SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT Between TRULITE, INC. and ERIC J. LADD dated as of March 28, 2006
Exhibit
10.39
SECOND
AMENDED AND RESTATED
Between
TRULITE,
INC.
and
XXXX
X.
XXXX
dated
as
of March 28, 2006
AMENDED
AND RESTATED
This
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this
“Agreement”) is made effective as of the 26th
day of
March, 2006 by and between Trulite, Inc., a Delaware corporation (the
“Company”), and Xxxx X. Xxxx (“Employee”).
W
I T
N E S S E T H:
WHEREAS,
Employee entered into that certain Employment Agreement, dated as of July 28,
2004, with the Company (the “Original Agreement”), and agreed to serve as an
employee of the Company according to the terms of the Original Agreement;
and
WHEREAS,
Employee entered into that certain Amended and Restated Employment Agreement
dated February 4, 2005, with the Company (the “Second Agreement”);
and
WHEREAS,
Employee and
the
Company now wish to further amend the Second Agreement to set forth the terms
under which employee shall be employed on a full-time basis by the Company
rather than one-half time, along with other amendments as set forth herein
below, and to restate in their entirety the terms of employee’s employment by
the Company.
NOW,
THEREFORE, in consideration of the continued employment of employee by the
Company and the payment of salary and other compensation to employee by the
Company, the parties hereto agree as follows:
1.
Employment.
The
Company hereby agrees to continue to employ employee, and employee hereby agrees
to continue to serve the Company, on the terms and conditions set forth
herein.
2.
Term.
Employee shall continue to be employed by the Company as provided in Section
1
and such employment shall continue until January 31, 2007,
unless sooner terminated as herein provided and Employment
is terminable for any reason whatsoever by either the Company or employee upon
thirty (30) days prior written notice to the other party, except that the
Company may terminate this Agreement immediately for Cause, as defined herein
below.
3.
Position
and Duties.
(a)
The
Company agrees to continue to employ employee in the capacity of Controls and
Systems Engineer and employee agrees to continue to be so employed, in such
capacity and having such duties and responsibilities which include, but not
be
limited, to the following:
| · |
Kitty
hawk III and IV controlled design, documentation and
fabrication
|
| · |
Kitty
hawk III and IV Software design, documentation and
programming.
|
| · |
Electrical
Engineering for the Kitty hawk III and IV product
lines
|
| · |
Electrical
Engineering Training and
documentation.
|
as
are
assigned to employee from time to time by the Company’s Board of Directors or
such officer of the Company that the Board of Directors designates as
employee’s supervisor.
(b)
Employee agrees to devote all of his full business time and attention to the
business and affairs of the Company and will use his best efforts in performing
faithfully his duties under this Agreement.
(c)
Employee shall use his reasonable best efforts to perform faithfully and
efficiently his duties under this Agreement, and shall not engage in or be
employed by any other business; provided, however, that nothing contained herein
shall prohibit employee from (i) serving as a member of the board of directors,
board of trustees or the like of any for-profit entity that does not compete
with the Company, or performing services of any type for any civic or community
entity, whether or not employee receives compensation therefore, (ii) investing
his assets in such form or manner as shall not require any significant services
on his part in the operation of the business of or property in which such
investment is made as long as such business does not compete with the Company,
or (iii) serving in various capacities with, and attending meetings of, industry
or trade groups and associations, as long as employee’s engaging in any
activities permitted by virtue of clauses (i), (ii) and (iii) above does not
materially interfere with the ability of employee to perform the services and
discharge the responsibilities required of him under this
Agreement.
4.
Compensation
and Related Matters.
(a)
Salary.
During
the term of this Agreement, the Company shall pay to employee an annual salary
of $80,000 in substantially equal installments in accordance with the Company’s
payroll policies.
(b)
Option.
