Consultant Stock Option Grant Agreement Under The CDKNET.COM, INC. 2004 Stock Option Plan
EXHIBIT
10.1
Under
The
XXXXXX.XXX,
INC. 2004 Stock Option Plan
This
Grant
Agreement (the “Agreement”) is entered into by and between XXXxxx.xxx, Inc., a
Delaware corporation (the “Company”), and the individual (the “Optionee”)
specified on the Notice of Grant of Stock Options attached hereto and
incorporated by reference herein (the “Notice of Grant of Stock Options”),
effective as of June 21, 2005 (the “Grant Date”).
1. Grant
of
Option. The Company hereby grants to the Optionee, pursuant to the
XXXxxx.xxx, Inc. 2004 Stock Option and Restricted Stock Plan (the “Plan”), an
option (the “Option”) to purchase the number of Shares set forth in the Notice
of Grant attached hereto as Exhibit 1, at the exercise price per Share set
forth
in the Notice of Grant (the “Exercise Price”), and subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject
to
Section 15(c) of the Plan (Effect of Amendment or Termination), in the event
of
a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.
(a) This
Option is not intended to qualify
as an Incentive Stock Option as defined in Section 422 of the Code and shall
be
treated as a Nonqualified Stock Option (“NQO”). The Notice of Grant of Stock
Options sets forth the following terms of the Option: (i) the Optionee,
(ii) the number of shares of Stock subject to the Option, (iii) the
Strike Price per share, and (iv) the date as of which the Option shall
expire (the “Expiration Date”), at 5:00 p.m. Eastern Time, unless fully
exercised or earlier terminated. The information provided on the Notice of
Grant
of Stock Options is in all respects subject to the terms of this
Agreement.
2. Terminology.
Unless stated
otherwise in this Agreement, capitalized terms in this Agreement shall have
the
meaning set forth in the Plan. Except where the context otherwise requires,
the
term “Company” shall mean XXXxxx.xxx, Inc., a Delaware corporation.
3. Exercise
of Option.
(a) Right
to Exercise. Except as
otherwise provided in this Agreement, this Option may be exercised as to
its
vested portion at any time and from time to time, in whole or in part, on
or
before the Expiration Date or earlier termination of the Option by executing
the
exercise notice in the form of Exhibit 2. To the extent not exercised, vested
shares shall accumulate and be exercisable, in whole or in part, at any time
after becoming exercisable, but not later than the Expiration Date or other
termination of the Option. In the event of the Optionee’s death, disability, or
other termination of employment, the exercisability is governed by
Section 4 below.
(b) Vesting.
Unless the Option has
earlier terminated, Optionee shall vest in accordance with the vesting schedule
set forth in the Notice of Grant.
(c) Exercise
Procedure. Subject to
the conditions set forth in this Agreement, including without limitation
the
execution of a Stock Restriction Agreement as required by Section 3(e)
hereof, this Option shall be exercised by delivery of written notice of exercise
on any business day to the Corporate Secretary of the Company in such form
as
the Administrator may require from time to time. Such notice shall specify
the
number of shares in respect of
which
the Option is being exercised and shall be accompanied by
full payment of the Strike Price for such shares in accordance with
Section 3(d) of this Agreement. The exercise shall be effective upon
receipt by the Corporate Secretary of the Company of such written notice
accompanied by the required payment. The Option may be exercised only in
multiples of whole vested shares and may not be exercised at any one time
as to
fewer than one hundred (100) shares (or such lesser number of shares as to
which
the Option is then exercisable). No fractional shares shall be issued pursuant
to this Option.
(d) Method
of Payment. Payment of
the Strike Price shall be by any of the following, or a combination thereof,
as
determined by the Administrator in its discretion at the time of exercise:
i. By
delivery of cash, certified or
cashier’s check, or money order;
ii. By
any other method approved by the
Administrator.
Subject
to such
limitations as the Administrator may determine, at any time during which
the
Stock is publicly traded on a national securities exchange or NASDAQ, the
Strike
Price shall be deemed to be paid, in whole or in part, if the Optionee delivers
a properly executed exercise notice, together with irrevocable instructions:
(A)
to a brokerage firm approved by the Company to deliver promptly to the Company
the aggregate amount of sale or loan proceeds to pay the Strike Price and
any
withholding tax obligations that may arise in connection with the exercise,
and
(B) to the Company to deliver the certificates for such purchased
shares
directly to such brokerage firm.
(e) Issuance
of Shares upon
Exercise. Upon due exercise of the Option, in whole or in part, in
accordance with the terms of this Agreement, the Company shall issue to the
Optionee, or such other person exercising the Option, as the case may be,
the
number of shares of Stock so paid for, in the form of fully paid and
nonassessable stock and shall deliver certificates therefor as soon as
practicable thereafter. The stock certificates for any shares of Stock issued
hereunder shall, unless such shares are registered or an exemption from
registration is available under applicable federal and state law, bear a
legend
restricting transferability of such shares, and if such shares are subject
to a
Stock Restriction Agreement pursuant to Section 3(e) hereof, shall
bear a
legend referencing the Stock Restriction Agreement.
4. Termination
of Employment.
(a) Exercise
Period Following
Termination of Employment. Unless the Option has earlier terminated, if the
Optionee no longer serves as a consultant to the Company is terminated, other
than as a result of the causes set forth in clauses (b), (c) or (d) below:
(i) this Option shall terminate immediately upon such termination
to the
extent of any unvested shares, and all unvested shares shall be forfeited,
and
(ii) this Option shall be exercisable until the Expiration Date with
respect to any vested shares, but in no event after the Expiration Date.
Unless
sooner terminated, this Option shall terminate in its entirety upon the
expiration of the applicable exercise period noted above in this Section
4(a).
(b) Permanent
Disability of
Optionee. Notwithstanding the provisions of Section 4(a) above,
if
the Optionee’s employment with the Company terminates as a result of his
Permanent Disability (as defined herein), (i) this Option shall terminate
immediately upon such termination of employment to the extent of any unvested
shares, and all unvested shares shall be forfeited,
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and
(ii) this Option shall be exercisable during the
six-month period following such termination of employment with respect to
any
vested shares, but in no event after the Expiration Date. Unless sooner
terminated, this Option shall terminate in its entirety upon the expiration
of
such six-month period. “Permanent Disability” shall have the meaning set forth
in Optionee’s existing Employment Agreement with the Company. If no such
Employment Agreement is in effect, then such term shall have the same meaning
as
set forth in the last existing employment agreement between Optionee and
the
Company or otherwise in accordance with the definition set forth in the
Plan.
(c) Death
of Optionee. If the
Optionee dies before the Expiration Date or other termination of the Option,
(i) this Option shall terminate immediately upon the Optionee’s death to
the extent of any unvested shares, and all unvested shares shall be forfeited,
and (ii) this Option shall be exercisable during the six-month period
following the date of death of the Optionee with respect to any vested shares,
but in no event after the Expiration Date, by the Optionee’s executor, personal
representative, or the person(s) to whom this Option is transferred by will
or
the laws of descent and distribution. Unless sooner terminated, this Option
shall terminate in its entirety upon the expiration of such six-month
period.
(d) Discharge
for Cause.
Notwithstanding anything to the contrary herein, this Option shall terminate
in
its entirety, regardless of whether the Option is vested in whole or in part,
immediately upon the Optionee’s discharge of employment for Cause. For purposes
of this Section, the term “Cause” shall have the meaning set forth in existing
Employment Agreement with the Company. If no such Employment Agreement is
in
effect, then such term shall have the same meaning as set forth in the last
existing employment agreement between Optionee and the Company or as set
forth
in the Plan.
5. Adjustments
and Business
Combinations.
