EXHIBIT 10.2
NONINCENTIVE
STOCK OPTION AGREEMENT
THIS
NONINCENTIVE STOCK OPTION AGREEMENT (“Agreement”) is entered into as of August
8, 2005, by and between Media Sciences International, Inc., a Delaware corporation (the
“Company”), and Xxxxxx Xxxx (the “Optionee”).
R E C I T A L S
Whereas,
Optionee is a valuable employee of the Company, and the Company considers it desirable and
in the best interest of the Company to afford the Optionee an opportunity to purchase
shares of the Company’s common stock, par value $.001 per share (the “Common
Stock”) ;
Now,
therefore, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:
A G R E E M E N T
It
is hereby agreed as follows:
1.
GRANT OF OPTIONS. Optionee has been granted the right, privilege, and option to
purchase up to 100,000 shares of Common Stock, subject to vesting as set forth
herein, at the purchase price equal to the fair market value of the
Company’s common stock of $1.65 per share (the “Options”) on the
date of this Agreement, in the manner and subject to the conditions hereinafter
provided. The time the Options shall be deemed granted, sometimes referred to
herein as the “date of grant,” shall be the date of this Agreement.
50,000 Options shall vest on the date of Optionee’s relocation, if, and
when, Optionee relocates to Oakland, New Jersey or the surrounding area (the
“Relocation Date”), and the other 50,000 Options shall vest at the
rate of 10,000 Options per year starting on the first year annversary of the
Relocation Date. These Options are cumulative and are subject to anti-dilution
rights.
2.
CONDITION OF CONTINUED SERVICES TO THE COMPANY. The Options are subject to
certain conditions of continued service of the Optionee by the Company. In the
event the Optionee’s employment with the Company is terminated, at any
time, for whatever reason, all Options which have not vested as of the
Optionee’s termination of service date in accordance with the vesting
schedule set forth herein shall be immediately forfeited upon such termination.
In the event the Optionee’s employment with the Company is terminated, at
any time, for whatever reason, all vested but unexercised Options and rights to
such Options shall be forfeited on the one hundred and eightieth (180th) day
after the date of termination of employment. Nothing contained in this Agreement
shall obligate the Company to employ or have another relationship with the
Optionee.
3.
OPTION PERIOD. Options shall be exercisable at any time during the period,
subject to vesting as provided in Section 1, from the date of this Agreement and
expiring on the date ten (10) years from the date hereof, unless earlier
terminated pursuant to Section 2 or Section 14 of this Agreement, or if said day
is a day on which banking institutions are authorized by law to close, then on
the next succeeding day which shall not be such a day.
4.
AMOUNT OF PURCHASE PRICE. The purchase price per Share for each share which the
Optionee is entitled to purchase under the Options shall be $1.65 per Share.
5.
METHOD OF EXERCISE. The Options shall be exercisable by the Optionee by giving
written notice to the Company of the election to purchase and of the number of
Shares the Optionee elects to purchase, such notice to be accompanied by such
other executed instruments or documents as may be required by the Board of
Directors pursuant to this Agreement, and unless otherwise directed by the Board
of Directors, the Optionee shall at the time of such exercise tender the
purchase price of the Shares she has elected to purchase. The Optionee may
purchase less than the total number of Shares for which the Option is
exercisable, provided that a partial exercise of an Option may not be for less
than One Hundred (100) Shares. If the Optionee shall not purchase all of the
Shares which she is entitled to purchase under the Options, her right to
purchase the remaining unpurchased Shares shall continue until expiration of the
Options. The Options shall be exercisable with respect of whole Shares only, and
fractional Share interests shall be disregarded.
6.
PAYMENT OF PURCHASE PRICE. At the time of the Optionee’s notice of exercise
of the Options, the Optionee shall tender in cash or by certified or bank
cashier’s check payable to the Company, the purchase price for all Shares
then being purchased.
7.
ISSUANCE OF STOCK CERTIFICATES. Upon receipt of the materials delivered by the
Optionee indicating exercise of the Options, the Company shall, as promptly as
practicable and in any event within five (5) business days thereafter, execute
and deliver, or cause to be executed and delivered, to the Optionee a
certificate or certificates representing the aggregate number of Shares
specified in such notice or form together with cash in lieu of any fractional
share as hereinafter provided. The certificate or certificates so delivered
shall be in such denomination or denominations as may be specified in such
notice or form and shall be registered in the name of the Optionee or such other
name as shall be designated (together with an address) in such notice or form.
Such certificate(s) shall be deemed to have been issued and the Optionee or any
other person so designated to be named therein shall be deemed to have become a
holder of record of such Shares as of the exercise date. The Company shall pay
all expenses and other charges payable in connection with the preparation,
issuance and delivery of share certificates under this Section except that, in
the case such share certificates shall be registered in a name or names other
than the name of the Optionee, funds sufficient to pay all share transfer taxes
which shall be payable upon issuance of such share certificate or certificates
shall be paid by the Optionee at the time the notice of exercise hereinabove is
delivered to the Company.
