EXHIBIT 3.1
FORM OF
STOCK OPTION AGREEMENT
AGREEMENT made as of this ___ day of __________ 2002 (the "Date of
Grant") between EVTC, Inc., a Delaware corporation having an address at 00000
Xxxxxxx Xxxx, Xxxxxxx, XX 00000 (hereinafter referred to as the "Company"), and
_______________________, an individual with an address at
____________________________________ (hereinafter referred to as the
"Optionee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Optionee are parties to that certain
Securities Purchase Agreement dated as of March 26, 2002 and amended May 10,
2002 (as amended, the "Purchase Agreement") whereby in partial consideration for
the purchase of all of the outstanding ownership interest held by the Optionee
as a member of Innovative Waste Technologies, LLC ("IWT"), the Company agreed to
grant to the Optionee options to purchase up to an aggregate of _________ shares
of the common stock, par value $.01 per share, of the Company (the "Common
Stock"), subject to the subsequent adoption by the Company's shareholders of an
amendment to the Company's articles of incorporation providing for sufficient
additional shares to be authorized (the "Share Amendment").
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Optionee hereby agree as follows:
1. Confirmation of Grant of Option. Subject to the effective date of
the Share Amendment and the terms of this Agreement, the Company hereby grants
to the Optionee the right to purchase (hereinafter referred to as the "Option")
an aggregate of _________ shares of Common Stock, subject to adjustment as
provided herein (such shares hereinafter being referred to as the "Shares"). The
Option is not intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), and accordingly,
the Optionee is urged to consult with its individual tax advisor prior to
exercising the Option since the exercise of the Option may result in adverse tax
consequences including the payment of additional federal and/or state income
taxes.
2. Purchase Price. The purchase price of shares of Common Stock
covered by the Option will be $.25 per share.
3. Exercise of Option. Subject to all of the terms and conditions of
this Agreement, the right to purchase shares under the Option shall vest as to
all Shares as of the Date of Grant. The Option may be exercised pursuant to the
provisions of this Section 3, by notice and payment to the Company as provided
in Sections 7 and 12 hereof.
4. Term of Option. Subject to earlier termination or cancellation as
provided in this Agreement, this Option, to the extent unexercised, shall expire
on the day immediately prior to the fifth (5th) year anniversary of the Date of
Grant. The holder of the Option shall not have any rights to dividends or any
other rights of a stockholder with respect to any shares of Common Stock subject
to the Option until such shares shall have been issued to him (as
evidenced by the appropriate entry on the books of the Company or a duly
authorized transfer agent of the Company) provided that the date of issuance
shall not be earlier than the date this Option is exercised and payment of the
full purchase price of the shares of Common Stock (with respect to which this
Option is exercised) is made to the Company.
5. Transferability of Option. At the time of issuance, the Option
shall not have been registered under the Securities Act of 1933, as amended.
During the term of the Option, the Option may be assigned, transferred or
otherwise disposed of, or pledged or hypothecated in any way, only if the
conditions of Section 9(a) hereof have been satisfied.
6. Registration. At the time of issuance, the shares of Common Stock
subject hereto and issuable upon the exercise hereof may not be registered under
the Securities Act of 1933, as amended, and, if required upon the request of
counsel to the Company, the Optionee will give a representation as to his
investment intent with respect to such shares prior to their issuance as set
forth in Section 7 hereof. The Company may register or qualify the shares
covered by the Option for sale pursuant to the Securities Act of 1933, as
amended, at any time prior to or after the exercise in whole or in part of the
Option.
7. Method of Exercise of Option.
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(a) Subject to the terms and conditions of this Agreement, the
Option shall be exercisable by notice in the manner set forth in Exhibit A
hereto (the "Notice") and provision for payment to the Company in accordance
with the procedure prescribed herein. Each such Notice shall:
(i) state the election to exercise the Option and the number of Shares
with respect to which it is being exercised;
(ii) contain a representation and agreement as to investment intent,
if required by counsel to the Company with respect to such Shares, in
a form satisfactory to counsel to the Company;
(iii) be signed by the Optionee or the person or persons entitled to
exercise the Option and, if the Option is being exercised by any
person or persons other than the Optionee, be accompanied by proof,
satisfactory to counsel to the Company, of the right of such other
person or persons to exercise the Option;
(iv) include payment of the full purchase price for the shares of
Common Stock to be purchased pursuant to such exercise of the Option;
and
(v) be received by the Company on or before the date of the expiration
of this Option. In the event the date of expiration of this Option
falls on a day which is not a regular business day at the Company's
executive office, then such written Notice must be received at such
office on or before the last regular business day prior to such date
of expiration.