(a) Adjustments
for Events Affecting
Stock. In the event of changes in the Stock of the Company by reason of any
stock dividend, spin-off, split-up, recapitalization, merger, consolidation,
business combination or exchange of shares and the like, the Administrator
shall, in its discretion, make appropriate adjustments to the number, kind,
and
price of shares covered by this Option, and shall, in its discretion and
without
the consent of the Optionee, make any other adjustments in this Option,
including but not limited to reducing the number of shares subject to the
Option
or providing or mandating alternative settlement methods such as settlement
of
the Option in cash or in shares of Stock or other securities of the Company
or
of any other entity, or in any other matters which relate to the Option as
the
Administrator shall, in its sole discretion, determine to be necessary or
appropriate.
(b) Pooling
of Interests
Transaction. Notwithstanding anything in the Plan or this Agreement to the
contrary and without the consent of the Optionee, the Administrator, in its
sole
discretion, may make any modifications to the Option, including but not limited
to cancellation, forfeiture, surrender, or other termination of the Option
in
whole or in part regardless of the vested status of the Option, in order
to
facilitate any business combination that is authorized by the Board to comply
with requirements for treatment as a pooling of interests transaction for
accounting purposes under generally accepted accounting principles.
(c) Adjustments
for Unusual Events.
The Administrator is authorized to make, in its discretion and without the
consent of the Optionee, adjustments in the terms and conditions of, and
the
criteria included in, the Option in recognition of unusual or nonrecurring
events affecting
3
the
Company, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Option or the Plan.
(d) Binding
Nature of Adjustments.
Adjustments under this Section 5 will be made by the Administrator,
whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding, and conclusive. No fractional shares will
be
issued pursuant to this Option on account of any such adjustments.
6. Confidential
Information. In
consideration of the Option granted to the Optionee pursuant to this Agreement,
the Optionee agrees and covenants that, except as specifically authorized
by the
Company, the Optionee will keep confidential any trade secrets or confidential
or proprietary information of the Company which are now or which hereafter
may
become known to the Optionee as a result of the Optionee’s employment by the
Company, and shall not at any time, directly or indirectly, disclose any
such
information to any person, firm, Company, or other entity, or use the same
in
any way other than in connection with the business of the Company, at all
times
during and after the Optionee’s employment. The provisions of this
Section 6 shall not narrow or otherwise limit the obligations and
responsibilities of the Optionee set forth in any agreement of similar import
entered into between the Optionee and the Company.
7. Non-Guarantee
of Employment.
Nothing in the Plan or this Agreement shall alter the at-will or other
employment, consultant, or director status of the Optionee, nor be construed
as
a contract of employment between the Company and the Optionee, or as a
contractual right of Optionee to continue in the employ of, the Company,
or as a
limitation of the right of the Company to discharge the Optionee at any time
with or without cause or notice.
8. No
Rights as a Stockholder. The Optionee shall not have any of the rights of a
stockholder with respect to the shares of Stock that may be issued upon the
exercise of the Option until such shares of Stock have been issued to him
or her
upon the due exercise of the Option. No adjustment shall be made for dividends
or distributions or other rights for which the record date is before the
date
such certificate or certificates are issued.
9. Nonstatutory
Nature of the
Option. The Optionee acknowledges that, upon exercise of this Option, the
Optionee will recognize taxable income in an amount equal to the excess of
the
then Fair Market Value of the shares over the Strike Price and must comply
with
the provisions of Section 10 of this Agreement with respect to any
tax
withholding obligations that arise as a result of such exercise.
10. Withholding
of Taxes. At the
time the NSO Option is exercised, in whole or in part, or at any time thereafter
as requested by the Company, the Optionee hereby authorizes withholding from
payroll or any other payment of any kind due the Optionee and otherwise agrees
to make adequate provision for foreign, federal, state, and local taxes required
by law to be withheld, if any, which arise in connection with the Option.
The
Company may require the Optionee to make a cash payment to cover any withholding
tax obligation as a condition of exercise of the Option. If the Optionee
does
not make such payment when requested, the Company may refuse to issue any
Stock
certificate under the Plan until arrangements satisfactory to the Administrator
for such payment have been made. The Administrator may, in its sole discretion,
permit the Optionee to satisfy, in whole or in part, any withholding tax
obligation which may arise in connection with the Option either by electing
to
have the Company withhold from the shares to be issued upon
4
exercise
that number of shares, or by electing to deliver to the
Company already-owned shares, in either case having a Fair Market Value equal
to
the amount necessary to satisfy the statutory minimum withholding amount
due.
