NONSTATUTORY STOCK OPTION GRANT AGREEMENT
Exhibit
10.38
I.C.
XXXXXX & COMPANY,
INC. AMENDED AND RESTATED <?xml:namespace prefix = o ns =
"urn:schemas-microsoft-com:office:office" />
OMNIBUS
STOCK
PLAN
This Grant
Agreement (the “Agreement”) is entered into with effect from December 6, 2004 by
and between I.C. XXXXXX & COMPANY, INC., a Delaware corporation (the
“Corporation”), and Xxxxx de la Rama (“Optionee”).
WHEREAS,
the
Corporation’s wholly owned subsidiary, I.C. Xxxxxx & Company LP (the
“Company”), has entered into an employment agreement dated as of the 1st day of
March 2004 with the Optionee (the “Employment Agreement”); and
WHEREAS,
pursuant
to the I.C. Xxxxxx & Company, Inc. Amended and Restated Omnibus Stock Plan
(the “Plan”), the Compensation Committee of the Board of Directors of the
Corporation determined, at a meeting held on the December 6, 2004 (the
“Grant
Date”), to grant an option to the Optionee, subject to the provisions of the
Plan and this Agreement, to purchase 25,000 shares of the Common Stock,
par
value of $.0001 per share, of the Corporation (the “Common Stock”) at the
exercise price in effect under the Plan for the Grant Date,
NOW, THEREFORE,
in
consideration of the premises, mutual covenants and agreements herein,
the
Corporation and Optionee agree as follows:
ARTICLE
1
GRANT
OF
OPTION
Section
1.1 Grant of Option.
The Corporation hereby grants to Optionee, pursuant to the provisions
of the Plan, a non-qualified stock option to purchase from the Corporation,
at a
price of $0.86 per share (the “Exercise Price”), up to 25,000 shares of Common
Stock, subject to the provisions of this Agreement (the “Option”). The Option shall expire at 5:00
p.m.
Eastern Time on February 28, 2009 (the “Expiration Date”), unless fully
exercised or terminated earlier pursuant to this Agreement. Unless stated otherwise herein,
capitalized terms in this Agreement shall have the meaning set forth in
the
Plan.
ARTICLE
2
VESTING
Section
2.1 Vesting Schedule.
Unless
the Option has earlier terminated
pursuant to the provisions of this Agreement, the Optionee’s right to purchase
Common Stock pursuant to this Option shall vest ratably on the first, second
and
third anniversaries of the Grant Date, provided that he shall be an active
employee of the Company on each of such dates.
Section
2.2 Acceleration of Vesting.
Unless
the Option has earlier terminated
pursuant to the provisions of this Agreement, vesting of the Option granted
to
Optionee hereunder shall be accelerated so that the unvested portion of
the
Option shall become 100% vested in Optionee upon the earliest to occur
of:
(i) Optionee’s termination of employment or consulting relationship due to
Disability, as defined in Article 4 hereunder; (ii) termination of
Optionee’s employment or consulting relationship with the Corporation as a
result of Optionee’s death; or (iii) a Change of Control that occurs while
Optionee is employed by or in a consulting relationship with the Corporation
or
an Affiliate. For purposes of this
Agreement, the term “Change of Control” shall have the meaning ascribed to such
term in the Amendment.
