EXHIBIT 10.22
Non-Qualified Option Agreement
Material Technologies, Inc.
NON-STATUTORY STOCK OPTION AGREEMENT
MATERIAL TECHNOLOGIES, INC.
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This Non-Statutory Stock Option Agreement is hereby entered into as of the
15th day of October, 2002, by and between Material Technologies, Inc., a
Delaware corporation, (the "Corporation") and Xxxxxxx Xxxxxxxxx, the optionee
("Optionee") that is hereby being granted the right to acquire the Corporation's
common stock in accordance with the terms stated below (the "Agreement").
WHEREAS, the Optionee has entered into a consulting agreement with the
Corporation;
WHEREAS, the Corporation's Board of Directors (the "Board") determined that
the Corporation's in-terests will be advanced by providing an incentive to the
Optionee to acquire a proprietary interest in the Corporation and, as a
stockholder, to share in its success, with added incentive to work effectively
for and in the Corporation's interest.
NOW THEREFORE, in consideration of the mutual promises set forth in this
Agreement and for other good and valuable consideration, the parties hereby
agree as follows:
1. OPTION GRANT - The Corporation hereby grants to the Opionee, the right and
option (the "Option") to purchase shares of authorized but unissued shares of
common stoc, par value $.001 per share of the Corporation ("Option Shares") as
follows: 1,300,000 options at a price of $.03, 1,300,000 options at a price of
$.04, 1,300,000 options at a price of $.06, 1,300,000 options at a price of
$.08, and 1,300,000 options at a price of $.10 pursuant to the Material
Technologies, Inc.2002 Stock Issuance / Stock Option Plan registered under Form
S-8 filed on February 6, 2002 and pursuant to IRC Regulation 83(c)(1).
2. WHEN EXERCISABLE - The Option may be exercised beginning on October 15,
2002 (the "Option Date") through October 15, 2003, after which date the Option
shall expire ("Expiration Date"). The Option shall be exercisable only as
follows:
a. To the extent the Option is not exercised by the Expiration Date, it
shall be no longer valid or exercisable.
(i) The Option granted under this Agreement, to the extent that it has
not been exercised, shall terminate at the following times: In the
event of Optionee's death, the Option shall terminate six (6) months
after the date of death. If Optionee's affiliation with the
Corporation ends because Optionee becomes disabled, the Option shall
terminate six (6) months after the date on which Optionee's
affiliation ends. If Optionee voluntarily resigns from his position,
the Option shall terminate one (1) month after the date of
resignation. If Optionee's affiliation with the Corporation is
terminated by the Corporation for reasons other than cause, the Option
shall terminate one (1) month after the date of said termination. If
Optionee's affiliation with the Corporation is terminated by the
Corporation for cause, the Option shall terminate one (1) month after
the date of said termination.
Non-Qualified Option Agreement
Material Technologies, Inc.
3. CHANGES IN THE CORPORATION'S CAPITAL STRUCTURE - The existence of
outstanding Options shall not affect in any way the right or power of the
Corporation or its stockholders to make or authorize any or all adjustments,
recapitalizations, or other changes in the Corporation's capital structure or
its business, or any merger or consolidation of the Corporation or any issuance
of common stock, subscription rights, bonds, debentures, preferred stock ahead
of or affecting the rights of the common stock, or the dissolu-tion or
liquidation of the Corporation, or any sale or transfer of all or any part of
the Corporation's assets or business, or any other corporate act or proceeding.
If, however, the outstanding shares of the Corpo-ration's common stock shall at
any time be changed or exchanged by declaring a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of shares
subject to this Option and the Option price shall be appropriately and equitably
adjusted to maintain the proportionate number of shares without changing the
aggregate option price.
4. HOW THE OPTION IS EXERCISABLE - The Optionee shall exercise the Option by
delivering written notice to the Corporation on a form substantially similar to
"Exhibit A" to this Agreement, specifying the number of shares to be purchased
and accompanied by a check in full payment of the option price for the Option
Shares. Until the Optionee properly exercises this Option and deliveries the
Option Price, Optionee shall have no rights in the Option Shares.
