ADUROMED INDUSTRIES, INC. STOCK OPTION AGREEMENT WITH DAMIEN TANAKA
Exhibit
4.02
WITH
XXXXXX XXXXXX
This
Non-Statutory Option Agreement (the "Agreement") is made and entered into as
of
August 4, 2008 by and among ADUROMED INDUSTRIES, INC., a Delaware Corporation
with a principal of business at 0 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxx 00000,
of the one part (hereinafter referred to as “AII” or the “Corporation”), and
Xxxxxx Xxxxxx, of
the
other part (the
"Optionee").
RECITALS
WHEREAS,
by action unanimously taken by the Board of Directors of the Corporation on
July
31, 2008, the Board approved the 2008 Non-Statutory Stock Option Plan (“Plan”)
of the Corporation and authorized the Corporation to provide for the granting
of
option rights under the Plan to employees, consultants and non-employee
directors of the Corporation and the Corporation’s wholly-owned subsidiary,
Aduromed Corporation (“Aduromed”), to purchase shares of the Corporation’s
common stock, par value $0.0001 per share (“Common Stock”) in connection with
the transactions contemplated by that certain Master Restructuring Agreement,
dated as of July 10, 2008 by and among the Corporation, Aduromed and the other
signatories listed on the signature pages thereto (the “MRA”); and
WHEREAS,
in order to facilitate the purpose of the MRA, the Corporation wishes to grant
to Optionee the right and option to purchase 10,000,000 shares of Common Stock
under the Plan;
NOW,
THEREFORE,
the parties hereto hereby agree as follows:
1.
Grant
of Option.
The
Corporation hereby grants to Optionee and to his permitted designees and
assignees, the right and option (“Option”) to purchase a total of 10,000,000
shares of Common Stock (the “Optioned Shares”). It is understood and
acknowledged that this Option is designated as a non-statutory stock option
that
will not qualify as an incentive stock option under Section 422 of the Internal
Revenue Code (the “Code”).
2.
Option
Price.
The
price to be paid for the Optioned Shares to be issued upon exercise of this
Option or any part thereof shall be $0.025 per share (the "Exercise Price").
1
3.
Rights
to Exercise.
The
rights to exercise this Option shall vest with respect to 3,333,333 shares
of
Common Stock immediately, with respect to an additional 3,333,333 shares of
Common Stock on August 4, 2009, and with respect to the remaining 3,333,334
shares of Common Stock on August 4, 2010.
4.
Securities
Law Requirements.
To the
extent this Option shall have vested as provided in Section 3 above, it may
be
exercised in whole or in part at any time, subject to an opinion of legal
counsel for the Corporation (which shall not be unreasonably withheld by the
Corporation) that, at the time of such exercise, the issuance of the Optioned
Shares is in compliance with the provisions of the Securities Act of 1933,
as
amended, and the rules and regulations promulgated there under (the "Securities
Act").
5.
Term
of the Options.
The
Option shall remain exercisable as to Optioned Shares for five (5) years from
the date of vesting of such Optioned Shares.
If
the
Optionee is terminated as an employee without cause (as defined in any
employment agreement with the Corporation applicable to Optionee) then all
of
Optionee's unvested Options shall immediately vest and become exercisable and
the term of any such Options shall be extended to the fifth anniversary of
Optionee's employment termination date.
Should
the Optionee’s service be terminated for cause (as defined in any employment
agreement with the Corporation applicable to Optionee), then in any such event
this Option shall terminate immediately and with respect to all unvested shares
of Common Stock.
In
the
event Optionee is unable to continue as an employee as a result of his total
and
permanent disability (as defined in Section 22(e)(3) of the Code), all of
Optionee's unvested Options shall immediately vest and become exercisable and
the term of any such Options shall be extended to the fifth anniversary of
Optionee's employment termination date.