Subject
to the approval of the Company’s Board of Directors or its Compensation
Committee, you will be granted an option to purchase 174,826 shares of the
Company’s common stock. The exercise price per share will be equal to the fair
market value per share on the date the option is granted. The option will be
subject to the terms and conditions applicable to options granted under the
Company’s Stock Option Plan (the “Plan”), as described in the Plan and the
applicable Stock Option Agreement in substantially the form attached hereto
as
Exhibit “A” (the “Option Agreement”). The option shall vest immediately and the
purchased shares will be subject to repurchase by the Company at fair market
value in the event that your service terminates for any reason. The Option
Agreement shall contain such other terms as shall be determined by the Board
of
Directors of the Company.
(c)
Expenses.
During
the term of employee’s employment hereunder, employee shall be entitled to
receive prompt reimbursement for all reasonable and necessary expenses incurred
by employee in performing services hereunder, including all travel and living
expenses while away from home on business or at the request of and in the
service of the Company, cell phone expenses and entertainment expenses incurred
by employee at the request of and in the service of the Company, provided that
such expenses are incurred and accounted for in accordance with the policies
and
procedures established by the Company, as may be amended from time to
time.
(d)
Benefits.
Employee shall be entitled to participate in or receive benefits under any
group
health or other employee benefit plan or arrangement made available by the
Company to its other similarly situated employees who perform the same or
similar duties as employee
in the same location, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and
arrangements.
(e)
Sick
Leave.
Employee shall be entitled to sick and emergency leave in accordance with the
regular policies and procedures established by the Company. Any additional
sick
or emergency leave over and above paid leave provided by the Company, if any,
shall be unpaid and shall be granted at the sole discretion of the Board of
Directors of the Company.
(f)
Vacations.
Employee shall be excused from rendering his services during reasonable vacation
periods for 10 business days per year plus any additional vacation days that
may
be approved by the Chief Executive Officer of the Company or such other officer
of the Company that the Company’s Board of Directors designates as employee’s
supervisor. Employee shall also be entitled to all paid holidays given by the
Company to its employees generally.
5.
Termination.
Employee’s employment hereunder may be terminated under the following
circumstances:
(a)
Termination
of Employment for Cause.
The
Company may terminate the employment of the employee if the employee
engages in any of the following conduct (termination for “Cause”):
(1)
Breaching any material provision of this Agreement;
(2)
Misappropriating funds or property of the Company;
(3)
Securing any personal profit not thoroughly disclosed to and approved by the
Company in connection with any transaction entered into on behalf of the
Company;
(4)
Engaging in conduct, even if not in connection with the performance of his
duties hereunder, which might be reasonably expected to result in any effect
materially adverse to the interests of the Company, such as fraud, dishonesty,
conviction of a felony, or other acts of moral turpitude;
(5)
Failing to fulfill and perform the duties assigned to the employee in accordance
with the terms hereof; or
(6)
Failing to comply with corporate policies of the Company that are promulgated
from time to time by the Company’s Board of Directors.
(b)
Termination
in the Event of Death or Disability.
(1)
The
Employer may terminate this Agreement in the event employee becomes and remains
“Disabled” (as hereinafter defined), either physically, mentally, or otherwise,
for a period of ninety (90) days during any consecutive period. As used herein,
“Disabled” shall mean the continuous inability, whether mental or physical, of
the employee to perform his normal job functions as determined by at least
two
(2) of three medical physicians. For purposes of such determination, the
employee or his designee shall be entitled to appoint one physician, the Company
shall be entitled to appoint one physician, and the two (2) physicians shall
mutually appoint a third physician. Notwithstanding the foregoing, the employee
or his designee and the Company may mutually agree that the employee is Disabled
within the meaning of this Agreement.
(2)
This
Agreement shall immediately terminate upon the death of employee.
(c)
Termination
Without Cause.
Either
party may terminate the employment of employee without Cause at any time upon
written notice to the other party.
6.
Effect
of Termination of Employment.
(a)
Termination
for Cause.