5. OPTION TRANSFER - Except as otherwise provided in this Agreement, this
Option and the rights and privileges conferred hereby shall not be transferred,
assigned, pledged, or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment, or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate, or
otherwise dispose of this Option, or of any right or privilege conferred
hereby, contrary to the provisions of this Agreement, or upon any attempted
sale under any execution, attachment, or similar process upon the rights
and privileges conferred hereby, this Option and the rights and
privileges conferred hereby shall immediately become null and void.
6. NOTICE OF DISPOSITION OF OPTION SHARES - Optionee agrees that if, within
one year of acquiring Option Shares by exercising this Option, the Optionee
disposes of any Option Shares including by sale, exchange, gift, or transfer of
beneficial ownership, the Optionee shall provide the Corporation with no less
than ten (10) days advanced written notice of the disposition, transfer or sale
of the Option Shares.
7. GOVERNING LAW - This Agreement shall be construed and its performance
enforced in accordance with the laws of the State of California, excluding its
choice of law provisions.
8. DISPUTE RESOLUTION - The parties first agree to submit any disputes arising
under or in relation to this Agreement to mediation with a mediator approved by
the parties to the dispute. If the parties resolve their disputes through
mediation, they shall share the fees of the mediator evenly but pay their own
at-torneys' fees and other expenses related to mediation. If mediation fails to
resolve all disputes within thirty (30) days after submission to the mediator,
then either party may thereafter submit their dispute to compulsory arbitration
to the American Arbitration Association ("AAA") under its Commercial Rules of
Arbitration. The parties agree that mediation is a pre-condition to submitting
a claim for arbitration in accordance with this section. Any and all
arbitration hearings or proceedings initiated by either party to this Agreement
shall take place in the City of Los Angeles, California, and the prevailing
party in any such arbitration proceeding relating to the transactions
contemplated by this Agreement shall be entitled to recover all of their costs
and expenses of the arbitration, including reasonable attorneys' fees and the
attorneys fees and expenses incurred in connection with mediation that failed to
resolve the dispute.
Non-Qualified Option Agreement
Material Technologies, Inc.
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9. LEGALITY OF INITIAL ISSUANCE. No Option Shares shall be issued upon the
exercise of this Option unless and until the Corporation has determined that
all applicable provisions of state and federal securities laws have been
satisfied. In the event that the Option Shares have not been registered under
the Securities Act of 1933, as amended, at the time this Option is exercised,
the Optionee shall, if required by the Corporation, concurrently with the
exercise of all or any portion of this Option, deliver to the Corporation his or
her "investment representation statement" in a form satisfactory to the
Corporation.
10. SEVERABILITY - If a court of competent jurisdiction or arbitrator finds
that one or more provisions of this Agreement is or are illegal or
unenforceable, the remaining provisions of this Agreement shall re-main in full
force and effect as if such provision or provisions never existed.
11. WAIVER - No party's right to require performance of another party's
obligations under this Agree-ment shall be affected by any previous delay in
enforcing such right, express waiver of prior similar right to require
performance, or course of dealing. Any and all amendments to this Agreement
shall be in writing and signed by the party against whom a right or obligation
is sought to be enforced.
12. HEADINGS. Headings contained herein are for convenience only and shall not
be deemed a part of this Agreement for any purpose.
13. INTEGRATION CLAUSE. This Agreement constitutes the entire understanding
between the Corporation and the Optionee and supersedes all prior proposals and
agreements, oral or written, and all prior or contempo-raneous com-munications
between the parties relating to the subject of this Agreement.
14. NOTICES. Notices under this Agreement shall be sufficient only if sent (a)
by overnight courier, or (b) by facsimile or other electronic means and by U. S.
Mail, or (c) personally delivered to the party entitled to receive such notice.
Notices shall be addressed as follows:
Non-Qualified Option Agreement
Material Technologies, Inc.
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To Material Technologies, Inc.: To Xxxxxxx Xxxxxxxxx:
Xx. Xxxxxx X. Xxxxxxxxx 75 Lincoln Highway
Material Technologies, Inc. Xxxxxx, XX 00000
Suite 707
00000 Xxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Fax: 310/ 000-0000 Tel.: (000) 000-0000
Telephone: 310/000-0000 Fax: (000) 000-0000
Any party may change the above address by giving written notice of the new
address as set forth above.