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(b) Payment of the purchase price of any shares of Common Stock,
in respect of which the Option shall be exercised, shall be made by the Optionee
or such person or persons at the place specified by the Company on the date the
Notice is received by the Company (i) by delivering to the Company a certified
or bank cashier's check payable to the order of the Company or (ii) if consented
to by the Company in writing, by delivering to the Company properly endorsed
certificates of shares of Common Stock (or certificates accompanied by an
appropriate stock power) with signature guaranties by a bank or trust company,
or (iii) if consented to by the Company in writing, by a concurrent sale of a
portion of the shares of Common Stock to be acquired upon the exercise of this
Option to the extent permitted upon delivery by the Optionee of a properly
executed notice, together with a copy of the Optionee's irrevocable instructions
to a broker acceptable to the Company to sell all or a portion of such shares of
Common Stock and deliver promptly to the Company the amount of sale or loan
proceeds sufficient to pay such exercise price; provided, that, in connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms, or (iv) by any combination of the foregoing. For
purposes of the immediately preceding sentence, an exercise effected by the
tender of Common Stock (or deemed to be effected by the tender of Common Stock)
may only be consummated with Common Stock held by the Optionee for a period of
six (6) months.
(c) The Option shall be deemed to have been exercised with
respect to any particular shares of Common Stock if, and only if, the preceding
provisions of this Section 7 and the provisions of Section 8 hereof shall have
been complied with, in which event the Option shall be deemed to have been
exercised on the date the Notice and related payment were received by the
Company. Anything in this Agreement to the contrary notwithstanding, any Notice
given pursuant to the provisions of this Section 7 shall be void and of no
effect if all of the preceding provisions of this Section 7 and the provisions
of Section 8 shall not have been complied with.
(d) The certificate or certificates for shares of Common Stock as
to which the Option shall be exercised will be registered in the name of the
Optionee (or in the name of the Optionee's estate or other beneficiary if the
Option is exercised after the Optionee's death), or if the Option is exercised
by the Optionee and if the Optionee so requests in the notice exercising the
Option, will be registered in the name of the Optionee and another person
jointly, with right of survivorship and will be delivered as soon as practical
after the date the Notice is received by the Company (accompanied by full
payment of the exercise price), but only upon compliance with all of the
provisions of this Agreement.
(e) If the Optionee fails to accept delivery of and pay for all
or any part of the number of Shares specified in such Notice, his right to
exercise the Option with respect to such undelivered Shares may be terminated in
the sole discretion of the Committee. The Option may be exercised only with
respect to full Shares.
(f) In the event, at any time and from time to time, of any
merger or consolidation in which the Company shall be a constituent party and in
which the previously outstanding shares of Common Stock of the Company shall be
changed into or exchanged for different securities of the Company or changed
into or exchanged for common stock or other securities of another corporation or
other properly (including cash) or any combination of the
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foregoing (a "Transaction"), then the Optionee, upon exercise of the Option at
any time after the consummation of such Transaction, shall be entitled to
receive, in lieu of the shares of Common Stock issuable upon such exercise prior
to such consummation, the stock and other securities, cash and property to which
such Optionee would have been entitled upon the consummation of such Transaction
if such holder had exercised such Option immediately prior thereof (subject
thereafter to further adjustments from and after the dates of the consummation
of such Transaction to correspond as nearly as possible to other adjustments
provided for herein).
8. Approval of Counsel. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Company's counsel of all legal matters in connection therewith,
including, but not limited to, compliance with the requirements of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, and the requirements of any
stock exchange or automated trading medium upon which the Common Stock may then
be listed or traded.
