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EXHIBIT 10.25
November 11, 1999
NONQUALIFIED STOCK OPTION AGREEMENT
A STOCK OPTION for a total of 150,000 shares of common stock (hereinafter the
"Option"), of N2H2, Inc., a Washington corporation (the "Company"), is hereby
granted to Xxxxxxx Xxxxxxxxxx (the "Optionee"), at the price and subject to the
terms and provisions set forth below. For purposes of this Agreement the term
"shares" shall be deemed to apply to shares of common stock of the Company as
of the date hereof.
1. OPTION PRICE. The option price is 100% of the fair market value as
determined by the Board of Directors and measured by the average of the
high and low trading price of the Company's Common Stock on November 11th,
1999.
2. VESTING AND EXERCISE OF OPTION. The Option shall vest and be exercisable
in accordance with the following provisions:
a. Schedule of Vesting and Rights to Exercise. The Option shall be
vested and exercisable as follows:
Years Percent of Number of
Following Grant Option Vested Shares Exercisable
After One Year 25% 37,500
After Two Years 50% 75,000
After Three Years 75% 112,500
After Four Years 100% 150,000
b. Method of Exercise. The Option shall be exercisable by a written
notice which shall;
i. state the election to exercise the Option, the number of
shares in respect of which it is being exercised;
ii. contain such representations and agreements as to the
holder's investment intent with respect to such shares of
common stock, acquired by exercise of the Option, as may be
satisfactory to the Company;
iii. be signed by the person entitled to the Option; and
iv. be in writing and delivered in person or by certified mail
to the President or Secretary of the Company.
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Payment of the purchase price of any shares with respect to which an Option is
being exercised shall be by check. The certificate or certificates for shares of
common stock as to which the Option shall be exercised shall be registered in
the name of the person exercising the Option. Options hereunder may not at any
time be exercised for a fractional number of shares.
c. Restriction on Exercise. No Option may be exercised if the issuance of
the shares upon exercise would constitute a violation of any applicable
federal or state securities or other law or valid regulation. As a
condition to the exercise of this Option the Company may require the
person exercising the Option to make any representation and warranty
to the Company as the Company's counsel believes may be required by any
applicable law or regulations.
The following legend will appear on all certificates for option shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE ACQUIRED BY THE
REGISTERED HOLDER PURSUANT TO REPRESENTATION THAT THE HOLDER IS
ACQUIRING THESE SHARES FOR THE HOLDER'S OWN ACCOUNT, FOR INVESTMENT.
THESE SHARES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN
EXEMPTION FROM SUCH REGISTRATION STATEMENT.
3. Non-Transferability of Option. Except as otherwise provided herein, no
Option may be sold, pledged, assigned or transferred in any manner, other
than by will or the laws of descent and distribution, and may be exercised
during the lifetime of the Optionee only by the Optionee or by the guardian
or legal representative of the Optionee. The terms of the Option shall be
binding upon the executors, administrators, heirs, successors, and assigns
of the Optionee.
4. Termination of Service to Company. An Option may only be exercised, to the
extent vested on the employee's last day of service to the Company as an
employee, for a period of one hundred (100) days after such last day of
service, but in no event later than (10) years after its grant.
5. Term of Option. No Option may be exercised more than ten (10) years from the
date of original grant, and may be exercised during such term only in
accordance with the terms of this agreement.
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6. Adjustments Upon Changes in Capitalization. The number and kind of shares
of common stock subject to this Option shall be appropriately adjusted
along with a corresponding adjustment in the Option price to reflect any
stock dividend, stock split, split-up or any combination, exchange or
change of shares, however accomplished.
7. Accelerated Vesting. Notwithstanding any provision to the contrary, in the
event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or Shares
by means of a sale, reorganization, liquidation, or otherwise, this
Option shall become immediately exercisable with respect to the full
number of Shares subject to this Option. If this Option is not exercised
prior to consummation of any such agreement, it shall terminate. In
addition, this Option shall vest and become exercisable upon certain
terminations of employment set forth in that certain Executive Employment
Agreement dated November 5th between the Optionee and the Company.
DATED: November 11, 1999 N2H2, Inc.
By /s/ Xxxxx Xxxxxxxxx
__________________________
Xxxxx Xxxxxxxxx, President
Optionee acknowledges and represents that he is familiar with the terms and
provisions of this Nonqualified Stock Option Agreement as set forth above and
hereby accepts this Option subject to all the terms and provisions hereof.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
of the Compensation Committee of the Company's Board of Directors with respect
to the interpretation of any provision under this Nonqualified Stock Option
Agreement.
DATED: November 11, 1999
/s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx, Optionee
