionee (or his representative, guardian,
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devisee or heir, as applicable) may exercise any portion of this Option
that has become exercisable in accordance with the terms hereof as to all
or any of the shares of stock by giving written notice of exercise to the
Company, in form satisfactory to the Board, specifying the number of shares
to be purchased and accompanying such notice with payment of the full
purchase price therefor in (i) lawful United States currency or (ii)
partially or entirely in whole shares of Stock of the Company with a Fair
Market Value Per Share (as defined in the Plan) equal to the Option price
for such number of shares as of the close of business on the immediately
preceding business day, with the balance, if any, to be paid in cash. This
Option may not be exercised for less than fifty (50) shares of Stock or the
number of shares of Stock remaining subject to this Option, whichever is
smaller. The election shall state the address to which dividends, notices,
reports, etc. are to be sent, and shall contain the Optionee's social
security number. Only one (1) certificate evidencing the Stock will be
issued unless the Optionee otherwise requests in writing. Shares of Stock
purchased upon exercise of the Option will be issued in the name of the
Optionee. The Optionee shall not be entitled to any rights and privileges
as a shareholder of the Company in respect of any shares of Stock covered
by this Option until such shares of Stock shall have been paid for in full
and issued to the Optionee.
b. Payment. Payment shall be in cash, or by certified or cashier's
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check payable to the order of the Company, free from all collection
charges. Notwithstanding the preceding, at the direction of the Board,
payment may be made by delivery of shares of Stock already owned by the
Optionee and having a fair market value equal to the aggregate Option
Price, or by a combination of cash and shares of Stock. Options shall be
deemed to have been exercised on the first date upon which the Company
receives the notice of exercise, payment of the purchase price and all
other documents, information and amounts required in respect of such
exercise by the Plan or this Agreement.
c. Shareholder's Agreement. Prior to the issuance of any shares of
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Stock under this Agreement and the Plan, the Participant shall execute a
copy of the then applicable shareholders agreement of XCEL Management, Inc.
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3. Withholding Tax. Prior to the exercise of this Option, and as a
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condition to the Company's obligation to deliver shares upon such exercise, or
in connection with any disposition of shares acquired pursuant to such exercise,
the holder of this Option shall make arrangements satisfactory to the Company
for the payment of any applicable federal or other withholding taxes payable as
a result thereof, which the Optionee may elect to satisfy by instructing the
Company to retain a sufficient number of shares of Stock to cover the amount
required to be withheld.
4. Termination of Employment. If Optionee's employment relationship with
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the Company shall be terminated by the Company for Cause (as defined below)
prior to the expiration or earlier termination of this Option, then all rights
of such Optionee under this Agreement shall terminate and shall be forfeited
effective as of the date of such termination of employment relationship.
(a) the substantial and continuing failure of the Optionee, after
notice thereof, to render services to the Company in accordance with the
terms or requirements of the Optionee's employment or consulting
relationship with the Company;
(b) disloyalty, gross negligence, willful misconduct, dishonesty or
breach of fiduciary duty to the Company;
(c) the commission of an act of embezzlement or fraud;
(d) deliberate disregard of the rules or policies of the Company which
results in direct or indirect loss, damage or injury to the Company;
(e) the unauthorized disclosure of any trade secret or confidential
information of the Company; or
(f) the commission of an act that constitutes unfair competition with
the Company or which induces any customer or supplier to break a contract
with the Company.
5. Death or Disability. In the event of termination of employment by
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reason of disability (of which the Committee shall be the sole judge) or the
death of the Optionee while he is an employee of the Company or a Subsidiary of
the Company, this Option shall be fully exercisable (whether or not exercisable
on the date of his death or termination of employment by reason of disability)
at any time prior to the expiration date of this Option or within twelve (12)
months after the date of death or termination of employment, whichever is the
shorter period, by the person or persons specified in the Optionee's will or, if
the Optionee shall have failed to make specific provision in his will for such
exercise or shall have died intestate, or in the case of disability, when
appropriate, by the Optionee's guardian or legal representative.
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6. Compliance with Laws. Each exercise of this Option shall, at the
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election of the Committee, be contingent upon receipt by the Company from the
holder of this Option of such written representations concerning his intentions
with regard to retention or disposition of the shares being acquired by exercise
of this Option and/or such written covenants and agreements as to the manner of
disposal of such shares as, in the opinion of the Committee, may be necessary to
ensure that any disposition by such holder will not involve a violation of the
Securities Act of 1933, as amended, or any similar or superseding statute or
statutes, or any other applicable statute or regulation, as then in effect.
This Option shall be subject to the requirement that if at any time the
Committee shall determine, in its discretion, that the listing, registration or
qualification of the shares of Stock subject to this Option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of the
issuance or delivery of shares hereunder, this Option may not be exercised
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
7. Rights as a Shareholder. Neither the Optionee nor his guardian or
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legal representatives shall be or have any of the rights or privileges of a
shareholder of the Company in respect of any of the shares deliverable upon the
exercise of this Option unless and until certificates representing such shares
shall have been issued and delivered.