ARTICLE
3
EXERCISE
OF
OPTION
Section
3.1 Exercisability of Option.
Pursuant
to the terms of this Agreement,
the Option shall be exercisable, notwithstanding any contrary provision
or
requirement contained in the Plan, for a period of ten years commencing
on the
Grant Date (the “Option Term”), provided that, the Optionee’s employment shall
not be terminated for “Cause” (as such term is defined in the Employment
Agreement); and further provided, that in the event that vesting of this
Option
shall be accelerated pursuant to Section 2.2 hereof, Optionee (or the legal
representative of his estate) shall be entitled to exercise this Option,
to the
extent that it shall not have been exercised prior thereto, during the
one year
period ending on the date immediately preceding the first anniversary of
the
Termination Date or such shorter period as shall remain until the Expiration
Dates
Section
3.2 Manner of
Exercise. The Option may be
exercised, in whole or in part, by delivering written notice to the
Corporation’s Secretary in such form as the Administrator may require from time
to time; provided, however, that the Option may not be exercised at any
one time
as to fewer than ten shares (or such lesser number of shares as to which
the
Option is then exercisable). Such
notice shall specify the number of shares of Stock subject to the Option
as to
which the Option is being exercised, and shall be accompanied by full payment
of
the Exercise Price for such shares in accordance with this Section 3.2.
The
exercise shall be effective upon receipt by the Corporation’s Secretary of such
written notice accompanied by the required payment.
Payment of
the
Exercise Price shall be made (a) in cash (or via certified or cashier’s
check, or money order); (b) by a broker-assisted cashless exercise in
accordance with Regulation T of the Board of Governors of the Federal Reserve
System and the provisions of the next paragraph; or (c) by any combination
of the foregoing. In the
Administrator’s sole and absolute discretion, the Administrator may authorize
payment of the Exercise Price to be made, in whole or in part, by such
other
means as the Administrator may prescribe.
The Option may be exercised only
in multiples of whole shares and no
fractional shares shall be issued.
If the Stock
is
publicly traded on a national exchange, payment of the exercise price may
be
made, in whole or in part, subject to such limitations as the Administrator
may
determine, by delivery of a properly executed exercise notice, together
with
irrevocable instructions: (i) to a
brokerage firm approved by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection
with the
exercise, and (ii) to the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.
Section
3.3 Issuance of Shares and Payment
of Cash
upon Exercise. Upon
exercise of the Option, in whole or in part, in accordance with the terms
of
this Agreement and upon payment of the Exercise Price for the shares of
Stock as
to which the Option is exercised, the Corporation shall issue to Optionee,
the
brokerage firm specified in the Optionee’s delivery instructions pursuant to a
broker-assisted cashless exercise, or such other person exercising the
Option,
as the case may be, the number of shares of Stock so paid for, in the form
of
fully paid and nonassessable Stock and shall deliver certificates therefor
as
soon as practicable thereafter. The
stock certificates for any shares of Stock issued hereunder shall, unless
such
shares are registered or an exemption from registration is available under
applicable federal and state law, bear a legend restricting transferability
of
such shares.
ARTICLE
4
TERMINATION
OF
OPTION
Section
4.1 Termination, In General.
The
Option granted hereby shall
terminate and be of no force or effect after the Expiration Date set forth
in
Section 1.1, unless terminated prior to such time as provided below. For purposes of this Agreement,
“Termination Date” shall mean, (a) the effective date of termination of
Optionee’s employment with the Company, any successor entity thereto or any of
the Corporation’s other subsidiaries, if such employment is terminated for
“cause” pursuant to Section 9 of the Employment Agreement, without cause
pursuant to Section 10 of the Employment Agreement, by Optionee pursuant
to
Section 11(a)(iii) of the Employment Agreement, as amended by the Amendment
or
by Optionee pursuant to Paragraph 7 of the Amendment; or (b) if Optionee’s
employment with the Company, any successor entity thereto or any of the
Corporation’s other subsidiaries is terminated due to his death or “Disability”
(as such term is hereinafter defined), the earlier to occur of (i) the
Expiration Date, or (ii) the first anniversary of (x) the date of the Optionee’s
death or (y) the date upon which the Optionee shall receive written notice
of
the Administrator’s determination that Optionee is disabled (as the case may
be).
Section
4.2 Termination of Employment for
Cause. In the event that
the Optionee’s employment with the Company, any successor entity thereto or any
of the Corporation’s other subsidiaries is terminated for “cause,” this Option
shall terminate on the Termination Date with respect to all shares of Common
Stock not purchased hereunder prior to such Termination Date. For purposes of this Agreement,
“cause”
shall have the meaning attributed
thereto by Section 9 of the Employment
Agreement.
