NATIONAL PATENT DEVELOPMENT CORP. NON-QUALIFIED STOCK OPTION AGREEMENT
Exhibit
10.1
AGREEMENT,
dated July 30, 2007 (the “Grant Date”), between National Patent Development
Corporation, a Delaware corporation (the “Company”), with an address at 00 Xxxx
00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, and Xxx Xxxxxxx (the “Grantee”),
with an address c/o 00 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX
00000.
WHEREAS,
the Board has, on the Grant Date, pursuant to the National Patent Development
Corporation 2003 Incentive Stock Plan, a copy of which is annexed hereto as
Exhibit A (the “Plan”; capitalized terms used but not defined herein having the
meanings ascribed thereto in the Plan), granted to the Grantee options to
purchase shares of the common stock, par value $.01 per share, of the Company
(the “Common Stock”), as hereinafter set forth, and authorized the execution and
delivery of this Agreement;
NOW,
THEREFORE, the parties hereto agree as follows:
1. The
Grantee is hereby granted options (the “Options”) to purchase from the Company,
subject to the terms and conditions set forth in this Agreement, all or any
part
of 100,000 shares of Common Stock (the “Option Shares”) at an initial purchase
price of $2.68 per share.
2. The
Options shall be exercisable as follows and subject to the continuous employment
of the Grantee with the Company until the applicable vesting date:
unless
sooner terminated as hereinafter provided, this Option shall become vested
and
exercisable with respect to up to one-third (rounded down to the nearest whole
Option Share) of the Option Shares on the first anniversary of the Grant Date,
one-third (rounded down to the nearest whole Option Share) of the Option Shares
on the second anniversary of the Grant Date and the balance of the Option Shares
on the third anniversary of the Grant Date.
3.The
Options shall automatically become vested and shall be immediately exercisable
in full upon the occurrence of a Change in Control of the
Company. For purposes of this Agreement, a “Change in Control”
of the Company shall be deemed to have occurred if (i) a change in control
of
the Company of a nature that would be required to be reported in response to
Item 5.01 of Current Report on Form 8-K pursuant to Section 13 or 15(d) of
the
Exchange Act, other than a change of control resulting in control by Grantee
or
a group including Grantee occurs, (ii) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than Grantee or a group
including Grantee, is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company’s
then outstanding securities, or (iii) within any 12-month period beginning
on or
after the date that is three months after the date hereof, the persons who
were
directors of the Company immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other than death) to
constitute at least a majority of the Board of the Company or the board of
directors of any successor to the Company, provided that any director who was
not a director of the Company immediately before the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to
the
Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors either
actually or by prior operation of this Section 3, unless such election,
recommendation or approval was the result of an actual or threatened election
contest of the type contemplated by Regulation 14a-11 promulgated under the
Exchange Act of or any successor
provision. Notwithstanding the foregoing, no Change of Control shall
be deemed to occur as a result of the beneficial ownership of securities of
the
Company by Bedford Oak Advisors, LLC, Bedford Oak Partners, L.P. or Xxxxxx
X.
Xxxxx.
4. All
Options shall terminate and thereafter no longer be exercisable (subject to
Section 8) on the tenth anniversary of the Grant Date (the “Expiration
Date”).
5. Option
Shares purchased pursuant to this Agreement shall be paid for in full at the
time of purchase. Payment may be made in cash, check, tendering by
attestation shares of Common Stock, or a combination thereof, provided that
such
consideration shall be such that the Option Shares shall be fully paid and
nonassessable. If payment is made in whole or part by tender of
shares of Common Stock, such shares shall be valued at the Fair Market Value
thereof. Upon receipt of written notice of exercise of Options in the
form attached hereto as Exhibit B together with payment and delivery of any
other required documentation, the Company shall, without stock transfer tax
to
the Grantee or any other person entitled to exercise such Options, deliver
to
the person exercising such Options a certificate or certificates for the Option
Shares so purchased. It shall be a condition to the performance of
the Company’s obligation to issue or transfer Common Stock upon exercise of
Options that the Grantee or other person exercising such Options pay, or make
provision satisfactory to the Company for the payment of, any taxes (other
than
stock transfer taxes) which the Company is obligated to collect with respect
to
the issue or transfer of Common Stock upon exercise, including any Federal,
state, or local withholding taxes.
6. No
person shall have any rights as a stockholder with respect to any Option Shares
until the date a stock certificate is issued to such person for such Option
Shares. Except as otherwise expressly provided herein, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
7. Options
are not transferable otherwise than by will or the laws of descent and
distribution and are exercisable, during the lifetime of the Grantee, only
by
the Grantee or, in the event of Grantee’s legal disability, by the Grantee’s
legal representative. The Grantee or his representative shall give
the Company notice of any transfer, specifying the name and address of the
transferee and the number and class of Options transferred.
8. (a) If,
for any reason other than death or disability, Grantee’s Termination of Service
occurs prior to the Expiration Date, such Options may be exercised, but only
to
the extent of the number of Option Shares and with the exercise price with
respect to which the Grantee
could have exercised it on the date of such Termination of Service, by the
Grantee at any time prior to the earlier of (i) the Expiration Date and (ii)
two
months after the date of such Termination of Service.