In the
event of termination for Cause, the employee shall be entitled to receive his
compensation, as determined in Section 4 of this Agreement, due or accrued
on a
pro rata basis to the date of termination less the amount of actual damages,
if
any, caused to the Company by such breach of this Agreement.
(b)
Termination
upon death or Disability.
In the
event of termination for death or Disability of the employee, the employee
or
his estate shall be entitled to receive his compensation, as determined in
Section 4 of this Agreement, due or accrued on a pro rata basis to the effective
date of termination.
(c)
Termination
Without Cause.
In the
event the Company terminates employee’s employment without Cause, the Company
shall continue making payments to employee in an amount equal to the
compensation of the employee set forth in Section 4(a) of this Agreement, as
if
he were still employed for six (6) months, which shall constitute the full
and
total amount of liquidated damages that the employee shall be entitled to
receive from the Company and its Affiliates and their officers, directors,
and
employees whether arising out of contract, tort or other claims arising out
of
his employment relationship with the Company.
(d)
Company’s
Right to Repurchase Shares.
In the
event that employee’s employment is terminated by the Company for Cause or by
employee’s voluntary departure, the Company shall have the right to repurchase
all Common Stock owned by employee at fair market value, as defined below.
In
the event that employee’s employment is terminated by the Company without Cause,
the employee shall be entitled to retain the stock he owns. The Company shall
have the right to repurchase any unvested portion of the stock subject to the
Option at fair market value, as defined below. “Fair market value,” for the
purposes of this Section 6, shall be determined by a qualified business
valuation or appraisal expert chosen jointly by the employee and the Company’s
Board of Directors.
7.
Confidentiality,
Non-Solicitation, and Non-Competition.
(a)
Confidential
Information.
Employee acknowledges that (i) upon execution of this Agreement and during
the
term of this Agreement and as a part of his employment with the Company and
any
subsidiaries, whether pursuant to this Agreement or otherwise, employee has
been
and will be afforded access to “Confidential Information” as hereinafter
defined; (ii) public disclosure of such Confidential Information could have
a
material adverse impact on the Company and its business; and (iii) as a result
of his access to such Confidential Information, employee will attain substantial
technical expertise, skill and knowledge with respect to the Company’s business.
Employee acknowledges that the provisions of this Section 7(a) are reasonable
and necessary with respect to the improper use or disclosure of Confidential
Information. As used in this Agreement, “Confidential Information” means any
information, knowledge or data of any nature and in any form (including
information that is electronically transmitted or stored on any form of magnetic
or electronic storage media) relating to the past, current or prospective
business or operations of the Company and its Affiliates, that at the time
or
times concerned is not generally known to persons engaged in businesses similar
to those conducted or contemplated by the Company and its Affiliates (other
than
information known by such persons through a violation of an obligation of
confidentiality to the Company), whether produced by the Company and its
Affiliates or any of their consultants, agents or independent contractors or
by
employee, and whether or not marked confidential, including without limitation
information relating to the Company’s or its Affiliates’ products and services,
business plans, business acquisitions, processes, product or service research
and development methods or techniques, inventions and improvements, training
methods and other operational methods or techniques, quality assurance
procedures or standards, operating procedures, files, plans, specifications,
proposals, drawings, charts, graphs, support data, trade secrets, supplier
lists, supplier information, purchasing methods or practices, distribution
and
selling activities, consultants’ reports, marketing and engineering or other
technical studies, maintenance records, employment or personnel data, marketing
data, strategies or techniques, financial reports, budgets, projections, cost
analyses, price lists and analyses, employee lists, customer lists, customer
source lists, proprietary computer software, and internal notes and memoranda
relating to any of the foregoing.
(b)
Non-Disclosure
of Confidential Information.