9. Unregistered Securities / Legend.
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(a) If so requested by the Company, upon any sale or transfer of
the Option or the Common Stock purchased upon exercise of the Option (subject to
the provisions of Section 9(c) hereof), the Optionee shall deliver to the
Company an opinion of counsel satisfactory to the Company to the effect that
either (i) the Option or the Common Stock to be sold or transferred has been
registered under the Securities Act of 1933, as amended, and that there is in
effect a current prospectus meeting the requirements of Section 10(a) of said
Act which is being or will be delivered to the purchaser or transferee at or
prior to the time of delivery of the Option or the certificates evidencing the
Common Stock to be sold or transferred, or (ii) such Option or Common Stock may
then be sold pursuant to an exemption from registration requirements or
otherwise without violating Section 5 of said Act.
(b) The Common Stock issued upon exercise of the Option shall
bear the following (or similar) legend if required by counsel for the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF UNLESS (i) REGISTERED UNDER SECURITIES ACT AND
UNDER APPLICABLE STATE SECURITIES LAWS OR (ii) EVTC, INC., A
DELAWARE CORPORATION (THE "COMPANY"), SHALL HAVE RECEIVED A
LEGAL OPINION, IN FORM, SCOPE AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY AND ITS COUNSEL, THAT REGISTRATION
OF SUCH SHARES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
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(c) The Optionee hereby agrees that, if so requested by the
Company or any representatives of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, the Optionee shall not sell or otherwise
transfer any shares of Common Stock or other securities of the Company during
the six (6) month period (or such longer or shorter period as may be requested
in writing by the Managing Underwriter and agreed to in writing by the Company)
(the "Market Standoff Period") following the effective date of a registration
statement of the Company filed under the Securities Act. Such registration shall
apply only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf
of the Company to the public in an underwritten public offering under the
Securities Act. The Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such Market
Standoff Period.
10. Reservation of Shares. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of this Agreement.
11. Limitation of Action. The Optionee and the Company each
acknowledges that every right of action accruing to him or it, as the case may
be, and arising out of or in connection with this Agreement against the Company
or a Parent or Subsidiary, on the one hand, or against the Optionee, on the
other hand, shall, irrespective of the place where an action may be brought,
cease and be barred by the expiration of three years from the date of the act or
omission in respect of which such right of action arises.
12. Notices. Each notice relating to this Agreement shall be in
writing and delivered in person, by recognized overnight courier or by certified
mail to the proper address. All notices to the Company or the Committee shall be
addressed to them at EVTC, Inc., 00000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000 (Attn:
Chief Executive Officer), or to such other address as may be designated for such
purpose by the Company from time to time by notice given in the manner herein
provided. All notices to the Optionee shall be addressed to the Optionee or such
other person or persons at the Optionee's address above specified. Anyone to
whom a notice may be given under this Agreement may designate a new address by
notice to that effect.
13. Benefits of Agreement. This Agreement shall inure to the benefit
of the Company, the Optionee and their respective heirs, executors,
administrators, personal representatives, successors and permitted assignees.
14. Severability. In the event that any one or more provisions of this
Agreement shall be deemed to be illegal or unenforceable, such illegality or
unenforceability shall not affect the validity and enforceability of the
remaining legal and enforceable provisions hereof, which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.
15. Governing Law. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
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16. Disposition of Shares. By accepting this Agreement, the Optionee
agrees that in the event he shall dispose (whether by sale, exchange, gift or
any like transfer) of any shares of Common Stock of the Company (to the extent
such shares are deemed to have been purchased pursuant to this Option) acquired
by him pursuant hereto within two years of the Date of Grant of this Option or
within one year after the acquisition of such shares pursuant hereto, he will
notify the President of the Company no later than 15 days from the date of such
disposition of such date or dates and the number of shares disposed of by him
and the consideration received, if any, and, upon notification from the Company,
promptly forward to the Company (to the attention of its President) any amount
requested by the Company for the purpose of satisfying its liability, if any, to
withhold federal, state or local income or earnings tax or any other applicable
tax or assessment (plus interest or penalties thereon, if any, caused by any
delay in making such payment) incurred by reason of such disposition.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Date of Grant set forth above.