8.
SHARES FULLY PAID. All Shares shall be, when issued, duly authorized, validly
issued and non-assessable.
9.
NO IMPAIRMENT. The Company will not, by amendment of its charter or though
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of the Options, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Optionee of the Options against impairment. Notwitstanding the
foregoing, in the event of a “change of control” as defined in the
Employment Agreement, the Options shall vest immediately in their entirety.
10.
RESERVATION OF SHARES. The Company hereby agrees that, during the time period
the Options are exercisable, there shall be reserved for issuance and/or
delivery upon exercise of the Options such number of shares of its common stock
as shall be required for issuance or delivery upon exercise of the Options.
11.
FRACTIONAL SHARES. With respect to any fraction of a Share called for upon any
exercise hereof, the Optionee agrees to waive the Optionee’s right to such
fractional Shares. As such, no fractional Shares or scrip representing
fractional Shares shall be issued upon the exercise of the Options
12.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein, the term
“Adjustment Event” means an event pursuant to which the outstanding
shares of the Company are increased, decreased or changed into, or exchanged for
a different number or kind of shares or securities, without receipt of
consideration by the Company, through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split, stock dividend, stock
consolidation or otherwise. The term “Adjustment Event” shall also
mean to include: (i) any issuance by the Company of the Company’s
securities (excluding securities issued to the Company’s employees,
directors, consultants and others similarly situtated) below fair market value
for such securities as determined at the time of issuance; and (ii) any issuance
at a price below the purchase price per Share for the common stock underlying
the Options, as adjusted. Upon the occurrence of an Adjustment Event, (i)
appropriate and proportionate adjustments shall be made to the number and kind
and exercise price for the shares subject to the Options, and (ii) appropriate
amendments to this Agreement shall be executed by the Company and the Optionee
if the Board of Directors in good faith determines that such an amendment is
necessary or desirable to reflect such adjustments. If determined by the Board
of Directors to be appropriate, in the event of an Adjustment Event which
involves the substitution of securities of a corporation other than the Company,
the Board of Directors shall make arrangements for the assumptions by such other
corporation of the Options. Notwithstanding the foregoing, any such adjustment
to the Options shall be made without change in the total exercise price
applicable to the unexercised portion of the Options, but with an appropriate
adjustment to the number of shares, kind of shares and exercise price for each
share subject to the Options. The good faith determination by the Board of
Directors as to what adjustments, amendments or arrangements shall be made
pursuant to this Section, and the extent thereof, shall be final and conclusive,
provided that the Options herein are adjusted in a manner that is no less
favorable than the manner of adjustment used as to any other options issued by
the Company to its employees, directors, consultants or in any transaction. No
fractional Shares shall be issued on account of any such adjustment or
arrangement.
13.
RIGHTS OF THE OPTIONEE. The Optionee shall not be entitled to the privileges of
stock ownership as to any Shares not actually issued and delivered to the
Optionee. No Shares shall be purchased upon the exercise of any Options unless
and until, in the opinion of the Company’s counsel, any then applicable
requirements of any laws, or governmental or regulatory agencies having
jurisdiction, and of any exchanges upon which the stock of the Company may be
listed shall have been fully complied with.
14.
EFFECT OF DEATH OF THE OPTIONEE. If the Optionee dies, all Options shall expire
six (6) months thereafter. During such six (6) month period (or such shorter
period prior to the expiration of the Option by its own terms), such Options may
be exercised by the executor or administrator or the person or persons to whom
the Option is transferred by will or the applicable laws of descent and
distribution, as the case may be, but only to the extent such Options were
exercisable on the date the Optionee died.
15.
NONTRANSFERABILITY OF OPTIONS. The Options shall not be transferable, either
voluntarily or by operation of law, otherwise than by will or the laws of
descent and distribution and shall be exercisable during the Optionee’s
lifetime only by the Optionee.
16.
SECURITIES LAWS COMPLIANCE. The Company will diligently endeavor to comply with
all applicable securities laws before any stock is issued pursuant to the
Options. Without limiting the generality of the foregoing, the Company may
require from the Optionee such investment representation or such agreement, if
any, as counsel for the Company may consider necessary in order to comply with
the Securities Act of 1933 as then in effect, and may require that the Optionee
agree that any sale of the Shares will be made only in such manner as is
permitted by the Board of Directors. The Optionee shall take any action
reasonably requested by the Company in connection with registration or
qualification of the Shares under federal or state securities laws.
17.
