Exhibit 10(i)
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the "Option
Agreement"), made as of this 12th day of November, 1998, by and
between Xxxxxx X. XxXxxxxx (the "Participant"), and ISITOP, Inc.
(the "Company")
W I T N E S S E T H:
WHEREAS, the Participant is a key management employee of the
Company, its parent or any subsidiary of the Company, and it is
important to the Company that the Participant be encouraged to
remain in the employ of the Company, its parent or any subsidiary
of the Company; and
WHEREAS, in recognition of such facts, the Company desires
to provide to the Participant an opportunity to purchase shares
of the common stock of the Company, as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for good and valuable consideration,
the Participant and the Company hereby agree as follows:
1. GRANT OF STOCK OPTION. The Company hereby grants to the
Participant a stock option (the "Stock Option") to purchase all
or any part of an aggregate of three thousand seven hundred fifty
(3,750) shares of its Common Stock, par value $0.30, (the
"Stock") as set forth below, under and subject to the terms and
conditions of this Option Agreement. The purchase price for each
share to be purchased hereunder shall be two dollars and thirteen
and one-third cents ($2.133333) (the "Option Price")
2. TIMES OF EXERCISE OF STOCK OPTION. The Participant shall
be eligible to exercise his Stock Option only after the Company
has repaid The Xxxxx Company ("Xxxxx") for all advances made by
Xxxxx to the Company pursuant to the Subscription Agreement
attached as Exhibit "A" plus any accrued interest and Xxxxx'x
initial $32,000 investment in the Company (the "Exercise Event").
In addition, the conditions of Section 8 hereof must be satisfied
before the Participant shall be eligible to exercise his Stock
Option. If the Participant's employment with the Company (or its
parent or of any one or more of the subsidiaries of the Company)
remains full-time and continuous at all times prior to the
Exercise Event, then the Participant shall be entitled, subject
to the applicable provisions of this Option Agreement having been
satisfied, to exercise on or after the applicable Exercise Event,
on a cumulative basis, the number of shares of Stock set forth in
the foregoing Section 1.
3. TERM OF STOCK OPTION. Stock Options shall be granted on
the following terms and conditions. Stock Options shall only be
granted to key management employees, directors or key
professional employees of the Company, its parent or any
subsidiary of the Company. No Stock Option shall be exercisable
more than ten (10) years from the date of grant. Subject to such
limitations, the Committee shall have the discretion to fix the
period ("Option Period") during which Stock Options may be
exercised. Provided, notwithstanding anything in this Option
Agreement to the contrary, if the employment of the Participant
is terminated for "Cause" prior to the expiration of the Option
Period, to the extent any Stock Options under this Option
Agreement have not been previously exercised, such Stock Options
shall automatically and immediately expire as of the date of such
termination of employment, regardless of the extent to which it
would have been otherwise exercisable at such time. For purposes
of this Option Agreement, termination of the Participant's
employment by the Company for Cause shall mean termination for
one of the following reasons: (i) the conviction of the
Participant of a felony by a federal or state court of competent
jurisdiction; (ii) an act or acts of dishonesty taken by the
Participant and intended to result in substantial personal
enrichment of the Participant at the expense of the Company; or
(iii) the Participant's willful breach or habitual neglect of the
duties which he is required to perform under the Employment
Agreement between the Company and the Participant.
4. NONTRANSFERABILITY OF STOCK OPTIONS. Except as otherwise
herein provided, any Stock Option granted shall not be
transferable otherwise than by will or the laws of descent and
distribution, and the Stock Option may be exercised only by him.
More particularly (but without limiting the generality of the
foregoing), the Stock Option may not be assigned, transferred
(except as provided above), pledged or hypothecated in any way,
shall not be assignable by operation of law and shall not be
subject to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other
disposition of the Stock Option contrary to the provisions hereof
shall be null and void and without effect.
5. EMPLOYMENT. So long as the Participant shall continue to
be a full-time and continuous employee of the Company, its parent
or one or more of the subsidiaries of the Company, any Stock
Option granted to him shall not be affected by any change of
duties or position. Nothing in this Option Agreement shall confer
upon the Participant any right to continue in the employ of the
Company, its parent or any of the subsidiaries of the Company, or
interfere in any way with the right of the Company, its parent or
any of the subsidiaries of the Company to terminate such
Participant's employment at any time.
6. SPECIAL RULES WITH RESPECT TO STOCK OPTIONS. With
respect to Stock Options granted hereunder, the following special
rules shall apply:
(a) Acceleration of Otherwise Unexercisable Stock
Options on Retirement. Death, Disability or Other Special Circum-
stances. The Committee, in its sole discretion, may permit (i) a
Participant who terminates employment due to retirement, (ii) a
Participant who terminates employment due to a disability, (iii)
the personal representative of a deceased Participant, or (iv)
any other Participant who terminates employment upon the
occurrence of special circumstances (as determined by the
Committee) to purchase all or any part of the shares subject to
Stock Option on the date of the Participant's retirement,
disability, death, or as the Committee otherwise so determines,
notwithstanding that all installments, if any, had not accrued on
such date.