In
consideration of the foregoing and of continued employment by the Company and
the compensation and benefits paid or provided and to be paid or provided to
employee by the Company pursuant to this Agreement, employee hereby covenants
and agrees that during the term of this Agreement and for a period of one (1)
year thereafter, employee shall not, without the Company’s prior written consent
or as may be required by law or legal process, disclose, communicate, divulge
or
make available to any person or entity (other than the Company), or use for
any
purpose other than for the exclusive benefit of the Company, any Confidential
Information, whether employee has such information in his memory or embodied
in
writing or other physical form. Upon termination of employee’s employment
hereunder, employee shall deliver promptly to the Company any Confidential
Information in his possession, including any duplicates thereof and any notes
or
other records employee has prepared with respect thereto. In the event that
the
provisions of any applicable law or the order of any court would require
employee to disclose or otherwise make available any Confidential Information
then employee shall give the Company prompt prior written notice of such
required disclosure and an opportunity to contest the requirement of such
disclosure or apply for a protective order with respect to such Confidential
Information by appropriate proceedings. Employee agrees that disclosures made
by
the Company or its affiliates to governmental authorities, to its customers
or
potential customers, to its suppliers or potential suppliers, to its employees
or potential employees, to its consultants or potential consultants or
disclosures made by the Company or its affiliates in any litigation or
administrative or governmental proceedings shall not mean that the matters
so
disclosed are available to the general public. The foregoing, however, shall
not
limit the Company’s authority to determine whether or not any such information
has been so disclosed.
(c)
Protection
of Information.
(1)
The
Company shall disclose to employee, or place employee in a position to have
access to or develop, trade secrets or confidential information of the Company;
and/or shall entrust employee with business opportunities of the Company; and/or
shall place employee in a position to develop business good will on behalf
of
the Company.
(2)
Employee agrees not to disclose or utilize, for employee’s
personal benefit or for the direct or indirect benefit of any other person
or
entity, or for any other reason, whether for consideration or otherwise, during
the term of his employment hereunder or at any time thereafter, any information,
ideas, concepts, improvements, discoveries or inventions, whether patentable
or
not, which are conceived, made, developed, or acquired by employee, individually
or in conjunction with others, during employee’s employment by the Company
(whether during business hours or otherwise and whether on the Company’s
premises or otherwise) which relate to the business, products, or services
of
the Company (including, without limitation, all such business ideas, prospects,
proposals or other opportunities which are developed by employee during his
employment hereunder, or originated by any third party and brought to the
attention of employee during his employment hereunder, together with information
relating thereto (including, without limitation, data, memoranda, opinions
or
other written, electronic or charted means, or any other trade secrets or other
confidential or proprietary information of or concerning the Company))
(collectively, “Business Information”). Moreover, all documents, drawings,
notes, files, data, records, correspondence, manuals, models, specifications,
computer programs, E-mail, voice mail, electronic databases, maps, and all
other
writings or materials of any type embodying any such Business Information are
and shall be the sole and exclusive property of the Company. Upon termination
of
employee’s employment hereunder, for any reason, employee promptly shall deliver
all Business Information, and all copies thereof, to the Company. As a result
of
knowledge of confidential Business Information of third parties, such as
customers, suppliers, partners, joint ventures, and the like, of the Company,
employee also agrees to preserve and protect the confidentiality of such third
party Business Information to the same extent, and on the same basis, as the
Company’s Business Information.
(3)
Employee agrees that, during his employment, any inventions (whether or not
patentable), concepts, ideas, expressions, discoveries, or improvements,
including, without limitation, products, processes, methods, publications,
works
of authorship, software programs, designs, trade secrets, technical
specifications, algorithms, technical data, know-how, internal reports and
memoranda, marketing plans and any other patent or proprietary rights conceived,
devised, developed, or reduced to practice, in whole or in part, by employee
during the term of his employment by the Company that pertain to hydrogen fuel
technology and fuel cell system technology (the “Developments”) are the sole and
exclusive property of the Company on a worldwide basis as works made for hire
or
otherwise, and further that any revenue or other consideration obtained from
the
sale, license or other transfer or conveyance of any such Development, or a
product or service incorporating such Development, is solely for the benefit
of
and becomes the property of the Company. To the extent a Development may not
be
considered work made by employee for hire for the Company, employee agrees
to
assign, and automatically assigns at the time of creation of the Development,
without any requirement of further consideration, any and all right, title
and
interest he may have in such Development. Employee shall preserve each such
Development as confidential and proprietary information of the Company. Employee
shall promptly disclose each such Development and shall, upon demand, at the
Company’s expense, execute and deliver to the Company such documents,
instruments, deeds, acts and things as the Company may request to evidence
or
maintain the Company’s ownership of the Development, in any and all countries of
the world, or to effect enforcement thereof, and to assign all rights, if any,
of employee in and to each of such Developments. In addition, employee agrees
not to publish or seek to publish any information whatsoever concerning any
Development without the prior written consent of the Company, which may be
withheld in its sole and absolute discretion.
(4)
Any
inventions relating to the business of the Company that pertain to hydrogen
fuel
technology and fuel cell system technology conceived or reduced to practice
after employee leaves the employ of the Company shall be conclusively deemed
to
have been conceived and/or reduced to practice during the period of the
employment if conceived and/or reduced to practice within six months from
termination of employment, and shall be subject to the terms of this Section
7(c).
(d)
Non-Recruitment
of Other Company Employees.
During
the term of employee’s
employment under this Agreement and for a period of one (1) year thereafter,
employee will not directly or indirectly (i) recruit, solicit, encourage or
induce any employee of the Company or any of its Affiliates to terminate such
employment, (ii) otherwise disrupt any such employee’s relationship with the
Company or its Affiliates, or (iii) whether individually or as owner, agent,
employee, consultant or otherwise, hire, employ or offer employment to any
person who is or was employed by the Company or an Affiliate thereof, whether
or
not such engagement is solicited by employee.
(e)
Non-Solicitation
of Customers or Other Persons.
(1)
During the term of employee’s employment under this Agreement and for a period
of one (1) year thereafter, employee shall not solicit, induce, or attempt
to
induce any past, current or potential customer of the Company or its Affiliates
to (A) cease doing business in whole or in part with or through the Company
or
its Affiliates or otherwise disrupt any previously established relationship
existing between such customer and the Company or its Affiliates, or (B) do
business with any other person or entity which performs services materially
similar to or competitive with those provided by the Company or its Affiliates.
(2)
During the term of employee’s employment under this Agreement and for a period
of one (1) year thereafter, employee shall not solicit, induce, or attempt
to
induce any supplier, lessor, licensor, or other person who has a business
relationship with the Company or its Affiliates, or who on the date employee’s
employment hereunder is terminated is engaged in discussions or negotiations
to
enter into a business relationship with the Company or its Affiliates, to
discontinue or reduce the extent of such relationship with the Company or its
Affiliates.
(f)
Non-Competition
with the Company.
Employee acknowledges and agrees that the services which have been and will
be
performed by employee for the Company or its Affiliates, whether during his
employment with the Company or any Affiliates otherwise than pursuant to this
Agreement, include services of a special, unique, unusual, extraordinary and
intellectual character. Employee further acknowledges that the business of
the
Company and its subsidiaries is worldwide in scope, that employee has been
and
will be an integral part of conceiving, developing, marketing and selling such
products and services on a worldwide basis, and that the Company and its
subsidiaries compete with other organizations that are or could be located
in
any part of the world. Employee further acknowledges that, by virtue of the
character of his services employee will be deemed to have worked for the Company
or its subsidiaries at any and every location and geographic area in which
employee’s services have been or will be applied on behalf of the Company or any
subsidiary during his employment by the Company or any subsidiary whether
pursuant to this Agreement or otherwise, irrespective of whether or not employee
was physically present at such location or geographic area. Therefore, employee
hereby covenants and agrees that during the term of employee’s employment
hereunder and for a period of one (1) year thereafter, employee will not
directly or indirectly engage or invest in, own, manage, operate, control or
participate in the ownership, management, operation or control of, be employed
by, associated or connected with, or render services or advice to, any other
business whose services, products or activities compete in whole or in part
with
the services, products or activities of the Company relating to Company’s
hydrogen fuel technology and fuel cell system technology or its subsidiaries,
within all geographic areas worldwide in which employee’s services were applied
by the Company or its subsidiaries at any time during employee’s by the Company
or its subsidiaries otherwise than pursuant to this Agreement.