11. The
Company’s Rights. The existence of this Option shall not affect in any way
the right or power of the Company or its stockholders to make or authorize
any
or all adjustments, recapitalizations, reorganizations, or other changes
in the
Company’s capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred, or other stocks
with
preference ahead of or convertible into, or otherwise affecting the Stock
or the
rights thereof, or the dissolution or liquidation of the Company, or any
sale or
transfer of all or any part of the Company’s assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
12. Optionee.
Whenever the word
“Optionee” is used in any provision of this Agreement under circumstances where
the provision should logically be construed, as determined by the Administrator,
to apply to the estate, personal representative, or beneficiary to whom this
Option may be transferred by will or by the laws of descent and distribution,
the word “Optionee” shall be deemed to include such person.
13. Nontransferability
of Option.
This Option is nontransferable otherwise than by will or the laws of descent
and
distribution and during the lifetime of the Optionee, the Option may be
exercised only by the Optionee or, during the period the Optionee is under
a
legal disability, by the Optionee’s guardian or legal representative. Except as
provided above, the Option may not be assigned, transferred, pledged,
hypothecated, or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment, or similar
process.
14. Notices.
All notices and other
communications made or given pursuant to this Agreement shall be in writing
and
shall be sufficiently made or given if hand-delivered or mailed by certified
mail, addressed to the Optionee at the address contained in the records of
the
Company, or addressed to the Administrator, care of the Company for the
attention of its Corporate Secretary at its principal office or, if the
receiving party consents in advance, transmitted and received via telecopy
or
via such other electronic transmission mechanism as may be available to the
parties.
15. Entire
Agreement. This Agreement contains the entire agreement between the parties
with respect to the stock option granted hereunder. Any oral or written
agreements, representations, warranties, written inducements, or other
communications made before the execution of this Agreement with respect to
the
stock option granted hereunder shall be void and ineffective for all
purposes.
16. Amendment.
This Agreement may
not be modified, except as provided in the Plan or in a written document
signed
by each of the parties hereto.
17. Conformity
with Plan. This
Agreement is intended to conform in all respects with, and is subject to
all
applicable provisions of, the Plan, which is incorporated herein by reference.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. In the event of any ambiguity in this
Agreement or any matters as to which this Agreement is silent, the Plan shall
govern. A copy of the Plan is available upon request to the Administrator.
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18. Governing
Law. This Agreement
shall be governed by and construed in accordance with the laws of the State
of
New Jersey, other than the conflict of laws principles thereof. All actions
to
enforce or interpret this Agreement shall be brought in an exclusive forum
in
New Jersey determined by the Administrator.
19. Headings.
The headings in this
Agreement are for reference purposes only and shall not affect the meaning
or
interpretation of this Agreement.
IN
WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its duly authorized
officer as of the date first above written.
|
XXXXXX.XXX,
INC.
|
||
| |
|
|
| By: | /s/ Xxxx Xxxxxxxx | |
|
Xxxx Xxxxxxxx, CEO |
||
The
undersigned hereby acknowledges that he/she has carefully read
this Agreement and the Plan and agrees to be bound by all of the provisions
set
forth in such documents.
| OPTIONEE: | ||
| |
|
|
| /s/ Xxxx Xxxxxxx | ||
|
Xxxx
Xxxxxxx
|
||
|
Date:
As of June 21,
2005
|
||
6
EXHIBIT
1
NOTICE
OF GRANT OF STOCK OPTIONS
| Optionee: | Xxxx Xxxxxxx |
| Grant Date: | June 21, 2005 |
| Number of Shares Subject | |
| To The Option: | 100,000 (NSOs) |
| Strike Price Per Share: | $0.45 |
| Vesting: | Immediate |
| Expiration Date: | June 30, 2012 |
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