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(b) If
Grantee becomes disabled (within the meaning of section 22(e)(3) of the Code)
prior to the Expiration Date, and the Grantee’s Termination of Service occurs as
a consequence of such disability, the Options may be exercised, but only to
the
extent of the number of Option Shares and with the exercise price with respect
to which the Grantee could have exercised it on the date of such Termination
of
Service, by the Grantee at any time prior to the earlier of (i) the Expiration
Date and (ii) six months after the date of such Termination of
Service. In the event of the Grantee’s legal disability, the Options
may be exercised by the Grantee’s legal representative.
(c) If
Grantee’s Termination of Service occurs as a result of death prior to the
Expiration Date, or if the Grantee dies following his or her Termination of
Service but prior to the expiration of the period determined under Sections
8(a)
and (b) above, the Options may be exercised, but only to the extent of the
number of Option Shares and with the exercise price with respect to which the
Grantee could have exercised them on the date of his or her death, by the
Grantee’s estate, personal representative, or beneficiary who acquired the right
to exercise the Options by bequest or inheritance or by reason of the death
of
the Grantee. Such post-death exercise may occur at any time prior to
the earlier of (i) the Expiration Date and (ii) one year after the date of
the
Grantee’s death.
(d) If
the issuance of any shares of Common Stock on the exercise of any Options
pursuant to this Section 8 has not, at the time of such exercise, been
registered under the Securities Act, the Grantee or other person exercising
such
Options shall execute and deliver such documents as the Company may reasonably
require to ensure compliance with the Securities Act and other applicable
securities laws, including acknowledgement that such shares are “restricted
securities” as defined in the regulations under the Securities Act and are
acquired for investment purposes only and not with a view to resale or
distribution.
9. The
number and kind of shares issuable on exercise of, and the exercise price of,
the Options represented hereby shall be subject to adjustment as provided in
the
Plan.
10. The
Company shall at all times reserve and keep available out of its authorized
Common Stock the full number of shares of Common Stock issuable upon exercise
of
the Options.
11. (a) If
at any time the Committee or the Board shall determine, in its discretion,
that
the listing, registration, or qualification of any of the Option Shares upon
any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a
condition of, or in connection with, the issue or purchase of Option Shares,
the
Options may not be exercised in whole or in part unless such listing,
registration, qualification, consent, or approval shall have been effected
or
obtained free of any conditions not acceptable to the Committee or the Board,
as
applicable. Any notice of exercise of Options which would be
effective except for this Section 11 shall be deemed effective immediately
upon
satisfaction of all such conditions (even if such notice could not otherwise
then have been given).
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(b) The
Company shall not be obligated to sell or issue any Option Shares in any manner
in contravention of the Securities Act, the Exchange Act, or any state
securities law. The Board may, at any time, require as a condition to
the exercise of Options that the Option Shares be acquired for investment
purposes only and that the certificate therefor contain a legend restricting
transfer.
12. All
notices hereunder shall be in writing, and (a) if to the Company, shall be
delivered personally to the Secretary of the Company or mailed to its principal
office, addressed to the attention of the Secretary, (b) if to the Grantee,
shall be delivered personally or via courier or mailed via certified mail,
postage prepaid, return receipt requested to the Grantee at the address first
set forth above, or (c) if to any subsequent holder of Options or Option Shares,
to the address specified for such holder in the notice provided for in Section
7
or on the stock records of the Company. Such addresses may be changed
at any time by notice from one party to the other.
13. All
decisions or interpretations made by the Committee with regard to any question
arising hereunder shall be binding and conclusive on the Company and the
Grantee.
14. This
Agreement shall bind and inure to the benefit of the parties hereto and the
successors and assigns of the Company and, to the extent provided in Section
7,
the executors, administrators, legatees, heirs, guardians, legal
representatives, successors, and assigns of the Grantee.
15. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware, without giving effect to rules governing the conflict of
laws.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
NATIONAL
PATENT DEVELOPMENT
CORPORATION |
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By:
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/s/ XXXX X. XXXXXXX | |
Title : Vice President | |||
/s/ XXX X. XXXXXXX | |||
Xxx Xxxxxxx |
4
EXHIBIT
A
2003
INCENTIVE STOCK PLAN
EXHIBIT
B
EXERCISE
NOTICE
The
undersigned, pursuant to the
foregoing Option Agreement (terms used herein have the meanings as defined
in
the Option Agreement), hereby elects to exercise Options for ____________ shares
of Common Stock (the “Shares”) at an exercise price of $____ per share, and
herewith (or as otherwise provided in the Option Agreement) makes payment in
full therefor pursuant to such Option Agreement.
1. If
the sale of the Shares and the resale thereof has not, prior to the date hereof,
been registered pursuant to a registration statement filed and declared
effective under the Securities Act of 1933, as amended (the “Act”), the
undersigned hereby agrees, represents, and warrants that:
(a) I
am acquiring the Shares for my own account (and not for the account of others)
for investment and not with a view to the distribution or resale
thereof;
(b) By
virtue of my position, I have access to the same kind of information which
would
be available in a registration statement filed under the Act;
(c) I
am a sophisticated investor;
(d) I
understand that I may not sell or otherwise dispose of such shares in the
absence of either a registration statement under the Act or an exemption from
the registration provisions of the Act; and
(e) The
certificates representing such shares may contain a legend to the effect of
(d)
above.
2. If
the sale of the Shares and the resale thereof has been registered under the
Act,
the undersigned hereby represents and warrants that I have received the
applicable prospectus and all subsequent reports incorporated therein by
reference.
Very truly yours, | ||
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(type name under signature line) |
Dated: _________________________