EXHIBIT 10.20
EVCI CAREER COLLEGES INCORPORATED
STOCK OPTION AGREEMENT
(Non-Qualified Stock Option)
THIS AGREEMENT, made as of January 1, 2004, by EVCI CAREER COLLEGES
INCORPORATED, a Delaware Corporation (the "Company"), with XXXXXX X. XXXXXXX
(the "Holder"):
The Company has adopted the EVCI Career Colleges Incorporated 1998
Amended and Restated Incentive Plan (the "Plan"). However, there are no shares
available for grant under the Plan. As an incentive for the Holder to enter into
an employment agreement (the "Employment Agreement") with the Company, the Board
authorized the grant of options to the Holder that are not covered by the Plan.
However, the terms of such options, to the extent not expressly governed by this
Agreement shall be the same as if granted under the Plan, except that, if there
is any inconsistency between such Plan terms and this Agreement, this Agreement
shall govern. Subject to the foregoing, the Plan, as it currently exists, is
incorporated herein by reference and made part of this Agreement. Capitalized
terms in this Agreement shall have the same meaning as in the Plan unless the
context requires otherwise. References to the Plan mean as it currently exists.
NOW, THEREFORE, , the Company hereby grants to the Holder, as of the
date hereof, the Option to purchase all or any part of 90,000 shares (the
"Shares") of Common Stock of the Company, par value $.0001 per share (the
"Common Stock"), at a price per share of $4.70 (the "Exercise Price"), which
price is 100% of the Fair Market Value of a share of Common Stock on December
23, 2004. The Option shall also be subject to the following terms and
conditions:
1. a. The Option shall continue in force through December 31, 2008 (the
"Expiration Date"), unless sooner terminated as provided herein or in the Plan.
The Option shall vest and to become exercisable, on a cumulative basis, as to
45,000 Shares on December 31, 2004 and 45,000 Shares on December 31, 2005.
However, the Option shall become fully vested and exercisable on a Change of
Control Date.
b. The Option is designated as a stock option that does not qualify
as an incentive stock option pursuant to the Internal Revenue Code of 1996, as
amended (the "Code").
2. In the event that the relationship of the Holder to the Company and
its Related Entities (as defined below) is terminated prior to the Expiration
Date (otherwise than by reason of death or disability), the Option may be
exercised (to the extent that the Holder was entitled to do so at the
termination of this relationship with the Company and its Related Entities) at
any time within 90 days after such termination, but not after the Expiration
Date, provided, however, that if such termination shall have been for cause or
voluntarily by the Holder and without the consent of the Company or any Related
Entity, as the case may be, the Option and all rights of the Holder hereunder,
to the extent not theretofore exercised, shall forthwith terminate immediately
upon such termination. In its sole and absolute discretion, the Board may extend
such 90-day time period and amend this Agreement accordingly.
3. If the Holder shall (a) die within 90 days after the termination of
the Holder's relationship with the Company (other than termination for cause, or
voluntarily on the Holder's part and without the consent of the Company or a
Related Entity, as the case may be, which consent shall be presumed in the case
of normal retirement), or (b) become permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code while serving as an employee, director
or consultant to the Company, and if the Option was otherwise exercisable,
immediately prior to the occurrence of such event, then such Option may be
exercised as set forth herein by the Holder or by the person or persons to whom
the Holder's rights under the Option pass by will or applicable law, or if no
such person has such right, by such person's executors or administrators, at any
time within six months after the date of death of the original Holder, or six
months after the date of permanent or total disability, but in either case, not
earlier than the date provided in the immediately preceding paragraph or later
than the Expiration Date.
4. a. The Holder may exercise the Option with respect to any number of
whole shares less than the full number of shares subject to the Option but not
for less than 100 shares. The Holder may exercise the Option by giving the
Company written notice in the form annexed, as provided in paragraph 10 hereof,
of such exercise. Such notice shall specify the number of shares as to which the
Option is being exercised and shall be accompanied by payment in full by means
of one or a combination of the following: (i) in cash, of an amount equal to the
Exercise Price multiplied by the number of shares as to which the Option is
being exercised (the "Purchase Price"); or (ii) if permitted by the Board, by
surrender to the Company of a number of shares of Common Stock, or by allowing
the Company to deduct a number of shares from the shares of Common Stock
deliverable to the Holder upon exercise of the Option, having a Fair Market
Value, as determined by the Board on the date of exercise pursuant to the Plan,
equal to the Purchase Price.
b. Prior to or concurrently with delivery by the Company to the
Holder of a certificate(s) representing such shares, the Holder shall, upon
notification of the amount due, pay promptly any amount necessary to satisfy
applicable federal, state or local tax requirements. In the event such amount is
not paid promptly, the Company shall have the right to apply from the Purchase
Price paid any taxes required by law to be withheld by the Company with respect
to such payment and the number of shares to be issued by the Company will be
reduced accordingly.
5. Notwithstanding any other provision of this Agreement or the Plan,
in the event of a change in the outstanding Common Stock of the Company by
reason of a stock dividend, split-up, split-down, reverse split,
recapitalization, merger, consolidation, combination or exchange of shares,
spin-off, reorganization, liquidation or the like, then the aggregate number of
shares subject to the Option and the Exercise Price shall be appropriately
adjusted by the Board as the Board shall determine to be equitably required, its
determination to be final and conclusive.
6. The Option shall, during the Holder's lifetime, be exercisable only
by the Holder, and neither the Option nor any right hereunder shall be
transferable by the Holder, by operation of law or otherwise, except by will or
the laws of descent and distribution. In the event of any attempt by the Holder
to transfer, assign, pledge, hypothecate or otherwise dispose of this Option or
of any right hereunder, except as provided for herein, or in the event of the
levy or any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the Holder
and it shall thereupon become null and void.
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7. Neither the Holder nor, in the event of the Holder's death, any
person entitled to exercise the Holder's rights, shall have any of the rights of
a stockholder with respect to the shares subject to the Option until share
certificates have been issued and registered in the name of the Holder or the
Holder's estate, as the case may be.
8. Nothing in this Agreement shall confer upon the Holder any right to
continue in the employ or service of the Company or any entity that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Company (a "Related Entity") or in any way
affect any right and power of the Company or a Related Entity to terminate the
employment or service of any individual at any time with or without assigning a
reason therefor.
9. Except as provided in the introduction to this Agreement, the Option
is subject to, and the Company the Holder agree to be bound by, all of the terms
and conditions of the Plan. A copy of the Plan in its present form is available
for inspection during business hours by the Holder or other persons entitled to
exercise the Option at the Company's principal executive offices.
10. Any notice to the Company provided for in this Agreement shall be
addressed to the Company in care of its Chief Financial Officer, at its
principal executive offices, and any notice to the Holder shall be addressed to
the Holder at the Holder's address now on file with the Company, or to such
other address as either may last have designated to the other by notice as
provided herein. Any notice so addressed shall be deemed to be given, upon
receipt, if delivered by hand, receipt acknowledged, or on the second business
day after mailing, by registered or certified mail, at a post office or branch
post office within the United States.
11. In the event that any question or controversy shall arise with
respect to the nature, scope or extent of any one or more rights conferred by
the Option, the determination by the Administrator of the rights of the Holder
shall be conclusive, final and binding upon the Holder and upon any other person
who shall assert any right pursuant to the Option.
EVCI CAREER COLLEGES INCORPORATED
By: /s/ Xx. Xxxx X. XxXxxxx
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Name: Xx. Xxxx X. XxXxxxx
Title: Chief Executive Officer and President
ACCEPTED AND AGREED:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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FORM OF NOTICE OF EXERCISE
TO: EVCI CAREER COLLEGES INCORPORATED
At its principal executive offices
The undersigned hereby exercises the Holder's option to purchase _____
shares of Common Stock (the "Shares") of EVCI Career Colleges Incorporated
("EVCI"), as provided in the Stock Option Agreement made as of January 1, 2004,
at $ per share, for a total of $__________, and makes payment therefor as
follows:
(a) If permitted by EVCI's Board of Directors, to the extent of
$__________ of the purchase price, the undersigned hereby surrenders to EVCI
certificates for shares of its Common Stock, which, valued at $__________ per
share, the fair market value thereof equals such portion of the purchase price.
(b) If permitted by EVCI's Board of Directors, to the extent of
$__________ of the purchase price, the undersigned hereby allows EVCI to deduct
from the number of Shares deliverable pursuant to this exercise a number of such
Shares which, valued at $__________ per share, the fair market value thereof
equals such portion of the purchase price.
(c) To the extent of the balance of the purchase price, the undersigned
has enclosed a certified or bank check payable to the order of EVCI for
$__________.
A stock certificate or certificates for the Shares should be delivered
in person or mailed to the undersigned at the address shown below.
The undersigned acknowledges that: unless notified otherwise in writing
by EVCI, (i) the Shares have not been registered under the Securities Act of
1933 ("Securities Act") or any State securities laws ("State Laws") and,
therefore, cannot be sold or otherwise disposed of unless they are subsequently
registered under the Securities Act and applicable State Laws or, in the opinion
of counsel to EVCI, an exemption from registration is available; (ii) the
undersigned will have no right to require that the Shares be registered under
the Securities Act or any State Laws; and (iii) the certificate evidencing the
Shares will bear legends covering the restrictions described above.
Signature:
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Address:
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Dated:
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