STOCK OPTION AGREEMENT FOR THE GRANT OF NON-QUALIFIED STOCK OPTIONS UNDER THE TRULITE, INC. STOCK OPTION PLAN
Exhibit
10.40
FOR
THE GRANT OF
NON-QUALIFIED
STOCK OPTIONS UNDER THE
TRULITE,
INC.
STOCK
OPTION PLAN
THIS
AGREEMENT
is
entered into as of January 4, 2006 by and between Trulite, Inc., a Delaware
corporation (“Trulite” or the “Company”), and Xxxxx Xxxxxx
(“Optionee”).
WHEREAS,
Optionee
is has
been
very helpful to the company. For example, she played a significant role in
preparing documents for a capital raise with the State of Texas. The Company
considers it desirable and in its best interest that Optionee be given an
inducement to acquire a proprietary interest in the Company and an added
incentive to advance the interests of the Company by possessing an option to
purchase shares of the common stock, $.0001 par value per share (the “Common
Stock”) of the Company in accordance with the Trulite, Inc. Stock Option Plan
(the “Plan”) which was adopted by the Board of Directors on April 11,
2005.
NOW,
THEREFORE,
in
consideration of the premises, it is agreed as follows:
1.
DEFINITIONS
For
purposes of this Agreement, any capitalized terms used herein and not defined
herein shall have the meaning provided in the Plan and the following terms
shall
have the definitions indicated:
(a)
Date
of Grant - the date of this Agreement, January 4, 2006.
(b)
Exercise Date - date that the Option or any portion thereof, as the context
requires, is exercised.
2.
GRANT OF OPTION
Subject
to the provisions of the Plan, the Company hereby grants to Optionee the right,
privilege and option to purchase (the “Option”) 5,000 shares of Common Stock
(the “Option Shares”) at a price of $0.88 per share (the “Xxxxx Xxxxx”), which
has been determined by the Board of Directors to be equal to the Fair Market
Value of a share of Common Stock on the Date of Grant. The Option shall be
exercisable in the amounts and at the times specified in Section 3 below. The
number of Option Shares and the Xxxxx Xxxxx have been adjusted to reflect a
five-for-one stock split of the Trulite common stock to be effective in April
2005. The Option is a non-qualified stock option and shall not be treated as
an
incentive stock option.
3.
VESTING AND EXERCISE OF OPTIONS
| 3.1 |
The
Option shall vest as provided below:
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With
respect to 18.5% of the Option Shares
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One
year after the Date of Grant
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With
respect to an additional 22.5% of the Option Shares
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Two
years after the Date of Grant
|
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With
respect to an additional 26.5% of the Option Shares
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Three
years after the Date of Grant
|
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With
respect to an additional 32.5% of the Option Shares
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Four
years after the Date of Grant
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| 3.2 |
The
Option may not be exercised later than seven years after the Date
of
Grant.
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| 3.3 |
(a)
If
some or all of the shareholders of Trulite on the Date of Grant (the
“Current Shareholders”) enter into a definitive agreement to sell to a
third party (an “Acquiring Party”) some or all of the shares of Common
Stock held by the Current Shareholders and the proposed sale will
result
in the Current Shareholders having voting power with respect to less
then
50% of the voting securities entitled to vote in the election of
directors
of Trulite, the Board may require the Optionee to exercise the vested
portion of the Option and sell the Option Shares to the Acquiring
Party or
to the Current Shareholders, on the same terms and conditions, including
prices, as the Acquiring Party is acquiring the shares from the Current
Shareholders. Following the sale to the Acquiring Party, the unvested
portion of the Option shall continue to be subject to the vesting
terms
provided herein.
