Exhibit 10.14
NON QUALIFIED STOCK
OPTION AGREEMENT
THIS AGREEMENT, ("Agreement"), made as of April 20, 1999, by and
between TREESOURCE INDUSTRIES, INC., hereinafter referred to as the "Company"
and Xxxxxx X. Xxxxxxxx, hereinafter referred to as the "Employee."
W I T N E S S E T H :
WHEREAS, the Company has adopted the 1996 Stock Option Plan ("Plan")
for the purpose of encouraging the acquisition of its common stock, no par value
("Stock"), by key employees and thereby motivate special achievement on their
part, and the Company desires to grant the Employee an Option (as defined below)
pursuant to the Plan, and
WHEREAS, the Plan allows a one time grant for new employees for options
of up to 100,000 shares,
WHEREAS, the Employee desires to obtain the Option,
WHEREAS, Company and Employee have entered into a certain Employment
Contract.
NOW, THEREFORE, in consideration of services rendered and to be
rendered by the Employee and of the mutual covenants and agreements hereinafter
set forth, the parties hereto agree as follows:
1. Grant of Option.
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The Company hereby, on the date of this Agreement, grants the Employee
the option ("Option") to purchase 100,000 shares of Stock on the terms and
conditions hereinafter set forth and subject to the provisions of the Plan. The
Option price per share shall be $0.3188.
2. Exercise of Option.
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(a) Except as otherwise provided in paragraphs 3 and 6, the Option
shall become exercisable according to the following schedule; provided, however,
that notwithstanding anything in this Agreement to the contrary, neither the
Option nor any portion thereof is exercisable after the expiration of ten years
from the date the Option is granted:
Period of Holder's
Continuous Employment or Service
With the Company or Its
Subsidiaries From Percent of Total Option
the Option Grant Date That Is Exercisable
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Immediate 25%
After 1 Year 50%
After 2 Years 75%
After 3 Years 100%
(b) The Employee shall, in the event he elects to exercise the Option,
give the Company written notice of exercise. The notice shall specify the number
of shares to be purchased and be paid for as follows:
1) By the tender of cash or check of the Option exercise price and
amounts required under federal and state withholding tax laws or regulations; or
2) If and so long as the Common Stock is registered under Section 12
(b) or 12 (g) of the Securities Exchange Act of 1934 ("Exchange Act"), by
delivery of a properly executed exercise notice, together with irrevocable
instructions, to a brokerage firm designated by the Company to deliver promptly
to the Company the aggregate amount of sale proceeds to pay the Option exercise
price and amounts required under federal and state withholding tax laws or
regulations, and to the Company to deliver the certificates for such purchased
shares directly to such brokerage firm, all in accordance with the regulations
of the Federal Reserve Board.
3) The Option may be exercised by the Employee in whole or in parts;
provided, however, that no less than 100 shares shall be purchased under any
exercise unless the number purchased is the total number then purchasable under
the Option. All partial exercises shall be noted on the Company's and on the
Employee's copy of this Agreement. The Option shall not be exercisable with
respect to a fractional share.
3. Limitations on Exercise.
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The Option shall be subject to the following limitations on exercise:
(a) In the event employment or service with the Company terminates for
any reason other than for cause (as defined below), physical disability or
death, or any reason that results in the Company's being obligated to provide
the payments and benefits specified in Section 6.2.2 of the Employment Contract,
the Option may only be exercised within one month after the date of such
termination of employment or services, but in no event later than the remaining
term of the Option. In the event that employment is terminated under any
provision of the Employment Contract that results in the Company's being
obligated to provide the payments and benefits specified in Section 6.2.2 of the
Employment Contract, the Option may be exercised at any time within two (2)
years after the date of such termination of employment, but in no event later
than the remaining term of the Option. For the purposes of this agreement
"cause" shall consist of the following: (i)
willful and continual failure and refusal to comply with the reasonable express
directives of the Company's President; (ii) conviction for a felony or any crime
involving fraud or dishonesty in the performance of, or that reflects upon the
ability to perform duties on behalf of the Company; or (iii) circumstances of
gross negligence or exhibition of willful misconduct in the performance of
duties.
(b) In the event of the termination of employment or service for cause,
the Option shall automatically terminate on the date Employee is first notified
by the Company of such termination, unless the Board of Directors determines
otherwise.
(c) In the event of the termination of employment or service because of
total disability, the Option may be exercised only within one year after such
termination, but in no event later than the remaining term of the Option. For
purposes of this Agreement, the occurrence or nonoccurrence of total disability
shall be determined by the Plan Administrator consistent with the terms of the
Plan.