Section
4.3 Upon Optionee’s Death.
Unless
the Option has earlier terminated
for cause or due to the Optionee’s Disability, upon Optionee’s death, Optionee's
executor, personal representative, or the person(s) to whom the Option
shall
have been transferred by will or the laws of descent and distribution,
as the
case may be, may exercise all or any part of the outstanding Option, provided
such exercise occurs within one year after the date of Optionee’s death, but not
later than the Expiration Date of the Option. Unless sooner terminated, the Option
shall terminate upon the expiration of such one yearperiod.
Section
4.4 Termination of Employment by Reason
of
Disability. Unless the
Option has earlier terminated for cause or due to the Optionee’s death, in the
event that Optionee ceases, by reason of Disability, to be an employee
of the
Company, any successor entity thereto or any of the Corporation’s other
subsidiaries, the outstanding Option may be exercised in whole or in part
at any
time within one year after the date of Optionee's termination of employment
due
to Disability, but not later than the Expiration Date of the Option. Unless sooner terminated, the Option
shall terminate upon the expiration of such one yearperiod.
For purposes
of
this Agreement, Disability shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted
or can
be expected to last for a continuous period of not less than 12 months. The Administrator may require such
proof
of Disability as the Administrator in its sole discretion deems appropriate
and
the Administrator’s determination as to whether Optionee is Disabled shall be
final and binding on all parties concerned.
Section
4.5 Leave of Absence.
For
purposes of this Agreement, the
Optionee's employment with the Company, any successor entity thereto or
any of
the Corporation’s other subsidiaries shall not be deemed to terminate if the
Optionee takes any military leave, sick leave, or other bona fide leave
of
absence approved by the Administrator of 90 days or less. In the event of a leave in excess
of 90
days, the Optionee's employment shall be deemed to terminate on the 91st
day of
the leave unless the Optionee's right to re-employment with the Corporation
or
Affiliate remains guaranteed by statute or contract.
ARTICLE
5
ADJUSTMENTS;
BUSINESS
COMBINATIONS
Section
5.1 Adjustments for Events Affecting
Common
Stock. In the event of
changes in the Common Stock of the Corporation by reason of any stock dividend,
split-up, recapitalization, merger, consolidation, business combination
or
exchange of shares and the like, the Administrator shall, in its discretion,
make appropriate adjustments to the number, kind and price of shares covered
by
this Option, and shall, in its discretion and without the consent of the
Optionee, make any other adjustments in this Option, including but not
limited
to reducing the number of shares subject to the Option or providing or
mandating
alternative settlement methods such as settlement of the Option in cash
or in
shares of Common Stock or other securities of the Corporation or of any
other
entity, or in any other matters which relate to the Option as the Administrator
shall, in its sole discretion, determine to be necessary or appropriate.
Section
5.2 Pooling of Interests
Transaction.
Notwithstanding anything
in the Plan or this Agreement to the contrary
and without the consent of the Optionee, the Administrator, in its sole
discretion, may make any modifications to the Option, including but not
limited
to cancellation, forfeiture, surrender or other termination of the Option
in
whole or in part regardless of the vested status of the Option, in order
to
facilitate any business combination that is authorized by the Board to
comply
with requirements for treatment as a pooling of interests transaction for
accounting purposes under generally accepted accounting principles.
Section
5.3 Adjustments for Unusual
Events. The Administrator
is authorized to make, in its discretion and without the consent of the
Optionee, adjustments in the terms and conditions of, and the criteria
included
in, the Option in recognition of unusual or nonrecurring events affecting
the
Corporation, or the financial statements of the Corporation or any Subsidiary,
or of changes in applicable laws, regulations, or accounting principles,
whenever the Administrator determines that such adjustments are appropriate
in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Option or the Plan.