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(b)
In
the
event of (1)
a sale
of all or substantially all of the assets of the Company or (2)
a
merger, consolidation or reorganization involving Trulite, following which
the
Current Shareholders will have voting power with respect to less than 50% of
the
voting securities entitled to vote generally in the election of directors of
the
surviving entity, the Board can require that all vested Options be exercised
at
the time of effectiveness of the asset sale, merger, consolidation or
reorganization and that, if not exercised, shall be forfeited. All Options
not
exercised at the time of the asset sale, merger, consolidation or reorganization
and not required to be forfeited, shall be assumed by any acquiring or surviving
entity on the same terms and shall become equivalent options to acquire
securities of such acquiring or surviving entity.
(c) In
the
event of a “Change of Control” (that is, (i) a sale of all or substantially all
of the assets or (ii) a merger, consolidation or reorganization involving
Trulite, all options held by the Optionee on record as of January 4, 2006 will
be subject to accelerated vesting. Board approval will not be required under
these terms and conditions. It should be noted that these terms and conditions
do not include the purchase of Trulite by Synexus or vice versa nor does it
include a public offering or reverse merger of Trulite/Synexus into a public
entity.
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3.4
|
Notwithstanding
the foregoing, the Board may at any time in its sole discretion declare
any outstanding Options to be fully vested and immediately exercisable
in
full or in part.
|
4. METHOD
OF EXERCISE OF OPTION
Optionee
may exercise all or a portion of the Option by delivering to the Board a signed
written notice of her intention to exercise the Option, specifying therein
the
number of shares to be purchased. Upon receiving such notice, and after the
Board has received full payment of the Xxxxx Xxxxx for the Option Shares being
acquired, the Board shall direct the appropriate officer of the Company to
transfer title to the Option Shares purchased to Optionee on the Company’s stock
records and to issue to Optionee a stock certificate for the number of Option
Shares being acquired. Optionee shall not have any rights as a shareholder
until
the stock certificate is issued to her.
The
Option may be exercised by the payment of the Xxxxx Xxxxx in cash or by
check.
5.
COMPLIANCE
WITH APPLICABLE LAW
No
shares
may be issued upon exercise of the Option unless such issuance is in compliance
with the Delaware General Corporation Law, as in effect on the date of such
issuance. It is the intention of the Company to effect full compliance with
all
securities and other applicable laws with respect to the sale of Option Shares
pursuant to the exercise of Options hereunder and subsequent resales by the
Optionee. The Company shall not be required to sell and deliver Option Shares
hereunder upon exercise of these Options in whole or part until the Optionee
shall have made such representations and agreed to the legending of stock
certificates in a fashion as may reasonably be required by the Company's counsel
to effect compliance with all applicable securities or other laws.
6. RESTRICTION
ON TRANSFER OF OPTION SHARES
Unless
the Common Stock is publicly traded, there will be no market for the Option
Shares and the Option Shares will be subject to restrictions on transfer imposed
by law, the Plan and this Agreement, as well as an Investors Rights Agreement
and a Right of First Refusal and Co-Sale Agreement to which Optionee will be
obligated to become a party upon exercise of the Option. By signing this
Agreement, Optionee represents that any purchase of Option Shares upon exercise
of an Option, prior to the Common Stock becoming publicly traded, will be for
investment purposes without an intention to resell the Option Shares for a
substantial period of time. No transfer of Option Shares will be recognized
by
the Company, unless in the opinion of counsel to the Company such transfer
will
not result in a violation of applicable securities laws.
7.
BINDING EFFECT
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators and
successors.
8.
INCONSISTENT PROVISIONS
The
Option granted hereby is subject to the provisions of the Plan as in effect
on
the date hereof. If any provision of this Agreement conflicts with such a
provision of the Plan, the Plan provision shall control.
9.
SEVERABILITY
If
a
court of competent jurisdiction determines that any provision of this Agreement
is invalid or unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision
of this Agreement, and all other provisions shall remain in full force and
effect.
IN
WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
on
the day and year first above written.
| TRULITE, INC. | ||
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| By: |  |
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President and CEO |
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Xx. Xxxxx Xxxxxx |
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