(d) In the event of death while employed by or providing service to the
Company or a subsidiary, the Option may be exercised at any time within one year
after the date of death, but in no event later than the remaining term of the
Option, and only if and to the extent Employee was entitled to exercise the
Option at the date of death, and only by the person or persons to whom rights
under the Option shall pass by will or by the laws of descent and distribution
of the state or country of domicile at the time of death.
(e) The Option may be exercised only if and to the extent Employee was
entitled to exercise such Option at the date of such termination. To the extent
that the Option is not exercised within the applicable period, all further
rights to purchase shares pursuant to such Option shall cease and terminate. In
no event may this Option be exercised later than its remaining term.
4. Holding Periods.
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Shares of Stock obtained upon the exercise of the Option may not be sold by
a person in violation of any applicable provisions of Section 16 of the Exchange
Act or any other law or applicable regulation.
5. Non Transferability of Options.
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Options granted under this Plan and the rights and privileges conferred
hereby may not be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution or, with respect to non qualified
stock options, pursuant to the terms of a qualified domestic relations order as
defined in the Internal Revenue Code ("Code"), and shall not be subject to
execution, attachment or similar process. Any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any Option or of any right or
privilege conferred hereby, contrary to the Code or to the provisions of the
Plan, or the sale or levy or any attachment or similar process upon the rights
and privileges conferred hereby shall be null and void.
6. Acceleration in Certain Events.
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Notwithstanding any other provisions of this Agreement, all Options
outstanding under this Agreement shall immediately become exercisable in full at
any time when any one of the following events has taken place: (a) The Company
undergoes a change of control, which for purposes of this Agreement is defined
as any sale, transfer or disposition of all or substantially all of the assets
of the Company, or the merger of the Company with another entity that results in
the shareholders of the Company obtaining less than 50% of the voting equity of
the resulting company, or an individual or company in any manner acquires or
controls more than 50% of the voting equity of the Company; (b) The Company
receives notice from a senior lender under the Company's Credit and Security
Agreement that such senior lender has declared that the Company is in default on
its loan obligations and that the loan obligations are being accelerated; or (c)
The Company terminates Employee's employment with the Company other than for
cause.
7. Adjustments.
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7.1 Adjustment of Shares
The aggregate number and class of shares for which this Option has been
granted and the exercise price per share thereof (but not the total price) shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of common stock resulting from a split-up or consolidation of shares or
any like capital adjustment, or the payment of any stock dividend.
7.2 Conversion of Options on Stock for Stock Exchange
Except as provided in Section 6 (a), if the shareholders of the Company
receive capital stock of another corporation ("Exchange Stock") in exchange for
their shares of common stock in any transaction involving a merger,
consolidation, acquisition of property or stock, separation or reorganization,
the Option granted hereunder shall be converted into an option to purchase
shares of Exchange Stock. The amount and price of a converted option shall be
determined by adjusting the amount and price of the Option granted hereunder in
the same proportion as used for determining the number of shares of Exchange
Stock the holders of the shares of common stock receive in such merger,
consolidation, acquisition or property or stock, separation or reorganization.
7.3 Fractional Shares
In the event of any adjustment in the number of shares covered by the
Option, any fractional shares resulting from such adjustment shall be
disregarded and the option shall cover only the number of full shares resulting
from such adjustment
7.4 Determination of Board to Be Final
All Section 7 adjustments shall be made by the Board of Directors of
the Company, and its determination as to what adjustments shall be made, and the
extent thereof, shall be presumed to be correct unless such determination is
inconsistent with the other terms and
requirements of this Section 7 or the terms and requirements of the Employment
Contract. Should any conflict exist between the terms of this agreement and the
terms of the Employment Contract, the terms of the Employment Contract shall
govern.
7.5 Further Adjustment of Awards
Subject to Sections 6 (a) and 7.2, the Board of Directors shall have
the discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Board of Directors, to take such further action as it determines to be
necessary or advisable, and fair and equitable to Employee, (but shall not be
limited to) establishing, amending or waiving the type, terms, conditions or
duration of, or restrictions on, the Option so as to provide for earlier, later,
extended or additional time for exercise and other modifications. The Board of
Directors may take such actions before or after any public announcement with
respect to such sale, merger, consolidation, reorganization, liquidation or
change in control that is the reason for such action.
7.6 Limitations
The grant of this Option will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
8. Rights as a Stockholder.
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As a holder of the Option issued pursuant to this Agreement, Employee
has no rights as a stockholder with respect to any common stock until the date
of issuance of a stock certificate for such shares. Except as otherwise
expressly provided herein, no adjustment shall be made for dividend or other
rights for which the record date occurs prior to the date such stock certificate
is issued.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, said execution being duly authorized, and the Employee has set his
hand hereby, on the date first hereinabove written.
TREESOURCE INDUSTRIES, INC. EMPLOYEE
By:
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Vice President - Administration Xxxxxx X. Xxxxxxxx