(g)
Reasonableness
of Covenants.
It is
understood and agreed by the parties hereto that the covenants by employee
set
forth in this Section 7 are essential elements of this Agreement and that but
for employee’s agreement to comply with such covenants, the Company would not
have entered into this Agreement. The parties also acknowledge that the time,
scope, geographic area and other provisions of Section 7(b) through 7(f) have
been specifically negotiated at arm’s length by sophisticated commercial parties
with peculiar knowledge of the Company’s business. It is further agreed that all
such provisions are reasonable under the circumstances pertaining to the
Company’s business and employee’s key role therein, and necessary for the
protection of the Company’s legitimate business interests. The Company and
employee have independently consulted their respective legal counsel and have
been advised in all respects concerning the reasonableness and propriety of
such
covenants, with specific regard to the nature of the businesses conducted by
the
Company and its subsidiaries.
(h)
Injunctive
Relief and Other Remedies with Respect to Covenants.
Employee acknowledges and agrees that the covenants and obligations of employee
as set forth in this Section 7 relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which adequate
remedies are not available at law. Employee further agrees that if, at any
time,
despite express agreement of the parties hereto, a court of competent
jurisdiction holds that any portion of Section 7(b) through 7(f) of this
Agreement is unenforceable for any reason, the maximum permissible restrictions
of time, scope or geographic area as determined by such court, will be
substituted for any such restrictions held unenforceable. In the event
employee’s
breach (or threatened breach in the case of clause (i) below) of any of the
covenants and obligations set forth in this Section 7, employee agrees that
the
Company will (i) be entitled to an injunction, restraining order or such other
equitable relief restraining employee from violating such covenants and
obligations contained in this Section 7, without requiring the Company to post
any bond or surety therefore, and (ii) have no further obligation to make any
payments to employee hereunder. These remedies are cumulative and are in
addition to any other rights and remedies the Company may have at law or in
equity, including, but not limited to, recovery of costs and expenses such
as
reasonable attorneys’ fees by reason of any such breach, actual damages
sustained by the Company as a result of any such breach, and cancellation of
any
unpaid salary, bonus, commissions or reimbursements otherwise outstanding at
such time.
(i)
Applicability
of Certain Sections.
Notwithstanding the foregoing, the parties agree that Sections 7(d), 7(e) and
7(f) shall be binding upon employee only in the event that employee voluntarily
terminates his employment hereunder during the term of this Agreement without
the consent of the Company and in the event that employee is discharged by
the
Company for Disability or Cause.
8.
Market
Stand-Off. In connection with any public offering by the Company of its
equity securities pursuant to an effective registration statement filed under
the Securities Act of 1933, including the Company’s first public offering, the
Employee shall not directly or indirectly sell, make any short sale of, loan,
hypothecate, pledge, offer, grant or sell any option or other contract for
the
purchase of, purchase any option or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing transactions
with respect to, any equity securities of the Company without the prior written
consent of the Company or its underwriters, if any. Such restriction (the
“Market Stand-Off”) shall be in effect for such period of time following the
date of the final prospectus for the offering as may be requested by the Company
or such underwriters, if any. In no event, however, shall such period exceed
the
shortest such period required of any stockholder holding five percent (5%)
or
more of the Company’s common stock on the date hereof. The Market Stand-Off
shall in any event terminate two (2) years after the date of the Company’s first
public offering following the date hereof. In the event of the declaration
of a
stock dividend, a spin-off, a stock split, an adjustment in conversion ratio,
a
recapitalization or a similar transaction affecting the Company’s outstanding
securities without receipt of consideration, any new, substituted or additional
securities which are by reason of such transaction distributed with respect
to
any equity securities of the Company subject to the Market Stand-Off, or into
which such equity securities of the Company thereby become convertible, shall
immediately be subject to the Market Stand-Off. In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to
the
equity securities of the Company until the end of the applicable stand-off
period. The Company’s underwriters, if any, shall be beneficiaries of the
agreement set forth in this Subsection (c).
9.
Successors; Binding Agreement.
The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any rights, interests or obligations
hereunder may be assigned by any party hereto without the prior written consent
of the other parties hereto; provided that the Company may assign any rights,
interests or obligations hereunder to any successor (whether direct or indirect,
by merger, purchase, consolidation or otherwise) to all or substantially all
of
the business and/or assets of the Company.
10.
Notice.
All
notices hereunder must be in writing and shall be deemed to have given upon
receipt of delivery by: (a) personal delivery to the designated individual,
(b)
certified or registered mail, postage prepaid, return receipt requested, (c)
a
nationally recognized overnight courier service with confirmation of receipt
or
(d) facsimile transmission with confirmation of receipt. All such notices must
be addressed as follows or such other address as to which any party hereto
may
have notified the other in writing. For the purpose of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be
in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepared, addressed as follows:
To
the
Company:
0
Xxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx Xxxxxxx
To
Employee:
Xxxx
X.
Xxxx
0000
Xxxx
Xxxxxxxx Xxxx
Xxxx
Xxxxxx, Xxxx 00000
or
to
such other address as any party may have furnished to the others in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
11.
Miscellaneous.
No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by employee
and
such officer of the Company as may be specifically designated by the Chief
Executive Officer of the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any
prior or subsequent time. No agreements or representations, oral or otherwise
express or implied, with respect to the subject matter hereof have been made
by
either party which are not set forth expressly in this Agreement.
12.
Validity.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
13.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute one and
the
same instrument.
14.
Entire
Agreement.
This
Agreement sets forth the entire agreement of the parties hereto in respect
of
the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto; and any prior agreement of the parties hereto in respect
of
the subject matter contained herein is hereby terminated and
canceled.
15.
Governing
Law.
This
Agreement , the entire relationship of the parties hereto, and any litigation
between the parties (whether grounded in contract, tort, statute, law or equity)
shall be governed by, construed in accordance with, and interpreted pursuant
to
the laws of the State of Texas, without giving effect to its choice of laws
principles. Exclusive venue for any litigation between the parties hereto shall
be in Xxxxxx County, Texas, and shall be brought in the State District Courts
of
Xxxxxx County, Texas, or in the United States District Court for the Southern
District of Texas, Houston Division. The parties hereto waive any challenge
to
personal jurisdiction or venue (including without limitation a challenge based
on inconvenience) in Xxxxxx County, Texas, and specifically consent to the
jurisdiction of the State District Courts of Xxxxxx County and the United States
District Court for the Southern District of Texas, Houston
Division.
[signatures
appear on the following page]
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first above written.
|
COMPANY:
TRULITE, INC.