Section
5.4 Binding Nature of
Adjustments. Adjustments
under this Article 5 will be made by the Administrator, whose determination
as
to what adjustments, if any, will be made and the extent thereof will be
final,
binding and conclusive. No
fractional shares will be issued pursuant to this Option on account of
any such
adjustments.
ARTICLE
6
MISCELLANEOUS
Section
6.1 Non-Guarantee of
Employment. Nothing in the
Plan or this Agreement shall alter the employment status of Optionee, nor
be
construed as a contract of employment between the Corporation, the Company,
any
successor entity thereto or any of the Corporation’s other subsidiaries, and
Optionee, or as a contractual right of Optionee to continue in the employ
of the
Company, or as a limitation of the right of the Company, any successor
entity
thereto or any of the Corporation’s other subsidiaries to discharge Optionee at
any time with or without cause or notice.
Section
6.2 No Rights of Stockholder.
Optionee
shall not have any of the
rights of a stockholder with respect to the shares of Stock that may be
issued
upon the exercise of the Option until such shares of Stock have been issued
to
him upon the due exercise of the Option.
No adjustment shall be made for
dividends or distributions or other
rights for which the record date is prior to the date such certificate
or
certificates are issued.
Section
6.3 Non-Qualified Nature of
Option. This Agreement is
intended to be an agreement concerning a stock option arrangement which
does
not qualify under section 422 of the Internal Revenue Code, and this
Agreement shall be so construed.
Optionee acknowledges that, upon
exercise of this Option, Optionee will
recognize taxable income in an amount equal to the excess of the then Fair
Market Value of the shares over the Exercise Price and must comply with
the
provisions of Section 6.6 of this Agreement with respect to any tax withholding
obligations that arise as a result of such exercise.
Section
6.4 Confidential Information.
In
consideration of the Option granted
to the Optionee pursuant to this Agreement, Optionee agrees and covenants
that,
except as specifically authorized by the Corporation, the Optionee will
keep
confidential any trade secrets or confidential or proprietary information
of the
Corporation or any Affiliate which are now or which hereafter may become
known
to Optionee as a result of Optionee's employment by the Corporation, the
Company, any successor entity thereto or any of the Corporation’s other
subsidiaries, and shall not at any time, directly or indirectly, disclose
any
such information to any person, firm, corporation or other entity, or use
the
same in any way other than in connection with the business of the Corporation
or
any Affiliate, at all times during and after Optionee's employment.
Section
6.5 The Corporation's Rights.
The existence of this Option shall not affect in any way the
right or
power of the Corporation or its stockholders to make or authorize any or
all
adjustments, recapitalizations, reorganizations or other changes in the
Corporation's capital structure or its business, or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred or other
stocks
with preference ahead of or convertible into, or otherwise affecting the
Stock
or the rights thereof, or the dissolution or liquidation of the Corporation,
or
any sale or transfer of all or any part of the Corporation's assets or
business,
or any other corporate act or proceeding, whether of a similar character
or
otherwise.
Section
6.6 Withholding of Taxes.
The
Corporation, the Company, any
successor entity thereto or any of the Corporation’s other subsidiaries shall
have the right to deduct from any compensation or any other payment of
any kind
(including withholding the issuance of shares of Stock) due Optionee the
amount
of any foreign, federal, state or local taxes required by law to be withheld
as
the result of the exercise of the Option or the lapsing of any restriction
with
respect to any shares of Stock acquired on exercise of the Option; provided,
however, that the value of the shares of Stock withheld may not exceed
the
statutory minimum withholding amount required by law. In lieu of such deduction, the
Administrator may require Optionee to make a cash payment to the Corporation
or
an Affiliate equal to the amount required to be withheld. If Optionee does not make such
payment
when requested, the Corporation may refuse to issue any Stock certificate
under
the Plan until arrangements satisfactory to the Administrator for such
payment
have been made.