During
the term of this Option if the Optionee was at the time of his death an
employee, all of the Optionee's unvested Options shall immediately vest and
become exercisable and the term of any such Options shall be extended to the
fifth anniversary of the Optionee's date of death and the Option may be
exercised by the Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance.
If
during
the term of this Agreement and while the Optionee remains an employee of the
Corporation, the Corporation shall be subject to a Change in Control, then
in
such case all of the Optionee's unvested Options shall immediately vest and
become exercisable and the term of any such Options shall be extended to the
fifth anniversary of the date of such Change in Control.
"Change
in Control" shall mean any merger, consolidation, sale of assets
or
other similar transaction or series of transactions involving the Corporation,
other than any such transaction or transactions following which the Corporation
or its stockholders continue to own a majority of the combined voting
power
of
the outstanding securities of the Corporation or other entity surviving
or
succeeding to the business of the Corporation.
2
6.
Registration
Rights.
The
Corporation hereby covenants and agrees to register on an SEC Form S-8, or
other
applicable SEC Form, as soon as reasonably practicable, as may be necessary
under the Securities Laws to permit the resale of the Optioned Shares issued
upon exercise of this Option by the Optionee.
7.
Nontransferability.
Except
as otherwise provided herein or unless the Corporation otherwise consents in
writing, the rights of Optionee hereunder shall be non-assignable and
non-transferable by the Optionee, either voluntarily or by operation of law,
and
shall not be pledged or hypothecated in any way. Except as otherwise provided
herein, any attempted alienation, assignment, pledge, hypothecation, attachment,
execution or similar process, whether voluntary or involuntary, with respect
to
all or any part of the Options or any right thereunder, shall be null and void
and, at the Corporation's option, shall cause all of Optionee’s rights under
this Agreement to terminate.
8.
Effect
of Exercise.
Upon
exercise of all or any part of this Option, the number of shares of Common
Stock
subject to this Option being exercised under this Agreement shall be reduced
by
the number of shares with respect to which such exercise is made.
9.
Method
of Exercise.
Each
exercise of this Option shall be by means of a written notice of exercise in
substantially the form attached hereto as Exhibit A delivered to the Secretary
of the Corporation at its principal office and accompanied by payment in full,
by certified or bank or cashier’s check payable to the Corporation, of the
Exercise Price for each share of Common Stock purchased under the Option. Such
notice shall specify the number of shares of Common Stock with respect to which
the Option is exercised and shall be signed by the person exercising the Option.
If the Option is exercised by a person other than Optionee, such notice shall
be
accompanied by proof, reasonably satisfactory to the Corporation, of such
person's right to exercise the Option.
10.
Issuance
of Shares.
Subject
to the foregoing conditions, the Corporation, as soon as reasonably practicable
after receipt of a proper notice of exercise and without transfer or issue
tax
or other incidental expense to the person exercising an Option, shall, subject
to the conditions herein expressly stated, deliver to such person at the
principal office of the Corporation, or such other location as may be agreed
in
writing by the Corporation and such person, one or more certificates for the
shares of Common Stock with respect to which the Option has been exercised.
Such
shares shall be fully paid and nonassessable and shall be issued in the name
of
such person.
11.
Limitation
of Optionee’s Rights.
Neither
Optionee nor any person entitled to exercise an Option shall be or have any
of
the rights of a shareholder of the Corporation in respect of any share issuable
upon the exercise of the Option unless and until a certificate or certificates
representing shares of Common Stock shall have been issued and delivered upon
exercise of the Option in full or in part. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued.
12.
Consent
Required to Transfer.
Except
as otherwise expressly provided herein, if at any time the Corporation shall
have filed a registration statement pursuant to the federal securities laws
in
connection with any underwritten public offering by the Corporation of its
equity securities, the Optionee shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
of or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to any Optioned Shares held by him without the prior
written consent of the Corporation or its underwriters. Such limitations shall
be in effect for such period of time from and after the effective date of such
registration statement, or withdrawal of the filing with the SEC, as may be
requested by the Corporation or such underwriters.
