Contract
Exhibit 10.1
PureSafe
Water Systems, Inc., a Delaware corporation (the “Company”), pursuant to the
Company’s 2008 Equity Incentive Plan (the “Plan”), has granted to Xxxxxx X.
Xxxxxxx (the “Optionee”) a stock option (the “Option”) to purchase a total of
three million (3,000,000) shares (each, a “Share”) of the common stock, par
value $0.001 per share (the “Common Stock”), of the Company, at the exercise
price of $0.041 per Share (the “Exercise Price”), on the terms and conditions
set forth in this Incentive Stock Option Plan Agreement (this “Agreement”) and,
in all respects, subject to the terms and conditions of the Plan. The
date of grant of the Option is April 17, 2009 (the “Date of
Grant”). Unless otherwise defined herein, the capitalized terms
defined in the Plan shall have the same defined meanings in this
Agreement. The Option is intended to be an Incentive Stock Option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”); provided, however, to the
extent that the Option does not qualify as an Incentive Stock Option under the
Code, such portion of the Option shall be treated as an option that does not
qualify as an Incentive Stock Option under the Code.
1. Duration. Subject
to the earlier termination as provided in this Agreement or under the Plan, the
Option shall expire and shall no longer be exercisable as of the close of
business on April 16, 2014 (the “Termination Date”).
2. Written Notice of
Exercise. The Option may be exercised only by delivering to
the President or Secretary of the Company, at the Company’s principal executive
offices, of a written notice of exercise substantially in the form described in
paragraph 8(b) of this Agreement, accompanied by this Agreement.
3. Anti
Dilution Provisions.
(a) If
there is any stock dividend, stock split or combination of shares of Common
Stock, the number and amount of Shares then subject to the Option shall be
proportionately and appropriately adjusted as determined by the Committee, whose
determination shall be final, conclusive and binding upon Optionee and the
Company.
(b) If
there is any other change in the Common Stock, including a recapitalization,
reorganization, sale or exchange of assets, exchange of shares, offering of
subscription rights, or a merger or consolidation in which the Company is the
surviving corporation, an adjustment, if any, shall be made in the Shares then
subject to the Option as the Board of Directors or Committee may deem equitable,
and whose determination shall be final, conclusive and binding upon Optionee and
the Company. Failure of the Board of Directors or the Committee to
provide for an adjustment pursuant to this paragraph 3(b) prior to the effective
date of any Company action referred to in this paragraph 3(b) shall be
conclusive evidence that no adjustment is required in consequence of such
action.
(c)
If the Company is merged into or consolidated with any other
corporation and the Company is not the surviving corporation, or if the Company
sells all or substantially all of the Company’s assets to any other corporation,
then either
(i) the
Company shall cause provisions to be made for the continuance of the Option
after such event or for the substitution for the Option of an option covering
the number and class of securities which the Optionee would have been entitled
to receive in such merger, consolidation or if the Optionee had been the holder
of record of a number of shares of Common Stock equal to the number of Shares
covered by the unexercised portion of the Option immediately prior to such
merger, consolidation or sale or
(ii) the
Company shall give to Optionee written notice of the Company’s election not to
cause such provision to be made and the Option shall become exercisable in full
(or, at the election of the Optionee, in part) at any time during a period of
thirty days, to be designated by the Company, ending not more than ten days
prior to the effective date of the merger, consolidation or sale, in which case
the Option shall not be exercisable to any extent after the expiration of such
thirty-day period.
Notwithstanding
the provisions of this paragraph 3(c), in no event shall the Option be
exercisable after the Termination Date.
4. Investment Representation and Legend
of Certificates. Optionee acknowledges that, for any period in
which a registration statement with respect to the Option and/or Shares under
the Securities Act of 1933, as amended (the “Securities Act”), is not effective,
Optionee shall hold the Option and will purchase and/or own the Shares for
investment purposes only and not for resale or distribution. The
Company shall have the right to place upon the face and/or reverse side of any
stock certificate or certificates evidencing the Shares such legend as the
Committee may prescribe for the purpose of preventing disposition of such Shares
in violation of the Securities Act.
5. Non
Transferability. The Option shall not be transferable by
Optionee, other than by (a) will, the laws of descent or distribution or (b)
pursuant to a proceeding under title 11 of the U.S. Bankruptcy Code or similar
insolvency proceeding, and is exercisable during the lifetime of Optionee only
by Optionee, except as otherwise specifically provided in this Agreement or the
Plan. The terms of this Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of
Optionee.
6. Certain Rights Not Conferred by
Option. Optionee shall not, by virtue of holding the Option,
be entitled to any rights of a stockholder in the Company.
