EXHIBIT 10.1
STOCK OPTION AGREEMENT
This Stock Option Agreement is made as of April 20, 2004 by and between
Spectrum Sciences & Software Holdings Corp. (the "Corporation") and Xxxxxx
Xxxxxxxx (the "Optionee").
RECITALS
A. Optionee is a consultant of the Corporation. In consideration of
Optionee's serving as such, the Corporation's board of directors has agreed to
grant stock options to the Optionee to purchase shares of the Corporation's
common stock (the "Shares"). The stock options granted herein are not
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended.
NOW THEREFORE, specifically incorporating these recitals herein, it is agreed as
follows:
AGREEMENT
SECTION 1
GRANT OF OPTIONS
1.1 NUMBER OF SHARES. Subject to the terms and conditions of this
Agreement, the Corporation grants to Optionee, Options to purchase from the
Corporation five million (5,000,000) shares (the "Option Shares").
1.2 EXERCISE PRICE. Each Option Share is exercisable, upon vesting, at the
lesser price of $1.65 or the fair market value of the shares at the time of
exercise (the "Option Price").
1.3 TERM. The Expiration Date for all Options shall be April 20, 2005.
1.4 VESTING. The Option Shares shall vest on issuance. The options are
further subject to any applicable regulatory requirements.
1.5 CONDITIONS OF OPTION. The Options may be exercised immediately upon
vesting, subject to the terms and conditions as set forth in this Agreement.
SECTION 2
EXERCISE OF OPTION
2.1 DATE EXERCISABLE. The Options shall become exercisable by Optionee in
accordance with Section 1.4 above.
2.2 MANNER OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK. The Options
may be exercised by the Optionee, in whole or in part, by giving written notice
to the Secretary of the Corporation, setting forth the number of Shares with
respect to which Options are being exercised. The purchase price of the Option
Shares upon exercise of the Options by the Optionee shall be paid in full in
cash, or as otherwise permitted by the Company's stock option plan.
2.3 LIMITATION ON CONVERSION. The exercise rights of Optionee shall be
limited such that, unless Optionee gives written notice 75 days in advance to
the Corporation of Optionee's intention to exceed the Limitation on Conversion
as defined herein, with respect to all or a specified amount of the Option and
the corresponding number of the underlying shares, in no instance shall Optionee
(singularly, together with any Persons who in the determination of the Optionee,
together with the Optionee, constitute a group as defined in Rule 13d-5 of the
Exchange Act) be entitled to exercise the Option to the extent such exercise
would result in Optionee beneficially owning more than five percent (5%) of the
outstanding shares of common stock of the Corporation. For these purposes,
beneficial ownership shall be defined and calculated in accordance with Rule
13d-3, promulgated under the Exchange Act (the foregoing being herein referred
to as the "Limitation on Conversion").
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2.4 STOCK CERTIFICATES. Promptly after any exercise in whole or in part of
the Options by Optionee, the Corporation shall deliver to Optionee a certificate
or certificates for the number of Shares with respect to which the Options were
so exercised, registered in Optionee's name.
SECTION 3
NONTRANSFERABILITY
3.1 RESTRICTION. The Options are not transferable by Optionee.
SECTION 4
NO RIGHTS AS SHAREHOLDER PRIOR TO EXERCISE
4.1 Optionee shall not be deemed for any purpose to be a shareholder of
Corporation with respect to any shares subject to the Options under this
Agreement to which the Options shall not have been exercised.
SECTION 5
ADJUSTMENTS
5.1 NO EFFECT ON CHANGES IN CORPORATION'S CAPITAL STRUCTURE. The existence
of the Options shall not affect in any way the right or power of the Corporation
or its shareholders to make or authorize any adjustments, recapitalization,
reorganization, or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or preference stocks ahead of or affecting the
Option Shares, or the dissolution or liquidation of the Corporation, or any sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
5.2 ADJUSTMENT TO OPTION SHARES. The Option Shares are subject to
adjustment upon recapitalization, reclassification, consolidation, merger,
reorganization, stock dividend, reverse or forward stock split and the like. If
the Corporation shall be reorganized, consolidated or merged with another
corporation, Optionee shall be entitled to receive upon the exercise of the
Option the same number and kind of shares of stock or the same amount of
property, cash or securities as Optionee would have been entitled to receive
upon the happening of any such corporate event as if Optionee had been,
immediately prior to such event, the holder of the number of Shares covered by
the Option.
SECTION 6
TERMINATION OF CONSULTANT
6.1 If Optionee voluntarily terminates its status as consultant, all
non-vested options received by Optionee hereunder will become immediately void
and of no further effect. Further, Optionee may thereafter have 90 days to
exercise all vested options following which time all such non-exercised options
shall become void and of no further effect. If the Optionee is terminated as
consultant by the Corporation, or if Optionee dies while serving as a
consultant, all options received by Optionee shall become immediately void and
of no further effect.
SECTION 7
MISCELLANEOUS PROVISIONS
7.1 DISPUTES. Any dispute or disagreement that may arise under or as a
result of this Agreement, or any question as to the interpretation of this
Agreement, may be determined by the Corporation's Board of Directors in its
absolute and uncontrolled discretion, and any such determination shall be final,
binding, and conclusive on all affected persons.
7.2 NOTICES. Any notice that a party may be required or permitted to give
to the other shall be in writing, and may be delivered personally, by overnight
courier or by certified or registered mail, postage prepaid, addressed to the
parties at their current principal addresses, or such other address as either
party, by notice to the other, may designate in writing from time to time.
7.3 LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
7.4 TITLES AND CAPTIONS. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
7.5 ENTIRE AGREEMENT. This Agreement contains the entire understanding
between the parties and supersedes any prior understandings and agreements
between them respecting the subject matter of this Agreement.
7.6 AGREEMENT BINDING. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
7.7 PRONOUNS AND PLURALS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or persons may require.
7.8 FURTHER ACTION. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
7.9 PARTIES IN INTEREST. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
7.10 SAVINGS CLAUSE. If any provision of this Agreement, or the application
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
SPECTRUM SCIENCES &
SOFTWARE HOLDINGS CORP.
/s/ Xxxxxxx X. Xxx, Xx.
By: --------------------------------
Name: Xxxxxxx X. Xxx, Xx.
Title: Executive Vice President
The undersigned Optionee hereby acknowledges receipt of an executed original of
this Stock Option Agreement, accepts the Options granted thereunder, and agrees
to the terms and conditions thereof.
OPTIONEE
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
SPECTRUM SCIENCES AND SOFTWARE HOLDINGS CORP.
NOTICE OF EXERCISE OF STOCK OPTION
The undersigned hereby exercises the Stock Options granted by Spectrum Sciences
& Software Holdings Corp. and seeks to purchase ____________________ shares of
Common Stock of the Corporation pursuant to said Options. The undersigned
understands that this exercise is subject to all the terms and provisions of the
Stock Option Agreement dated as of April 20, 2004.
(Check Applicable Box)
Enclosed is a check in the sum of US $_____________________ as payment for
such shares.
-or-
Please convert US $_____________________ of debt as payment for such
shares.
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Signature of Optionee
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Date:
