Exhibit 10.19
ECOS GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), is effective as of the
2nd day of March, 1999, by and between ECOS Group, Inc., a Colorado corporation
(the "Company"), and [ ] (the "Optionee").
RECITALS
The Company is desirous of increasing the incentive of the Optionee
whose contributions are important to the continued success of the Company by
means of the grant to the Optionee of options to purchase shares of the
Company's common stock $.12 par value per share ("Common Stock").
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the parties hereby agree as follows:
1. GRANT OF OPTION
Subject to the terms and conditions of this Agreement, the Company
hereby grants to the Optionee as of March 2, 1999 (the "Date of Grant"), an
option (the "Option") to purchase an aggregate of [ ] shares shares (the "Option
Shares") of the Company's Common Stock. This Option is a non-qualified stock
option which is not intended to meet the requirements of an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. EXERCISE PRICE
The exercise price ("Option Price") of this Option shall be $0.06875
per Option Share, which is not less than the fair market value of the Common
Stock on the Date of Grant. The Option Price of this Option shall be subject to
adjustment in the event of changes in the capitalization of the Company, as set
forth in Section 10 of this Agreement.
3. ADMINISTRATION
This Agreement shall be administered by the Board of Directors of the
Company (the "Board") or a committee appointed by the Board (both of which are
hereinafter referred to as the "Committee"). The Committee shall have the full
power and authority to take all actions, and to make all determinations required
or provided for under this Agreement and all such other actions and
determinations not inconsistent with the specific terms and provisions of this
Agreement deemed by the Committee to be necessary or appropriate to the
administration of this Agreement. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in this Agreement in the manner and
to the extent it shall deem expedient to carry this Agreement into effect and
shall be the sole and final judge of such expediency. The interpretation and
construction by the Committee of any provision of this Agreement shall be final
and conclusive.
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4. TERM AND VESTING OF OPTION
(a) Option Period. This Option shall terminate and all rights to
purchase shares hereunder shall cease on March 2, 2004.
(b) Vesting and Exercisability. This Option shall become fully
exercisable on March 2, 2000 (the "Vesting Date"). The Committee
may in its discretion provide that any vesting requirement or other
such limitation on the exercise of this Option may be rescinded,
modified or waived by the Committee, in its sole discretion, at any
time and from time to time after the Grant Date, so as to
accelerate the time at which this Option may be exercised.
5. MANNER OF EXERCISE AND PAYMENT
(a) Exercise. This Option may be exercised to the extent permitted in
Section 4 by delivery to the Company on any business day, at its
principal office, addressed to the attention of the Stock Option
Administrator, of written notice of exercise, which notice shall
specify the number of shares with respect to which this Option is
being exercised, and shall be accompanied by payment in full of the
Option Price of the shares for which this Option is being
exercised, by one or more of the methods provided below. The
minimum number of shares of Common Stock with respect to which this
Option may be exercised, in whole or in part, at any time shall be
the lesser of 100 shares or the maximum number of shares available
for purchase under this Option at the time of exercise.
(b) Payment. Payment of the Option Price for the shares of Common Stock
purchased pursuant to the exercise of this Option shall be made (i)
in cash or in cash equivalents; (ii) to the extent permitted by
applicable law and agreed to by the Committee in its sole and
absolute discretion, through the tender to the Company of shares of
Common Stock, which shares shall be valued, for purposes of
determining the extent to which the Option Price has been paid
thereby, at their fair market value (determined in good faith by
the Committee) on the date of exercise; (iii) to the extent
permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, by delivering a written direction to
the Company that this Option be exercised pursuant to a "cashless"
exercise/sale procedure (pursuant to which funds to pay for
exercise of this Option are delivered to the Company by a broker
upon receipt of stock certificates from the Company) or a cashless
exercise/loan procedure (pursuant to which the Optionee would
obtain a margin loan from a broker to fund the exercise) through a
licensed broker acceptable to the Company whereby the stock
certificate or certificates for the shares of Common Stock for
which this Option is exercised will be delivered to such broker as
the agent for the individual exercising this Option and the broker
will deliver to the Company cash (or cash equivalents acceptable to
the Company) equal to the Option Price for the shares of Common
Stock purchased pursuant to the exercise of this Option plus the
amount (if any) of federal and other taxes that the Company, may,
in its judgment, be required to withhold with respect to the
exercise of this Option; (iv) to the extent permitted by applicable
law and agreed to by the Committee in its sole and absolute
discretion, by the delivery of a promissory note of the Optionee to
the Company on such terms as the Committee shall specify in its
sole and absolute discretion; or (v) by a combination of the
methods described in clauses (i), (ii), (iii) and (iv). Payment in
full of the Option Price need not accompany the written notice of
exercise if this Option is exercised pursuant to the cashless
exercise/sale procedure described above. An attempt to exercise any
Option granted hereunder other than as set forth above shall be
invalid and of no force and effect.