7. Expenses. The
Company shall pay all original issue and transfer taxes with respect to the
issuance of the Shares pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith.
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8.
Exercise of Options.
(a) The
Option shall become exercisable on the dates and in the amounts as
follows:
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Date
First Exercisable
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Number
of Shares
(Cumulative)
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|
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April
17, 2009
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3,000,000
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(b) The
Option shall be exercisable, in whole or part and from time to time, but subject
to the exercise schedule set forth in paragraph 8(a) of this Agreement, by
written notice of such exercise, delivered to the President or Secretary of the
Company, at the Company’s principal office by personal delivery, against written
receipt therefor, or by pre-paid, certified or registered mail, return receipt
requested. Such notice shall specify the number of Shares for which
the Option is being exercised (which number, if less than all of the Shares then
subject to exercise, shall be 100 or an integral multiple thereof) and shall be
accompanied by
(i) payment
of the full exercise price for the Shares for which the Option is being
exercised and
(ii) this
Agreement.
(c) The
form of payment of the Exercise Price for Shares purchased pursuant to each
exercise of the Option shall be paid in full at the time of each purchase in one
or a combination of the following methods:
(i)
cash;
(ii) check
(subject to collection);
(iii) in
the discretion of the Committee, surrender to the Company of other shares of
Common Stock owned by the Optionee which
(A) have
a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which the Option is being exercised and
(B) have
been owned of record by Optionee for at least six months;
(iv) in
the discretion of the Committee, commencing upon the date on which all of the
Shares subject to the Option are exercisable in accordance with the exercise
schedule set forth in paragraph 8(a) of this Agreement, by “cashless exercise,”
by means of exercising the Option in full and receiving such number of Shares
having a Fair Market Value on the date of such cashless exercise equal to the
difference between
(A) the
Fair Market Value of the Shares issuable upon exercise of the Option in full on
the date of such cashless exercise and
(B) the
exercise price of the Option multiplied by the number of Shares issuable upon
exercise of the Option in full; or
(v) in
the discretion of the Committee, but, in all cases, subject to applicable law,
by
(A) assignment
to the Company of the net proceeds (to the extent necessary to pay such exercise
price) to be received from a registered broker upon the sale of the Shares or
assignment of the net proceeds (to the extent necessary to pay such exercise
price) of a loan from such broker in such amount or
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(B) such
other consideration and method of payment for the issuance of stock to the
extent permitted under applicable law and satisfying the requirements of Rule
16b-3 promulgated pursuant to the Exchange Act.
(d) No
Shares shall be delivered upon exercise of the Option until all laws, rules and
regulations which the Committee may deem applicable have been complied
with. If a registration statement under the Securities Act is not
then in effect with respect to the Shares issuable upon such exercise, the
Company may require as a condition precedent that Optionee, upon exercising the
Option, deliver to the Company a written representation and undertaking,
satisfactory in form and substance to the Committee, that, among other things,
Optionee is acquiring the Shares for Optionee’s own account for investment
purposes only and not with a view to the distribution thereof.
(e) Optionee
shall not be considered a record holder of the Shares so purchased for any
purpose until the date on which Optionee is actually recorded as the holder of
such Shares in the records of the Company.
(f)
In the event of Optionee’s death, disability or termination of
employment, the exercisability of the Option shall be governed by the provisions
of section 5.7 of the Plan, unless such provisions are waived by the Committee,
in the Committee’s sole discretion.