15. MISCELLANEOUS PROVISIONS.
15.1 WITHHOLDING TAXES. In the event that the Corporation determines that
it is required to withhold federal, state, or local tax as a result of the
exercise of this Option, Optionee, as a condition to the exercise of this
Option, shall make arrangements satisfactory to the Corporation to enable it to
satisfy all withholding requirements.
15.2 NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall be construed as
giving Optionee the right to be retained as an employee or non-employed
consultant of the Corporation or be construed as any offer of employment or any
right thereto.
15.3 TAX ELECTION. Under Section 83 of the Internal Revenue Code of 1986
(the "Code"), as a general rule the excess, if any, of the fair market value of
the Option Shares on the date the risk of forfeiture lapses ("Vesting"),
over the amount paid for the Option Shares, is taxed as ordinary income
to the optionee. Optionee acknowledges that to the extent the Option Shares
have not Vested, Optionee may elect to be taxed at the time the Option Shares
are purchased rather than when the Option Shares Vest by filing with the
Internal Revenue Service an election under Section 83(b) of the Code within
thirty (30) days of the date of purchase of the Option Shares. Assuming the
Option price is equal to the fair market value of the Shares at the time of
purchase, if the Option Shares have not Vested, the election may be desirable
in order to avoid potential future adverse tax consequences. Optionee
acknowledges that Optionee's failure to make this filing in a timely manner
may result in Optionee's recognition of ordinary income as the Option Shares
become Vested, in an amount equal to the excess of the fair market value of the
Shares on the date of Vesting over the Option price. OPTIONEE ACKNOWLEDGES THAT
IT IS THEIR SOLE AND EXCLUSIVE RESPONSIBILITY TO FILE IN A TIMELY MANNER ANY
ELECTION UNDER SECTION 83(b), AND THAT THE CORPORATION SHALL BEAR NO
RESPONSIBILITY WHATSOEVER FOR THAT FILING. Optionee shall promptly deliver to
the Corporation a copy of any tax election relating to the treatment of the
Option Shares under the Code.
16. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
Non-Qualified Option Agreement
Material Technologies, Inc.
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IN WITNESS WHEREOF, the parties execute this Agreement as of the first date
written above.
Date: October ___, 2002 MATERIAL TECHNOLOGIES, INC.
/s/ Xxxxxx X. Xxxxxxxxx
By: __________________________________
Xxxxxx X. Xxxxxxxxx, President
Date: October ___, 2002 /s/ Xxxxxxx Xxxxxxxxx
__________________________________
Xxxxxxx Xxxxxxxxx
Non-Qualified Option Agreement
Material Technologies, Inc.
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EXHIBIT A
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MATERIAL TECHNOLOGIES, INC.
NOTICE OF STOCK OPTION EXERCISE
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OPTIONEE INFORMATION:
Name: ____________________________ Social Security No. _______- ____- ______
Address: _______________________________________________________________________
OPTION INFORMATION:
Date of Grant: ___________________________ Type of Option: Non-qualified
Exercise Price per share: $_________
Total number of shares of the Common Stock of Material Technologies, Inc. (the
"Corporation") covered by Option: _______ Shares.
EXERCISE INFORMATION:
The undersigned, Optionee, hereby irrevocably elects to exercise the purchase
right represented by such Option for, and to purchase hereunder
________ shares of Common Stock of the Corporation, and herewith tenders
payment of $___________ in full payment of the exercise price for such
shares, and requests that the certificate for such shares purchased hereunder be
issued
[you must check one]:
[ ] in my name only; or
[ ] in the names of my spouse and myself as community property; or
[ ] in the names of my spouse and myself as joint tenants with the
right of survivorship.
--------------------------------- ----------------------------------
Optionee's Name My spouse's name (if applicable)
---------------------------------
Address
---------------------------------
City, State and Zip
Dated: __________________________
Signature of Optionee
Non-Qualified Option Agreement
Material Technologies, Inc.
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