(c) Issuance of Certificates. Promptly after the exercise of this
Option, Optionee shall be entitled to the issuance of a certificate
or certificates evidencing his ownership of such shares of Common
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Stock. An individual holding or exercising an Option shall have
none of the rights of a stockholder until the shares of Common
Stock covered thereby are fully paid and issued to him and, except
as provided in Section 10 below, no adjustment shall be made for
dividends or other rights for which the record date is prior to the
date of such issuance.
6. TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY
(a) Termination of Service. If the Optionee's employment with the
Company or any Parent (as defined below) or Subsidiary (as defined below)
terminates for any reason other than Cause (as defined below), death or
?permanent and total disability? (within the meaning of Section 22(e)(3) of the
Code) of the Optionee, or if the Subsdiary or Parent that employs Optionee
ceases to be a Subsidiary or Parent of the Company, as the case may be, Options
granted to the Optionee will expire ninety (90) days following the last day of
the Optionee's employment with the Company, or, if earlier, the date specified
in this Agreement. Options will be exercisable only to the extent they are
exercisable on the date the Optionee's employment terminates. For purposes of
this Agreement, "Parent" shall mean any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if, at the time of the
granting of the option, each of the corporations other than the Company owns
stock possessing 50% of the total combined voting power of all classes of stock
in one of the other corporations in such chain. "Subsidiary" shall mean any
corporation in an unbroken chain of corporations beginning with the Company if,
at the time of the granting of the option, each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50% of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(b) Cause. Notwithstanding any provisions set forth in this Agreement,
if the Company or any Parent or Subsidiary terminates the Optionee's employment
for Cause (as defined below), all Options granted to the Optionee pursuant to
this Agreement shall terminate upon the date of such termination of employment
or service and the Optionee shall have no further right to purchase shares of
Common Stock pursuant to this Agreement Options. For purposes of this Agreement,
"Cause" means (i) any intentional misapplication by the Optionee of the
Company's funds, intended to result directly or indirectly in significant gain
or personal enrichment at the expense of the Company; (ii) the Optionee's
conviction of a crime involving moral turpitude; or (iii) any action or inaction
by the Optionee involving gross misconduct, willful and deliberate malfeasance
or gross negligence in the performance of the Optionee's duties. The Committee
shall determine whether Cause exists for purposes of this Agreement.
(c) Disability. In the event an Optionee shall cease to be employed by
the Company or any Parent or Subsidiary on a full-time basis by reason of his
"permanent and total disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any Option held by such Optionee at that time
may only be exercised within one year after the date on which the Optionee
ceased to be so employed, and only to the extent that the Optionee could have
otherwise exercised such Option as of the date on which he ceased to be so
employed.
(d) Death. In the event an Optionee shall die while in the employ of
the Company or a Parent or Subsidiary (or within a period of one month after
ceasing to be an Employee for any reason other than his "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) or within a
period of one year after ceasing to be an Employee by reason of such "permanent
and total disability"), the unexercised portion of any Option held by such
Optionee at the time of his death may only be exercised within one year after
the date of such Optionee's death, and only to the extent that the Optionee
could have otherwise exercised such Option at the time of his death. In such
event, such Option may be exercised by the executor or administrator of the
Optionee's estate or by any person or persons who shall have acquired the Option
directly from the Optionee by bequest or inheritance.
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7. TRANSFERABILITY OF OPTION
This Option is not negotiable and may not be sold, given, transferred,
assigned, pledged or otherwise hypothecated, directly or indirectly, by the
Optionee, other than by will or by the laws of descent and distribution or with
the consent of the Committee.
8. CHANGE IN CONTROL
In the event of a change in control, unless otherwise determined by the
Committee, all outstanding stock options will become fully vested and
immediately exercisable. The value of all outstanding grants may be cashed out
by the Company in an amount equal to the product of (i) the excess of (x) the
fair market value per share of the Common Stock over (y) the Option Price times
(ii) the number of shares of Common Stock then subject to such Option. For
purposes of this Section 8, a "change in control" will be deemed to occur if any
person shall (a) acquire direct or indirect beneficial ownership of more than
50% of the total combined voting power with respect to the election of directors
of the issued and outstanding stock of the Company (except that no Change in
Control shall be deemed to have occurred if the persons who were stockholders of
the Company immediately before such acquisition own all or substantially all of
the voting stock or other interests of such person immediately after such
transaction), or (b) have the power (whether as a result of stock ownership,
revocable or irrevocable proxies, contract or otherwise) or ability to elect or
cause the election of directors consisting at the time of such election of a
majority of the Board. A "person" for this purpose shall mean any person,
corporation, partnership, joint venture or other entity or any group (as such
term is defined for purposes of Section 13(d) of the Exchange Act) and a person
shall be deemed to be a beneficial owner as that term is used in Rule 13d-3
under the Exchange Act.