9. Covenant Not to Compete or Otherwise
Injure the Company; Work Product. The acceptance by Optionee
of this Agreement and the Option shall constitute the acceptance of and
agreement to all of the terms and conditions contained in this Agreement and in
the Plan, and shall further constitute a covenant and agreement on the part of
Optionee to the effect that, without any additional compensation:
(a) Optionee
shall, so long as Optionee is employed by the Company and for a period of twelve
months after the termination of Optionee’s employment with the Company, Optionee
will not engage in any “competitive activities,” which “competitive activities”
shall include:
(i)
without the written permission of the Company, hiring, offering to hire,
enticing away or in any other manner persuading or attempting to persuade any
officer, employee, contractor, licensor or agent of or supplier to the Company
to discontinue, limit or reduce such person’s relationship with the
Company;
(ii) directly
or indirectly soliciting, diverting, taking away or attempting to solicit,
divert, or take away any “business” of the Company (including actual or proposed
contracts or arrangements for products or services of the Company and any
reasonable extension or continuation of such business of the Company as
constituted at the time of the termination of Optionee’s employment) of which
Optionee has any knowledge during the term of Optionee’s
employment;
(b) Optionee
shall not make or permit to be made, except pursuant to Optionee’s duties and
for the sole use and account of the Company or its nominees, any copies,
abstracts or summaries of any Company reports, papers, documents or programs,
whether made by Optionee or by others, and Optionee agrees that all of such
reports, papers, documents and programs are the sole property of the
Company;
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(c) Optionee
cedes and grants and agrees to cede and grant to the Company, all rights to
possession, copying, and title in and to, any Company reports, papers, documents
or programs, or copies, abstracts or summaries thereof, in any form, coming into
possession of Optionee during and because of Optionee’s employment by the
Company, whether made or prepared by Optionee or by others;
(d) Optionee
shall keep confidential and not disclose to others, except as required by
Optionee’s employment or by law, any matter or thing ascertained by Optionee
though Optionee’s association with the Company, not otherwise publicly known,
the disclosure of which might possibly be contrary to the best interests of any
person, firm or corporation doing business with the Company, or of the Company;
and
(e) If
any product, invention, discovery, patent, patented item, formula, improvement
or process relating to the business of the Company (the “Work Product”) is
created, conceived, developed or discovered by Optionee, either solely or
jointly with others, during the period of Optionee’s employment by the Company,
Optionee shall forthwith disclose the same to the Company and does hereby assign
to the Company any and all such Work Product and all of Optionee’s rights
thereto. At any time, whether during the period of said employment or
thereafter, upon request by the Company, Optionee will
(i)
execute and deliver to the Company an instrument assigning to the
Company Optionee’s entire right, title and interest in and to any or all such
Work Product, and applications for letters patent therefor, or reissues
thereof;
(ii) execute
and deliver application papers for letters patent in any country for any and all
such Work Product, as may be required by the Company;
(iii) execute
and similarly deliver any and all other papers and do such other acts as may in
the opinion of the Company be desirable to more effectively convey to the
Company the rights intended hereby to be conveyed; and
(iv) aid
and assist the Company in the prosecution or defense of any claim or litigation
involving any and all of such Work Product;
provided, however, that the
foregoing services which Optionee agrees to render shall be rendered at no
expense to Optionee.
10. Continued
Employment. Nothing herein shall be deemed to create any
employment or consultancy or guaranty of continued employment or consultancy or
limit in any way the Company’s right to terminate Optionee’s employment or
consultancy at any time.
11. Early
Disposition of Stock.
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By
accepting this Agreement and the Option, Optionee acknowledges and confirms
that, if Optionee disposes of any Shares received under the Option within two
years after the Date of Grant or within one year after such Shares were
transferred to Optionee, Optionee may be treated for federal and state income
tax purposes as having received ordinary income at the time of such disposition
as determined in accordance with the Code and applicable state
law. Optionee hereby agrees to notify the Company in writing within
thirty days after the date of any such disposition. Optionee
authorizes the Company to withhold tax from Optionee’s current compensation with
respect to any income recognized as a result of any such
disposition.
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By:
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/s/ Xxxxx X. Xxxxx
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Xxxxx
X. Xxxxx
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Chief
Financial Officer
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OPTIONEE
ACKNOWLEDGEMENT
OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE EXERCISABILITY OF THE SHARES SUBJECT TO THIS
AGREEMENT AND THE OPTION IS EARNED ONLY BY CONTINUING EMPLOYMENT OR CONSULTANCY
AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
THE OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND CONFIRMS THAT NOTHING IN THIS AGREEMENT, NOR IN THE PLAN WHICH
IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH OPTIONEE’S OR THE COMPANY’S RIGHT, SUBJECT TO
OPTIONEE’S AND THE COMPANY’S RIGHTS UNDER OTHER AGREEMENTS, IF ANY, WITH THE
COMPANY, TO TERMINATE EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.
Optionee
acknowledges receipt of a copy of the Plan and certain information related to
this Plan and Company and represents that Optionee is familiar with the terms
and provisions of the Plan, and hereby accepts the Option subject to all of the
terms and provisions of the Plan. Optionee has reviewed the Plan and
this Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement and fully understands all of the terms
and provisions of the Option and this Agreement. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions rising under the
Plan. Optionee further agrees to notify the Company upon any change
in the residence address indicated below.
Accepted
and agreed as of the Date
of Grant
as first set forth above:
/s/ Xxxxxx X.
Xxxxxxx
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Name:
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Xxxxxx
X. Xxxxxxx
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Address:
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00
Xxxxxxxx Xxxx
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Xxxxxxx,
XX 00000
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