OPTION AGREEMENT
This Option Agreement ("Agreement") is made this August 13th of 2003 by
and between Composite Technology Corporation ("the Company") and Xxxxxx X
Xxxxxxxx, ("Xxxxxxxx"), of 4036 Rivoli, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, XXX,
and replaces a previous option agreement made in June 11th, 2001 by Transmission
Technology Corporation ("TTC"), a Nevada corporation.
WHEREAS, under that certain employment understanding in June, 2001,
between TTC and Wilcoxon, wherein TTC agreed to provide Wilcoxon with 40,000
options of TTC common stock; and
WHEREAS, under the November 3, 2001 Reorganization Plan Agreement
involving the reverse acquisition by TTC of CTC (formerly ElDorado Financial
Group, Inc., a Nevada corporation) the common shares TTC were all convertible to
common shares of CTC, which would equate to 635,216 shares of CTC common stock
under the Company share option plan ("Option Plan") to the benefit of Wilcoxon;
and
WHEREAS, CTC has agreed to provide Wilcoxon with options to acquire
Company shares under its share option plan and in satisfaction of its
obligations under the Option Plan, the Company has granted to Wilcoxon an option
to purchase six hundred and thirty-five thousand and two hundred and sixteen
(635,216) shares of the Company's common stock, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Option
The Company grants to Wilcoxon the right to purchase ("Option") an
aggregate of six hundred and thirty-five thousand and two hundred and sixteen
(635,216) shares of the Company's common stock ("Shares") at the price set forth
in Section 4 below. The vested portion of the Option may be exercised at any
time, whether in a single transaction or in multiple transactions, and in the
amounts and at the times determined by Wilcoxon.
2. Vesting
The original agreement with TTC called for the vesting over 5 years
commencing with the first installment on the date of the agreement of June 11,
2001 with the next fifth being due the yearly anniversary and so forth. In the
last shareholders meeting it was agreed that these options were granted and
vested in total as of that date in February 2003, such that they are all fully
vested under the Company's Stock Plan at this time.
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Composite Technology Corporation - Option Agreement - August 13, 2003
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The vested portion of the Option shall be nonforfitable, and shall not
be affected by the termination of employment, the death or disability of
Wilcoxon, or for any other reason. Notwithstanding the foregoing, if the entire
portion of this Option has not been exercised as of December 31, 2011, the
unexercised portion shall lapse and shall be of no force or effect.
3. Effect of Termination of Employment
If Wilcoxon voluntarily terminates employment without cause, or if the
Company terminates employment due to Wilcoxon's breach, then as of the effective
date of such termination the unvested portion of the Option shall terminate and
shall be of no force or effect. This paragraph shall not apply to any voluntary
termination by Wilcoxon as a result of a Change in Control specified in Section
7 below.
If the Company voluntarily terminates employment without cause, or if
Wilcoxon terminates employment due to the Company's breach, or if employment is
terminated due to death or disability of Wilcoxon, then as of the effective date
of such termination the unvested portion of the Option shall be immediately and
fully vested.
The termination of employment shall not affect Wilcoxon's right to
exercise the vested portion of the Option at any time prior to December 31,
2011.
4. Purchase Price
The purchase price for each Share subject to the Option (including any
additional Shares granted to Wilcoxon under Section 8 below) shall be $0.35.
5. Manner of Exercise
If at any time Wilcoxon elects to exercise all or any part of the
vested portion of the Option, it shall so notify Company in writing. Such
written notice shall specify the number of Shares to be purchased, and shall be
accompanied by cash or a check equal to the full purchase price for all Shares
purchased. "Full purchase price" means the per-share price in Section 4
multiplied by the number of Shares purchased.
6. Issuance of Certificates
As soon as practicable after the exercise of any portion of the Option,
the Company shall deliver to Wilcoxon a certificate evidencing the Shares so
purchased. Upon such delivery Wilcoxon shall have all rights, powers, and
interests of a shareholder of the Company with respect to the Shares so
acquired.
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7. Change in Control
Notwithstanding Section 2 above, in the event of a Change in Control of
the Company the unvested portion of the Option shall be fully and immediately
vested as of the earlier of (i) the date any proposed Change in Control has been
approved by the Company's board of directors, whether or not all of the terms of
such transaction have been determined, (ii) the date Change in Control has
actually occurred, or (iii) the occurrence of an event specified in subsection
(c) below.
As used herein, "Change in Control" shall mean any of the following:
(a) The sale or transfer of more than fifty percent (50%)
of the assets of the Company, whether in a single
transaction or a series of transactions during a 12
month period.
(b) The sale or transfer to any person or Common Group,
or acquisition by any person or Common Group, of
twenty percent (20%) or more of the outstanding
common stock of the Company, whether in a single
transaction or a series of transactions. "Common
Group" means five or fewer persons related in some
manner. This subsection shall not apply to common
stock acquired by C. Xxxxxxx Xxxxxxxx or Xxxxxx
Xxxxxxxx.
(c) The death, disability, retirement, or other
termination of employment of Xxxxxx Xxxxxxxx.
8. Nonalienation.
Neither of the Option nor any rights thereunder may be transferred,
assigned, pledged or hypothocated in any way, whether by operation of law or
otherwise, and shall not be subject to execution, attachment or similar process.
9. Entire Agreement
This Agreement represents the entire agreement of the parties with
respect to the subject matter hereof, and supercedes any prior or
contemporaneous written or oral agreement with respect thereto.
10. Choice of Law
This Agreement shall be governed by the laws of the State of
California.
11. Amendment
This Agreement may be amended only by a writing executed by the parties
hereto.
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12. Attorney's Fees
In the event either party incurs legal expenses to enforce or interpret
any provision of this Agreement, the prevailing party shall be entitled to
recover its legal expenses, including, without limitation, reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party shall be entitled.
In WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
COMPOSITE TECHNOLOGY CORPORATION
By:
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Xxxxxx X Xxxxxxxx, Chairman and CEO
By:
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C. Xxxxxxx Xxxxxxxxx, Director and President
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