3
13.
Protection
Against Dilution.
13.1
Adjustment
Mechanism.
If an
adjustment of the Exercise Price is required pursuant to this Section 13, the
Optionee shall be entitled to purchase such number of additional shares of
Common Stock as will cause (i) the total number of shares of Common Stock it
is
entitled to purchase pursuant to this Option, multiplied by (ii) the adjusted
purchase price per share, to equal (iii) the dollar amount of the total number
of shares of Common Stock it is entitled to purchase before adjustment
multiplied by the total purchase price before adjustment.
13.2
Capital
Adjustment.
In case
of any stock split or reverse stock split, stock dividend, reclassification
of
the Common Stock, recapitalization, merger or consolidation, or like capital
adjustment affecting the Common Stock of the Corporation, the provisions of
this
Section 13 shall be applied as if such capital adjustment event had occurred
immediately prior to the effective date of this Option and the original purchase
price had been fairly allocated to the stock resulting from such capital
adjustment; and in other respects the provisions of this Section 13 shall be
applied in a fair, equitable and reasonable manner so as to give effect, as
nearly as may be, to the purposes hereof. A rights offering to stockholders
shall be deemed a stock dividend to the extent of the bargain purchase element
of the rights, if any.
13.3
Adjustment
for Spin Off.
If, for
any reason, prior to the exercise of this Option in full, the Corporation spins
off or otherwise divests itself of a part of its business or operations or
disposes of all or a part of its assets in a transaction (the "Spin Off') in
which the Corporation does not receive compensation for such business,
operations or assets, but causes securities of another entity (the "Spin Off
Securities") to be issued to security holders of the Corporation, then Optionee
shall be entitled to receive its pro rata share of the Spin Off Securities
determined as if it had exercised the entire unexercised portion of the Option
outstanding on the trading day immediately prior to record date (the "Record
Date") for determining the amount and number of Spin Off Securities to be issued
to security holders of the Corporation.
14.
Restricted
Securities.
Optionee
understands that the Option and the Common Stock issuable upon exercise of
the
Option are "restricted securities" under the Federal securities laws in as
much
as they are being acquired from the Corporation in a transaction not involving
a
public offering and that under such laws and applicable regulations such
securities may be resold without registration under the Securities Act of 1933,
as amended, only in certain limited circumstances. All certificates representing
shares of Common Stock purchased upon the exercise of the Option shall bear
the
following legend:
4
"THE
SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT
AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION
IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE
ACT."
15.
Notices.
Any
notice to the Corporation contemplated by this Agreement shall be addressed
to
it at its principal place of business in care of its President; and any notice
to the Optionee shall be addressed to Optionee at the address set forth above
or
at such other address as Optionee may hereafter designate in a writing delivered
to the Corporation as provided herein.
16.
Governing
Law.
This
Agreement has been made, executed and delivered in, and the interpretation,
performance and enforcement hereof shall be governed by and construed under
the
laws of the State of New York.
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By
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/s/
Xxxxx X. Xxxxxx
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OPTIONEE
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/s/
Xxxxxx Xxxxxx
|
XXXXXX
XXXXXX
5
EXHIBIT
A
OPTION
EXERCISE FORM
(To
be
executed only upon exercise of an Option)
The
undersigned hereby irrevocably exercises the foregoing designated Option for
the
purchase of that number of shares of the
Common Stock (par value $0.0001 par value per share), of Aduromed Industries,
Inc. set forth below, and hereby makes payment of the aggregate Exercise Price
therefor which is also set forth below, all on the terms and subject to the
conditions specified in the Stock Option Agreement between him and the
Corporation.
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Number
of Shares:
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||||
|
x
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||||
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Exercise
Price:
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$
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||
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Aggregate
Exercise
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||||
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Price
paid:
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$
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Dated:
HOLDER:
____________________
ACCEPTED:
Dated:
6
