STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 20th day of June, 1997, by and
between RCM TECHNOLOGIES, INC., a corporation organized and existing under the
laws of the State of Nevada ( the "Company") and Xxxxx X. Xxxxxx ("Xxxxxx").
W I T N E S E T H
WHEREAS, the Company considers it desirable and in its best interests
to grant to Xxxxxx an added incentive to advance the interests of the Company by
possessing an option to purchase additional shares of common stock, $.05 par
value in accordance with the 1996 Executive Stock Option Plan adopted by the
directors of the Company on August 15, 1996.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND
COVENANTS CONTAINED IN THIS AGREEMENT AND INTENDING TO BE
LEGALLY BOUND HEREBY, THE COMPANY AND XXXXXX AGREE AS FOLLOWS:
1. Grant of Option
The Company hereby grants to Xxxxxx, an option (the "Option") to
purchase 50,000 shares of the Company's common stock, $.05 par value, fully paid
and nonassessable (the "Shares") at the purchase price of 10.125 (the "Option
Price") effective June 20, 1997 in the manner and subject to the conditions
hereinafter provided.
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2. Time of Exercise of Option
Provided Xxxxxx has been continuously employed by the Company for a minimum
period of one (1) year since the date of this agreement, the Option may be
exercised at any time, and from time to time, in whole or in part, until the
termination thereof as provided in Paragraph 4 below, provided, however, that
the administrators of the Plan, The Compensation Committee (the "Committee"),
may limit the number of Shares that he may exercise in any one year.
3. Method of Exercise
The Option shall be exercised by written notice to the Company at the
Company's principal place of business. Payment of the Option Price shall be made
in full in cash or by check at the time of exercise of the Option.
As soon as practicable after receipt by the Company of Xxxxxx' written
notice of exercise and payment of the Option Price for all Shares with respect
to which an Option has been exercised, a certificate representing such Shares
shall be delivered to him at his address as it appears in the payroll records of
the Company or such other address as may be designated by him.
4. Termination of Option
Except as herein otherwise stated, the Option to the extent not
heretofore exercised shall terminate upon the first to occur of the following
dates:
(a) the expiration of three months after the date of which Xxxxxx'
employment with the Company is terminated for any reason except disability and
death;
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(b) if Xxxxxx' employment with the Company is terminated by reason of
disability (within the meaning of Internal Revenue Code Section 105(d) (4) ),
his Option may be exercised at any time within twelve months from the date of
such termination;
(c) if Xxxxxx' employment with the Company is terminated by reason of
death, his Option may be exercised by his legal representative within twelve
months after his death;
(d) June 20, 2007 (being the expiration of ten years from the grant
of this Option).
5. Condition to Exercise of Option
As a condition precedent to the exercise of the Option and issuance of
Shares, the Company shall be satisfied that registration of such Shares is not
required under the Securities Act of 1933 or any other applicable securities law
including that all of the requirements to establish an exemption from any such
registration requirements have been met. The Company shall not be required to
register the Option or the Shares under the Securities Act of 1933 (the "Act")
or any other securities law. 6. Restrictions on Disposition of Shares Issued
Upon Exercise
No disposition of Shares acquired pursuant to the exercise of this
Option shall be made within two years of the date hereof.
7. Adjustments Upon Changes in Common Stock
In the event there is a stock dividend paid in shares of the Company's
common stock or a recapitalization, a reclassification, stock split or a
combination of shares with respect to such stock, the Committee shall have the
power as provided in Section 6.9 of the 1996 Executive Stock Option Plan to make
appropriate adjustments of the Option Price and/or of
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the numbers of Shares as to which such Option is then exercisable, to the end
that Xxxxxx' proportionate interest shall be maintained as before the occurrence
of such event.
Upon any adjustment made pursuant to this Section 7, the Company will,
upon request, deliver to him, a certificate of the Company's Secretary or an
Assistant Secretary setting forth the Option Price thereafter in effect and the
number and kind of shares, other securities or other property thereafter
purchasable on the exercise of such Option.
8. Event of Liquidation, Dissolution, Merger or Consolidation
In the event the Company shall liquidate or dissolve, or shall be a
party to a merger or consolidation as provided in Section 6.9 (a) of the 1996
Executive Stock Option Plan, the Company shall give written notice to him at
least thirty (30) days prior to the effective date thereof, and he shall have
the right within said thirty (30) day period to exercise his Option in full to
the extent not previously exercised; provided, however, that in no event shall
such options be exercised after June 20, 2007. To the extent that he shall not
have exercised his options on or prior to the effective date of any liquidation,
dissolution, merger or consolidation, Xxxxxx' Options shall terminate on the
date of such liquidation, dissolution, merger or consolidation. 9. Xxxxxx
Represents and Warrants as Follows:
(a) Xxxxxx is familiar with the business and financial condition of the
Company and all reasonable requests for information with respect thereto made by
him to the Company have been fulfilled to the satisfaction of him; (b) he has
been advised that the proceeds realized by the Company from the sale of any
shares purchased pursuant hereto will be used
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for general corporate purposes; (c) he has been advised that the Board of
Directors has the right at any time to issue additional shares of stock and the
issuance thereof would dilute the percentage of the outstanding stock of the
Company represented by the Shares to be purchased hereto; (d) in connection with
the Option granted hereby and any Shares subscribed for hereunder, Xxxxxx has
not received any public media advertisements and has not been solicited by any
form of mass mailing solicitation; (e) any Shares when acquired will be acquired
by him for investment and not with a view to the distribution or resale thereof;
(f) Xxxxxx is able to bear the economic risk of his investment; and (g) Xxxxxx
understands that the share certificates issued to him upon the exercise of his
Option will be appropriately legended to indicate the restrictions on transfer
in accordance with this Section.
Xxxxxx further warrants that upon the grant of this Option: (i) the
number of common shares then subject to all options to purchase held by Xxxxxx,
plus the common shares then owned by Xxxxxx will not constitute more than thirty
percent (30%) of the total combined voting power of all classes of stock of the
Company, or a parent or a subsidiary of the Company; and (ii) the aggregate fair
market value (determined as of the time an option is granted) of the common
shares with respect to which incentive stock options are exercisable for the
first time by Xxxxxx during any calendar year (under the 1996 Executive Stock
Option Plan and any other incentive stock option plans of the Company and a
parent or a subsidiary of the Company) will not exceed $1,000,000.00.
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Xxxxxx agrees to hold harmless and indemnify the Company, its directors and
officers from and against any and all liabilities resulting to it through
violation by Xxxxxx of the above warranties and representations.
10. Rights Prior to Exercise of Option
This Option is nontransferable by Xxxxxx, except in the event of his death
as provided in Paragraph 4(c) above, and during his lifetime is exercisable only
by him. Xxxxxx shall have no rights as stockholder with respect to the Option
Shares until payment of the Option Price and delivery to him of such shares as
herein provided.
11. Binding Effect
This agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
12. Notices
Any and all notices, designations, consents, offers, acceptances or any
other communications provided for herein shall be given in writing by registered
or certified mail, return receipt requested, which will be addressed, in the
case of the Company, to its principal office and in the case of Xxxxxx to his
address appearing in the payroll records of the Company or to such other address
as may be designated by him.
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13. Governing Law
This Agreement shall be construed and governed in accordance with the
laws of the State of Nevada.
( SEAL)
RCM TECHNOLOGIES, INC.
Attest:_____________________ By:_________________________________
Xxxxxxx X. Xxxxx,
Chairman, Compensation Committee
Witness:____________________ _________________________________
Xxxxx X. Xxxxxx
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