Option No. 2005-1
STELLAR TECHNOLOGIES, INC.
STOCK OPTION AGREEMENT
UNDER THE
STELLAR TECHNOLOGIES, INC.
2005 STOCK INCENTIVE PLAN
This Agreement is made as of the date set forth on Schedule A hereto (the
"Grant Date") by and between Stellar Technologies, Inc. (the "Company"), and the
person named on Schedule A hereto (the "Optionee").
WHEREAS, Optionee is a valuable employee of either the Company or any
Company Participating Group (hereinafter collectively or separately referred to
as the "Company"), which includes all subsidiaries of the Company, and whereas
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
incentive to advance the interests of the Company by granting the Optionee an
option to purchase shares of common stock of the Company (the "Common Stock");
and
WHEREAS, to cover the granting of such Options, the Company has adopted the
Stellar Technologies, Inc. 2005 Stock Incentive Plan (the "Plan").
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree that as of the Grant Date, the Company hereby grants Optionee an option
(the "Option") to purchase from it, upon the terms and conditions set forth in
this Agreement and the Plan, that number of shares of the authorized and
unissued Common Stock of the Company as is set forth on Schedule A hereto.
1. Terms of Stock Option. The Option to purchase Common Stock granted
hereby is subject to the terms, conditions, and covenants set forth in the Plan
as well as the following:
(a) The Optionee has been provided with, reviewed and fully
understood, the terms, conditions and covenants, of the Plan;
(b) This Option is granted under, and subject in its entirety to, the
terms of the Plan;
(c) The per share exercise price for the shares subject to this
Option shall be no less than the fair market value (as defined in
the Plan) of the Common Stock on the Grant Date, which exercise
price is set forth on Schedule A hereto;
(d) This Option shall vest in accordance with the vesting schedule
set forth on Schedule A hereto, subject to whatever other
limitations are set forth within the Plan or contained in this
Agreement;
(e) No portion of this Option may be exercised more than ten (10)
years from the Grant Date; and
(f) This Option shall be subject to the restrictions on
transferability set forth within the Plan.
2. Payment of Exercise Price. The Option may be exercised, in part or in
whole, only by written request to the Company accompanied by payment of the
exercise price in full either: (i) in cash for the shares with respect to which
it is exercised; (ii) by set off against any amounts owed to the Optionee by the
Company; (iii) if the shares underlying the option are registered under the
Securities Act, by delivering to the Company a notice of exercise with an
irrevocable and unconditional direction to a creditworthy broker-dealer
registered under the Securities Exchange Act of 1934, as amended, to sell a
sufficient portion of the shares and deliver the sale proceeds directly to the
Company to pay the exercise price; or (iv) by delivering previously owned shares
of Common Stock or a combination of shares and cash having an aggregate Fair
Market Value (as defined in the Plan) equal to the exercise price of the shares
being purchased; provided, however, that shares of Common Stock delivered by the
Optionee may be accepted as full or partial payment of the exercise price for
any exercise of the Option hereunder only if the shares have been held by the
Optionee for at least six (6) months, are not subject to any repurchase, vesting
or similar right, and such method of payment is then permitted by law.
3. Miscellaneous.
(a) This Agreement is binding upon the parties hereto and their
respective heirs, personal representatives, successors and
assigns.
(b) This Agreement will be governed and interpreted in accordance
with the laws of the State of Colorado, and may be executed in
more than one counterpart, each of which shall constitute an
original document.
(c) No alterations, amendments, changes or additions to this
agreement will be binding upon either the Company on or Optionee
unless reduced to writing and signed by both parties.
(d) Capitalized terms used within this Agreement unless otherwise
defined, shall have the meaning ascribed thereto in the Plan.
(e) Nothing contained herein shall be construed as a guarantee of
continued employment of Optionee for any specific duration of
time.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Grant Date.
STELLAR TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Authorized Executive Officer
OPTIONEE
/s/ Xxxx X. Xxxxx
----------------------------------------
Signature
Xxxx X. Xxxxx
Print Name
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Schedule A
1. Optionee: Xxxx X. Xxxxx
2. Grant Date: December 16, 2005
3. Number of Shares of Common Stock covered by the Option: 250,000
4. Exercise Price: $.40
5. The Option shall vest in accordance with the following schedule:
(a) General Vesting Provisions:
(i) Options to purchase 83,333 shares shall vest on December 16, 2006 (the
"First Anniversary Date") provided Optionee remains continuously
employed by the Company from the Grant Date through the First
Anniversary Date; and if Optionee shall not remain continuously
employed by the Company through the First Anniversary Date, Optionee
shall forfeit upon such termination of service, the right to vest in
all of the Options granted under this Agreement;
(ii) thereafter, on December 16, 2007 (the "Second Anniversary Date"),
Options to purchase 83,333 shares shall vest provided Optionee remains
continuously employed by the Company from the Grant Date through the
Second Anniversary Date; and if a termination of service occurs prior
to the Second Anniversary Date, all of the unvested Options as of the
date such termination of service shall no longer continue to vest
after such termination of service, and thereafter Optionee shall
forfeit any and all rights to any unvested Options; and
(iii) thereafter, on December 16, 2008 (the "Third Anniversary Date"),
Options to purchase 83,334 shares shall vest provided Optionee remains
continuously employed by the Company from the Grant Date through the
Third Anniversary Date; and if a termination of service occurs prior
to the Third Anniversary Date, all of the unvested Options as of the
date of such termination of service shall no longer continue to vest
after such termination of service, and thereafter Optionee shall
forfeit any and all rights to any unvested Options.
(b) Other:
(i) upon whatever earlier dates as are permitted by the Company in its
sole discretion; or
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(ii) as otherwise provided for, and in accordance with, the terms and
provisions of the Plan.
6. Once a termination of employment or other service to the Company occurs,
all Options to which Optionee is then entitled to exercise may only be
exercised, if at all, in accordance with, and subject to, the terms and
provisions of the Plan, unless otherwise provided for in this Option
Agreement.
STELLAR TECHNOLOGIES, INC.
By: /s/Xxxx X. Xxxxxxx
------------------------------------
Authorized Executive Officer
OPTIONEE
/s/ Xxxx X. Xxxxx
----------------------------------------
Signature
Xxxx X. Xxxxx
Name
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