8. No Right of Employment. Neither the granting of this Option, the
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exercise of any part hereof, nor any provision of the Plan or this Agreement
shall constitute or be evidence of any understanding, express or implied, on the
part of the Company or any Subsidiary of the Company to employ the Optionee for
any specified period.
9. Representation of Optionee. Optionee hereby represents and warrants to
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the Company that, if the option is exercised, the shares of Stock shall be
acquired solely for Optionee's own account, for investment purposes only and not
with a view to the distribution or resale thereof. Optionee understands and
acknowledges that (i) the share of Stock are unregistered and may not be sold
unless they are subsequently registered under the Securities Act and applicable
state securities laws, or unless an exemption from such registration is
available; (ii) the exemption from registration under Rule 144 under the
Securities Act may not ever become available; and (iii) the Company is under no
obligation to register the shares of Stock under the Securities Act or any state
securities law or to make Rule 144 (or any other exemption) available.
10. Non-Transferability. Except as otherwise provided in this Agreement,
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this Option and the rights and privileges conferred hereby may not be
transferred, assigned, pledged or hypothecated or otherwise disposed of 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 this Option, or any right or
privilege conferred hereby, contrary to the provisions hereof, this Option and
the rights and privileges conferred hereby shall immediately become null and
void.
11. Notice. Every notice or other communication relating to this
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Agreement shall be in writing and shall be mailed or delivered to the party for
whom it is intended, in each case properly addressed, if to the Company, at the
address of its executive offices in Tacoma, Washington,
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Attention: Chief Executive Officer, or if mailed or delivered to the Optionee,
at the address set forth below his signature to this Agreement (or at such other
address or in care of such other person as may hereafter be designated in
writing by either party to the other).
12. Governing Law. This Agreement will be governed by and construed in
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accordance with the laws of the State of Washington, other than with respect to
choice of laws rules and principles. The Optionee consents to personal
jurisdiction in any action brought in any court, federal or state, within the
State of Washington having subject matter jurisdiction in the matter.
13. Entire Agreement. This Agreement is the complete agreement and
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understanding between the parties with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations,
either oral or written, between the parties that may have related to the subject
matter hereof in any way. No change or modification of this Agreement shall be
valid or binding on the parties hereto, nor shall any waver of any term or
condition in the future be so binding, unless such change or modification or
waver shall be in writing and signed by the parties hereto.
14. Severability. In the event any provision of this Agreement is held to
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be unenforceable for any reason, the unenforceability thereof will not affect
the remainder of the Agreement, which shall remain in full force and effect and
enforceable in accordance with its terms. However, if any provision of this
Agreement is held to be unenforceable and such unenforceability shall
substantially alter this Agreement or change the intent and/or effect hereof,
the parties hereby agree to amend and/or modify this Agreement sufficiently to
restore the original intended effect or, as close thereto as possible.
15. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its name by its duly authorized officer on the date first above written, and the
Optionee has hereunto set his hand on such date.
COMPANY:
INSYNQ, INC.
By: /s/ Xxxx X. Xxxxx
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Its: Chairman/CEO
OPTIONEE:
/s/ Xxxxx X. Xxxxx
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Signature
Xxxxx X. Xxxxx
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Social Security Number
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EXHIBIT "A"
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NOTICE OF EXERCISE
(To be executed by Xxxxxx to exercise the
Warrant in whole or in part)
Insynq, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Option to Purchase Common Stock dated December 1, 2000 by and between
the Company and Xxxxx X. Xxxxx (the "Option')
Dear Sir or Madam:
The undersigned holder irrevocably elects to exercise the Option of Insynq,
Inc. to purchase 500,000 shares of Common Stock of Insynq, Inc. (the "Company")
subject to the Option, and hereby makes payment of the amount of $5000.00 in the
manner described below, representing the Exercise Price per share of Common
Stock multiplied by the number of shares of Common Stock to be purchased
pursuant to this exercise.
By:/s/ Xxxxx X. Xxxxx
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$__________cash
$5000 check
$__________wire transfer
ADDENDUM TO EMPLOYMENT AGREEMENT
DATED NOVEMBER 29, 2000
This addendum is to further clarify the Non Qualified Stock Option (the
"Option") granted on November 29, 2000. The Option is not granted pursuant to
Insynq, Inc.'s 2000 Long Term Incentive Plan but is being registered outside the
Plan. A separate Form S-8 registration statement will be filed to register the
shares subject to the Options. The shares shall be registered at issuance and
be issued no later than fifteen (15) days from the exercise date of this Option.
Dated: December 7, 2000
EMPLOYEE INSYNQ, INC.
/s/ Xxxxx X. Xxxxx /s/ Xxxx X. Xxxxx
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Xxxxx X. Xxxxx Xxxx X. Xxxxx
Chief Executive Officer