EVTC, Inc.
By:
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Name:
Title:
OPTIONEE:
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[NAME]
Address:
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Social Security No.
7
EXHIBIT A
OPTION EXERCISE FORM
[DATE]
EVTC, Inc.
00000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: _____________
Dear Sirs:
Pursuant to the provisions of the Stock Option Agreement dated
______________ _____, 2002 (the "Agreement"), whereby EVTC, Inc. (the "Company")
granted to the undersigned an option (the "Option") to purchase up to 7,500,000
shares of the Company's common stock, $.01 par value (the "Option Shares")
subject to the terms of the Agreement, the undersigned hereby notifies you that
the undersigned elects to exercise its option to purchase _________of the shares
covered by such Option, at the $0.25 per share price specified therein.
In full payment of the price for the shares being purchased hereby, the
undersigned is delivering to you herewith (i) certified or bank cashier's check
payable to the order of the Company in the amount of $____________, or (ii) a
certificate or certificates for [ ] shares of Common Stock of the Company, and
which have a fair market value as of the date hereof of $___________, [and a
certified or bank cashier's check, payable to the order of the Company, in the
amount of $________________]. Any such stock certificate or certificates are
endorsed, or accompanied by an appropriate stock power, to the order of the
Company, with my signature guaranteed by a bank or trust company or by a member
firm of the New York Stock Exchange.
In deciding to exercise the Option and acquire the Option Shares, the
undersigned makes the following representations, warranties and statements to
the Company:
o The undersigned is relying solely upon its independent investigation
and due diligence regarding the Company and an investment in the Option
Shares; it being acknowledged by the undersigned that it has had an
opportunity (i) to review copies of all forms, reports and documents filed
with the Securities and Exchange Commission by the Company and (ii) to
consult with its own attorney and tax advisor regarding legal matters
concerning an investment in the Option Shares and the tax consequences of
acquiring the Option Shares, respectively. The undersigned is not relying
upon any representations or warranties made by or on behalf of the Company;
o The undersigned understands that the Option Shares are being offered
and sold to it in reliance on the exemption from registration under the
Securities Act of 1933, as amended (the "Act"), by virtue of Section 4(2)
promulgated under the Act, and that the Company is relying upon the truth
and accuracy of the undersigned's representations,
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warranties, acknowledgments and understandings set forth herein for
purposes of qualifying for exemptions from registration under the Act and
applicable state securities laws. The undersigned is aware of what
constitutes, and fully understand the definition of, an "Accredited
Investor" (as that term is defined in Regulation D promulgated under the
Act) and represent that the undersigned is an "Accredited Investor" for
purposes of Regulation D;
o The undersigned further understands that (i) the Option Shares have
not been registered under the Act; (ii) the Company is under no obligation
to register the Option Shares under the Act or any applicable state
security laws or to take any action to make any exemption form such
registration provisions available; (iii) the Option Shares may not be sold,
transferred, assigned, pledged or subjected to any lien or security
interest unless they are first registered under the Act and applicable
state securities laws or an exemption from the registration provisions of
the Act and applicable state securities laws are available with respect to
the proposed sale or transfer; (iv) the certificates evidencing the Option
Shares shall contain a restrictive legend, in form and substance reasonably
satisfactory to the Company's legal counsel, to the effect that the
transfer thereof is restricted; and (v) stop transfer instructions will be
placed with the transfer agent for the Option Shares; and
o The undersigned acknowledges that its investment in the Option
Shares is speculative and involves the risk of loss, including the loss of
the entire value of the investment and, because there are substantial
restrictions on the transferability of the Option Shares, the potential
inability to liquidate the Option Shares readily in case of an emergency.
The undersigned is able to bear the economic risks and hold the Option
Shares for an indefinite period of time. The undersigned is acquiring the
Option Shares for its own account, and not with a view to any resale or
distribution of the Option Shares, in whole or in part, in violation of the
Act or any applicable securities laws.
Very truly yours,
[NAME]
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Name:
Title:
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(Address for notices, reports,
dividend checks and other
communications to stockholders.)
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