(b) Number of Stock Options Granted. Participants may
be granted more than one Stock Option. In making any such deter-
mination, the Committee shall obtain the advice and
recommendation of the officers of the Company, its parent, or a
subsidiary of the Company which have supervisory authority over
such Participants. Further, the granting of a Stock Option under
this Option Agreement shall not affect any outstanding Stock
Option previously granted to a Participant under the Plan.
(c) Assumption of Outstanding Stock Options. To the
extent permitted by the applicable provisions of the Code, any
successor to the Company succeeding to, or assigned the business
of, the Company as the result of or in connection with a
corporate merger, consolidation, combination, reorganization or
liquidation transaction shall assume Stock Options outstanding
under this Option Agreement or issue new Stock Options in place
of such outstanding Stock Options. Provided, such assumption of
outstanding Stock Options is to be made on a fair and equivalent
basis in accordance with the applicable provisions of Section
424(a) of the Code; provided, further, in no event will such
assumption result in a modification of any Stock Option as
defined in Section 424(h) of the Code.
(d) Adjustments Under Changes in Capitalization. The
aggregate number of shares of Stock under Stock Options granted
under this Option Agreement, the Option Price and the total
number of shares of Stock which may be purchased by a Participant
on exercise of the Stock Option shall be appropriately adjusted
or modified by the Committee to reflect any recapitalization,
stock split, merger, consolidation, reorganization, combination,
liquidation, stock dividend or similar transaction involving the
Company. Provided, any such adjustment shall be made in such a
manner as to not constitute a modification as defined in Section
424(h) of the Code.
7. METHOD OF EXERCISING STOCK OPTIONS.
(a) Procedures for Exercise. The manner of exercising
the Stock Option herein granted shall be by written notice to the
Secretary or Personnel Manager of the Company prior to the date
the Stock Option, or part thereof, is to be exercised, and in any
event prior to the expiration of the Option Period. Such notice
shall state the election to exercise the Stock Option and the
number of shares of Stock with respect to that portion of the
Stock Option being exercised, and shall be signed by the person
or persons so exercising the Stock Option.
(b) Form of Payment. Payment for shares of Stock
purchased under this Option Agreement shall be made in full and
in cash or by check, Stock of the Company or a combination
thereof, at the time of exercise of the Stock Options as a
condition thereof, and no loan or advance shall be made by the
Company for the purpose of financing, in whole or in part, the
purchase of Stock. In the event that common stock of the Company
is utilized as consideration for the purchase of Stock upon the
exercise of a Stock Option, then, such common stock shall be
valued at "fair market value". For all purposes of effecting the
exercise of a Stock Option, the date on which the Participant
gives the notice of exercise to the Company will be the date he
becomes bound contractually to take and pay for the shares of
Stock underlying the Stock Option. The Committee may also adopt
such other procedures which it desires for the payment of the
purchase price upon the exercise of a Stock Option which are not
inconsistent with the applicable provisions of the Code which
relate to Stock Options.
(c) Payment of Withholding Taxes. No exercise of any
Stock Option shall be permitted nor shall any Stock be issued to
the Participant until the Company receives full payment for the
Stock purchased which shall include any required state and
federal withholding taxes. Further, upon the exercise of any
Stock Option, the Participant may direct the Company to retain
from the shares of Stock to be issued upon exercise of the Stock
Option that number of initial shares of Stock (based on fair
market value) that would be necessary to satisfy the requirements
for withholding any amounts of taxes due upon the exercise of
such Stock Option.
8. SECURITIES LAW RESTRICTIONS. Stock Options shall be
exercised and Stock issued only upon compliance with the
Securities Act of 1933, as amended (the "Act"), and any other
applicable securities law, or pursuant to an exemption therefrom.
9. SHAREHOLDER RIGHTS. The Participant shall have no rights
as a shareholder with respect to any shares of Stock subject to a
Stock Option prior to the purchase of such shares of Stock by
exercise of the Stock Option.
10. NOTICES. All notices or other communications
relating to the Plan and this Option Agreement as it relates to
the Participant shall be in writing and shall be mailed (U.S.
Mail) by the Company to the Participant at the then current
address as maintained by the Company or such other address as the
Participant may advise the Company in writing.
11. SUPERSEDES PRIOR GRANT. This Option Agreement
supersedes and replaces the prior grant to the Participant dated
the 1st day of April, 1997.
IN WITNESS WHEREOF, the Company has caused this Option
Agreement to be duly executed by its officers thereunto duly
authorized, and the Participant has hereunto set his hand and
seal, all on the day and year first above written.
ISITOP, INC., an Oklahoma corporation
By XXXX XXX, XX.
Xxxx Xxx, Xx., Vice President
"COMPANY"
XXXXXX X. XXXXXXXX
Xxxxxx X. XxXxxxxx, an individual
"PARTICIPANT"