Section
6.7 Optionee.
Whenever
the word “Optionee” is used in
any provision of this Agreement under circumstances where the provision
should
logically be construed to apply to the estate, personal representative
or
beneficiary to whom this Option may be transferred by will or by the laws
of
descent and distribution, the word “Optionee” shall be deemed to include such
person.
Section
6.8 Nontransferability of
Option. The Option
shall be nontransferable otherwise than by will or the laws of descent
and
distribution and during the lifetime of Optionee, the Option may be exercised
only by Optionee or, during the period Optionee is under a legal disability,
by
Optionee’s guardian or legal representative. Except as provided above, the Option
may
not be assigned, transferred, pledged, hypothecated or disposed of in any
way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.
Section
6.9 Notices.
All
notices and other communications
made or given pursuant to this Agreement shall be in writing and shall
be
sufficiently made or given if hand delivered or mailed by certified mail,
addressed to Optionee at the address contained in the records of the
Corporation, or addressed to the Administrator, care of the Corporation
for the
attention of its Corporate Secretary at its principal office or, if the
receiving party consents in advance, transmitted and received via telecopy
or
via such other electronic transmission mechanism as may be available to
the
parties.
Section
6.10 Entire Agreement.
This
Agreement contains the entire
agreement between the parties with respect to the subject matter contained
herein. Any oral or written
agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement shall be void
and
ineffective for all purposes.
Section
6.11 Amendments.
This
Agreement may not be modified,
except as provided in the Plan or in a written document signed by each
of the
parties hereto.
Section
6.12 Conformity with Plan.
Except
for the provisions of this
Agreement that are contrary to the provsions of the Plan, (a) this Agreement
is
intended to conform in all respects with, and is subject to all applicable
provisions of, the Plan, which is incorporated herein by reference; and
(b) any
inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of this Agreement. In the event of any ambiguity in
this
Agreement or any matters as to which this Agreement is silent, the Plan
shall
govern. A copy of the Plan is
available upon request to the Administrator.
Section
6.13 Governing Law.
This
Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, other than
the
conflict of laws principles thereof.
Section
6.14 Headings.
The
headings in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation
of
this Agreement.
IN WITNESS
WHEREOF,
the Corporation has caused this Agreement to be executed by its duly authorized
officer as of the date first above written.
I.C. XXXXXX & COMPANY, INC.
By: /s/
Xxxxx
X
Xxxxx
Xxxxx X. Xxxxx, Chief Executive Officer
The undersigned
hereby acknowledges that he/she has carefully read this Agreement and the
Plan
and agrees to be bound by all of the provisions set forth in such documents.
OPTIONEE
/s/
Jesses De La
Rama
Date: 8/1/2005
CORPORATE
SECRETARY
I.C.
XXXXXX & COMPANY,
INC.
0000
XXXX
XXXXXX
XXXXXXXXX,
XXXXXXXX 00000
Gentlemen:
I hereby elect
to
exercise the Option dated December
6, 2004 concerning the grant made to me on December 6, 2004 by I.C. XXXXXX
&
COMPANY, INC. (the “Company”), subject to all the terms and provisions of the
Nonstatutory Stock Option Grant Agreement previously executed by me, and
the
I.C. XXXXXX & COMPANY, INC. AMENDED AND RESTATED OMNIBUS STOCK PLAN. Pursuant to this election, I wish
to
purchase ____________ shares of Common Stock of the Company at a price of
$___________ per share.
Enclosed
is payment for such
shares in the amount of $_____________ in the form of:
£
Cash
£
Certified
or Cashier’s Check
£
Money
Order
£
Irrevocable
Broker-Assisted Cashless
Exercise Instructions
I understand
that
my election will be effective the date this election notice, together with
the
cash, check or other payment of the purchase price, is received by the Company
as indicated below.
My
address of record
is:
And
my Social Security
Number is:
Date:________________________
______________________________________
(Optionee)
Received
by
I.C. XXXXXX & COMPANY, INC. on
___________________________, ______
By:
Title:
