EXHIBIT 10.11
WINDSWEPT ENVIRONMENTAL GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Windswept Environmental Group, Inc., a Delaware corporation
(the "Company"), pursuant to its 2001 Equity Incentive Plan (the "Plan"), has
granted to XXXXXXX XXXXXX (the "Optionee") a stock option (the "Option") to
purchase a total of 100,000 shares (each a "Share," and collectively, the
"Shares") of the common stock, par value $.0001 per Share (the "Common Stock")
of the Company, at an exercise price of $0.035 per Share (the "Exercise Price"),
on the terms and conditions set forth herein and, in all respects, subject to
the terms and conditions of the Plan. The date of the grant of the Option is
DECEMBER 6, 2004 (the "Date of Grant"). The Option is not intended to qualify as
an Incentive Stock Option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings herein.
1. DURATION.
Subject to earlier termination as provided herein or under the
Plan, the Option shall expire at the close of business on DECEMBER 6, 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, a written notice of exercise substantially in the form described in
paragraph 8 hereof.
3. ANTI-DILUTION PROVISIONS.
(a) In the event that the number of outstanding shares of Common Stock
is changed by a stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then the Exercise Prices
of, and number of Shares subject to, outstanding Options under the Plan, will be
proportionately adjusted, subject to any required action by the Board or the
stockholders of the Company and compliance with applicable securities laws;
provided, however, that, upon occurrence of such an event, fractions of a Share
will not be issued upon exercise of an Option but will, upon such exercise,
either be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share on the effective date of such an event, or be rounded up to
the nearest whole Share, as determined by the Administrator.
(b) Upon any Change in Control of the Company, each Option that is
outstanding on the date of such Change in Control shall be exercisable in full
immediately. For this purpose, a Change in Control shall be deemed to occur when
and only when any of the following events
first occurs: (i) any person who is not currently such becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding voting securities; or (ii) any merger (other than a merger where the
Company is the survivor and there is no accompanying Change in Control under
clause (a) of Section 15.2 of the Plan), consolidation, liquidation or
dissolution of the Company, or the sale of all or substantially all of the
assets of the Company.
4. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES.
With respect to the Option and/or Shares issued upon exercise
of the Option, Optionee acknowledges and agrees that, for any period in which a
registration statement 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 solely for investment 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 Administrator 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 sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of by Optionee, except by will or the laws of
descent and distribution, or pursuant to a domestic relations order, and shall
be exercisable during the lifetime of Optionee only by Optionee or such person
receiving such Option pursuant to the laws of descent and distribution or
domestic relations order. 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. 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.
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.
8. EXERCISE OF OPTIONS.
(a) The Option is exercisable in full immediately upon the date of
grant.
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(b) The Option shall be exercisable, in whole or in part and from time
to time, only by delivery to the Company of an irrevocable written notice (a)
identifying the Option being exercised, (b) stating the number of Shares being
purchased, (c) providing any other matters required by this Option Agreement
with respect to such Option, and (d) containing such representations and
agreements regarding Optionee's investment intent and access to information and
other matters, if any, as may be required or desirable by the Company to comply
with applicable securities laws. Such exercise notice shall be accompanied by
payment in full of the Exercise Price for the number of Shares being purchased
in accordance with Article 10 of the Plan and this Option Agreement.
(c) Payment for Shares purchased pursuant to this Plan may be made in
cash (by check) or, where expressly approved for the Optionee by the
Administrator and where permitted by law:
(i) by cancellation of indebtedness of the Company to the
Optionee;
(ii) by surrender of Shares that either (i) have been owned by
the Optionee for more than six months and have been paid for
within the meaning of Rule 144 promulgated under the
Securities Act (and, if such shares were purchased from the
Company by use of a promissory note, such note has been fully
paid with respect to such shares) or (ii) were obtained by
Optionee in the public market;
(iii) by tender of a full recourse promissory note having such
terms as may be approved by the Administrator and bearing
interest at a rate sufficient to avoid imputation of income
under Sections 483 and 1274 of the Code; provided, however,
that Optionees who are not employees or directors of the
Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by
collateral other than the Shares;
(iv) by waiver of compensation due or accrued to the Optionee
for services rendered;
(v) provided that a public market for the Company's stock
exists, (i) through a "same day sale" commitment from the
Optionee and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer") whereby
the Optionee irrevocably elects to exercise the Option and to
sell a portion of the Shares so purchased to pay for the
Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise
Price directly to the Company, or (ii) through a "margin"
commitment from the Optionee and an NASD Dealer whereby the
Optionee irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
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(vi) by any combination of the foregoing.
(d) The Company, in its sole discretion, may assist the Optionee in
paying for Shares purchased under the Plan by authorizing a guarantee by the
Company of a third-party loan to the Participant.
(e) No Shares shall be delivered upon exercise of the Option until all
laws, rules and regulations which the Administrator may deem applicable have
been complied with.
(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 paragraph 5.7 of the Plan, unless such provisions are waived by the
Administrator, in its sole discretion.
9. CONTINUED EMPLOYMENT.
Nothing herein shall confer or be deemed to confer on the
Optionee any right to continue in the employ of, or to continue any other
relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company or limit in any way the right of the Company or any Parent, Subsidiary
or Affiliate of the Company to terminate Optionee's employment or other
relationship at any time, with or without cause.
By: /s/ Xxxxxxx X'Xxxxxx
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Name:
Title: CEO
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OPTIONEE ACKNOWLEDGES AND AGREES 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 BY THE COMPANY,
NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and
certain information related thereto and represents that Optionee is familiar
with the terms and provisions thereof, and hereby accepts the Option subject to
all of the terms and provisions thereof. 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
Administrator 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 first set forth above:
/s/ Xxxxxxx Xxxxxx
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Name:
Address:
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