SECURITIES SUBJECT TO LEGEND. If deemed necessary by the Company’s counsel,
all certificates issued to represent the Options and/or the Shares purchased
upon exercise of the Options shall bear such appropriate legend conditions as
counsel for the Company shall require in substantially the following form:
|
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY BE TRANSFERRED ONLY (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (B) IN
ACCORDANCE WITH THE ACT AND SUBJECT TO RECEIPT OF AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE ISSUER THAT THE PROPOSED TRANSACTION IS EXEMPT FROM REGISTRATION
UNDER THE ACT.” |
18.
REPRESENTATIONS OF OPTIONEE.
(a)
SOPHISTICATION OF OPTIONEE. The Optionee acquired the Options for investment and
not with a view to the sale or distribution thereof, and the Optionee has no
commitment or present intention to liquidate the Company or to sell or otherwise
dispose of the Options or the underlying Shares. The Optionee represents and
warrants that, by reason of financial, tax and business sophistication, income,
net assets, education, background and business acumen, the Optionee has the
experience and knowledge in business and financial matters to evaluate the risks
and merits attendant to an investment decision in the Company, either singly or
through the aid and assistance of a competent professional, and is fully capable
of bearing the economic risk of loss of the total investment pursuant to this
Agreement. The Optionee represents and warrants to the Company that the Optionee
has been an employee of the Company and is fully familiar with its business and
oeprations and has been provided with, and has had access to, all material
information about the Company.
(b)
LOCK-UP RESTRICTIONS. The Optionee hereby agrees to any lockup of the Shares
which the Board of Directors of the Company requests when requested by an
investment banker or underwriter providing financing to the Company.
19.
MISCELLANEOUS.
(a)
Binding Effect. This Agreement shall bind and inure to the benefit of the
successors, assigns, transferees, agents, personal representatives, heirs and
legatees of the respective parties.
(b)
Further Acts. Each party agrees to perform any further acts and execute and
deliver any documents which may be necessary to carry out the provisions of this
Agreement.
(c)
Amendment. This Agreement may be amended at any time by the written agreement of
the Company and the Optionee.
(d)
Syntax. Throughout this Agreement, whenever the context so requires, the
singular shall include the plural, and the masculine gender shall include the
feminine and neuter genders. The headings and captions of the various Sections
hereof are for convenience only and they shall not limit, expand or otherwise
affect the construction or interpretation of this Agreement.
(e)
Choice of Law. The parties hereby agree that this Agreement has been executed
and delivered in the State of New York and shall be construed, enforced and
governed by the laws thereof. This Agreement is in all respects intended by each
party hereto to be deemed and construed to have been jointly prepared by the
parties and the parties hereby expressly agree that any uncertainty or ambiguity
existing herein shall not be interpreted against either of them.
(f)
Severability. In the event that any provision of this agreement shall be held
invalid or unenforceable, such provision shall be severable from, and such
invalidity or unenforceability shall not be construed to have any effect on, the
remaining provisions of this agreement.
(g)
Notices. All notices and demands between the parties hereto shall be in writing
and shall be served either by registered or certified mail, and such notices or
demands shall be deemed given and made forty-eight (48) hours after the deposit
thereof in the United States mail, postage prepaid, addressed to the party to
whom such notice or demand is to be given or made, and the issuance of the
registered receipt therefor. If served by telegraph, such notice or demand shall
be deemed given and made at the time the telegraph agency shall confirm to the
sender, delivery thereof to the addressee. All notices and demands to the
Optionee or the Company may be given to them at the following addresses:
If
to the Optionee: |
Xxxxxx Xxxx
00000 X. Xxxxx Xxx.
Xxxxxx, XX 00000 |
If to Corporation: |
Media Sciences International, Inc.
0 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn.: Board of Directors |
With a copy to: |
Law Offices of Xxx Xxxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
|
Such
parties may designate in writing from time to time such other place or places that such
notices and demands may be given.
(h)
Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, this Agreement
supersedes all prior and contemporaneous agreements and understandings of the
parties, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof except as set
forth or referred to herein. No supplement, modification or waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall constitute a waiver of any other provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
(i)
Attorneys’ Fees. In the event that any party to this Agreement institutes
any action or proceeding, including, but not limited to, litigation or
arbitration, to preserve, to protect or to enforce any right or benefit created
by or granted under this Agreement, the prevailing party in each respective such
action or proceeding shall be entitled, in addition to any and all other relief
granted by a court or other tribunal body, as may be appropriate, to an award in
such action or proceeding of that sum of money which represents the
attorneys’ fees reasonably incurred by the prevailing party therein in
filing or otherwise instituting and in prosecuting or otherwise pursuing or
defending such action or proceeding, and, additionally, the attorneys’ fees
reasonably incurred by such prevailing party in negotiating any and all matters
underlying such action or proceeding and in preparation for instituting or
defending such action or proceeding.
IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set
forth above.
_______________________________________________________
Xxxxxx Xxxx (the
“Optionee”)
MEDIA SCIENCES
INTERNATIONAL, INC.
By:____________________________________________________
Xxxxxxx X. Xxxxx, Director