9. REQUIREMENTS OF LAW
(a) Violations of Law. The Company shall not be required to sell or
issue any shares of Common Stock under this Option if the sale or
issuance of such shares would constitute a violation by the
individual exercising this Option or the Company of any provisions
of any law or regulation of any governmental authority, including
without limitation, any federal or state securities laws or
regulations. Any determination in this connection by the Committee
shall be final, binding, and conclusive. The Company shall not be
obligated to take any affirmative action in order to cause the
exercise of this Option or the issuance of shares pursuant thereto
to comply with any law or regulation of any governmental authority.
(b) Withholding. The Committee may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding
of any taxes that the Company is required by any law or regulation
of any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with the exercise of
this Option, including, but not limited to, (i) the withholding of
delivery of shares of Common Stock upon exercise of this Option
until the holder reimburses the Company for the amount the Company
is required to withhold with respect to such taxes, (ii) the
canceling of any number of shares of Common Stock issuable upon
exercise of this Option in an amount sufficient to reimburse the
Company for the amount it is required to so withhold, (iii)
withholding the amount due from Optionee's wages or compensation
due such person, (iv) requiring the Optionee to pay the Company
cash in the amount the Company is required to withhold with respect
to such taxes
10. EFFECT OF CHANGES IN CAPITALIZATION
Subject to any required action by the shareholders of the Company, the
number of Option Shares covered by this Option as well as the Option Price shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock dividend or through any
recapitalization, reclassification, stock split-up, combination or Company
exchange of Common Stock (other than any such exchange or issuance of shares of
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Common Stock through which such shares are issued to effect an acquisition of
another business or entity). Such adjustment shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number of Option Shares or the Option Price.
11. DISCLAIMER OF RIGHTS
No provision of this Agreement shall be construed to confer upon any
individual, including Optionee, the right to remain in the employ of the Company
or any Parent or Subsidiary or to interfere in any way with the right and
authority of the Company or any Parent or Subsidiary either to increase or
decrease the compensation of any individual, including Optionee, at any time, or
to terminate any employment or other relationship between any individual,
including Optionee, and the Company or any Parent or Subsidiary.
12. MISCELLANEOUS
(a) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of
any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including,
without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of
the State of Florida, without application to the principles of
conflict of laws.
(c) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and
shall be deemed to have been duly given, made and received only
when personally delivered, one day following the day when deposited
with an overnight courier service for overnight priority service,
such as Federal Express, for delivery to the intended addressee or
three days following the day when deposited in the United States
mails, first class postage prepaid, certified or registered mail,
and addressed, in the case of the Company at its principal place of
business and, in the case of Optionee, as set forth below
Optionee's signature on the last page hereof. Any person may alter
the address to which communications or copies are to be sent by
giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
(d) Binding Nature of Agreement; Transferability. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and
assigns. This Agreement shall not be assignable or transferable by
the Optionee other than by will or the laws of descent and
distribution or with the consent of the Committee.
(e) Severability. The provisions of this Agreement are independent of
and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or
unenforceable in whole or in part.
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(f) Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not
affect its interpretation.
(g) Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however that if the final day of
any time period falls on a Saturday, Sunday or holiday on which
federal banks are or may elect to be closed, then the final day
shall be deemed to be the next day which is not a Saturday, Sunday
or such holiday.
(h) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
(i) Entire Agreement; Amendments. This Agreement (including the
documents and exhibits referred to herein) constitutes the entire
agreement among the parties and supersedes any prior
understandings, agreements, or representations by or among the
parties, written or oral, that may have related in any way to the
subject matter hereof. This Agreement may not be amended,
supplemented or modified in whole or in part except by an
instrument in writing signed by the party or parties against whom
enforcement of any such amendment, supplement or modification is
sought.
(j) Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual
intent, and thereof strict construction shall be applied against
any party. Any reference to any federal, state, local or foreign
statute or law shall be deemed also to refer to the rules and
regulations promulgated thereunder, unless the context requires
otherwise. The parties intend that each representation, warranty,
and covenant contained herein shall have independent significance.
If any party has breached any representation, warranty, or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact
that the party is in breach of the first representation, warranty
or covenant.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
(l) Pronouns. The use of any gender in this Agreement shall be deemed
to include all genders, and the use of the singular shall be deemed
to include the plural and vice versa, wherever it appears
appropriate from the context.
13. ACKNOWLEDGMENT
Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board or, if applicable, the Committee, upon
any questions arising under this Agreement.
[Signatures on the Following Page]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first above written.
ECOS GROUP, INC.
(The Company)
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
Accepted and Agreed to this ____ day of
_________________, 2000.
OPTIONEE
________________________
Name
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