|
||
| |
|
|
| By: |  |
|
|
Name: Xxxx Xxxxxxx |
||
| Title: President | ||
| EMPLOYEE: | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxx | |
|
Xxxx X. Xxxx |
||
EXHIBIT
“A”
FORM
OF STOCK OPTION AGREEMENT
Trulite,
Inc. Stock Option Plan:
Summary
of Stock Purchase
You
have
been granted the following option to purchase shares of the Common Stock of
Trulite, Inc. (the “Company”):
| Name of Optionee: | Xxxx X. Xxxx | |
| Total Number of Shares: | 174,826 | |
| Type of Option: | Nonstatutory Stock Option (NSO) | |
| Exercise Price Per Share: | $0.88 | |
| Date of Grant: | April 3, 2006 | |
|
Date
Exercisable:
|
This option may be exercised at any time after the Date of Grant for all or any part of the Shares subject to this option. | |
| Vesting Commencement Date: | Immediately fully vested | |
|
Expiration
Date:
|
April
3, 2010
|
By
your
signature and the signature of the Company’s representative below, you and the
Company agree that this option is granted under and governed by the terms and
conditions of the Trulite Stock Option Plan and the Stock Option Agreement,
both
of which are attached to and made a part of this document.
| Purchaser: | Trulite, Inc. |
| /s/ Xxxx X. Xxxx | By: |
| Xxxx X. Xxxx |
Title: President
|
Trulite,
Inc. Stock Option Plan:
Stock
Option Agreement
| (1) |
Acquisition
Of Shares.
|
| (a) |
Transfer.
On the terms and conditions set forth in the Summary of Stock Purchase
and
this Agreement, the Company agrees to transfer to the Purchaser the
number
of Shares set forth in the Summary of Stock Purchase. The transfer
shall
occur at the offices of the Company on the date of purchase set forth
in
the Summary of Stock Purchase or at such other place and time as
the
parties may agree.
|
| (b) |
Consideration.
The Purchaser agrees to pay the Purchase Price set forth in the Summary
of
Stock Purchase for each Purchased Share. The Purchase Price is agreed
to
be at least 100% of the Fair Market Value of the Purchased Shares.
Payment
shall be made in cash or cash equivalents on the date of purchase
set
forth in the Summary of Stock
Purchase.
|
| (c) |
Stock
Option Plan and Defined Terms. The transfer of the Purchased Shares is
subject to the Plan, a copy of which the Purchaser acknowledges having
received. The provisions of the Plan are incorporated into this Agreement
by this reference. Capitalized terms are defined in Section 12 of
this
Agreement.
|
| (2) |
Right
Of Repurchase.
|
| (a) |
Scope
of Repurchase Right. All Purchased Shares initially shall be
Restricted Shares and shall be subject to a right (but not an obligation)
of repurchase by the Company. The Purchaser shall not transfer, assign,
encumber or otherwise dispose of any Restricted Shares, except as
provided
in the following sentence.
|
| (b) |
Condition
Precedent to Exercise. The Right of Repurchase shall be exercisable
only during the 60-day period next following the date when the Purchaser’s
Service terminates for any reason, with or without cause, including
(without limitation) death or
disability.
|
| (c) |
Lapse
of Repurchase Right. The Right of Repurchase shall lapse with respect
to the Purchased Shares in accordance with the vesting schedule set
forth
in the Summary of Stock Purchase. In addition, the Right of Repurchase
shall lapse and all of the remaining Restricted Shares shall become
vested
if (i) the Company is subject to a Change in Control before the
Purchaser’s Service terminates and (ii) the Right of Repurchase is not
assigned to the entity that employs the Purchaser immediately after
the
Change in Control or to its parent or
subsidiary.
|
| (d) |
Repurchase
Cost. If the Company exercises the Right of Repurchase, it shall
pay
the Purchaser an amount equal to the Purchase Price for each of the
Restricted Shares being
repurchased.
|
| (e) |
Exercise
of Repurchase Right. The Right of Repurchase shall be exercisable only
by written notice delivered to the Purchaser prior to the expiration
of
the 60-day period specified in Subsection (b) above. The notice shall
set forth the date on which the repurchase is to be effected. Such
date
shall not be more than 30 days after the date of the notice. The
certificate(s) representing the Restricted Shares to be repurchased
shall,
prior to the close of business on the date specified for the repurchase,
be delivered to the Company properly endorsed for transfer. The Company
shall, concurrently with the receipt of such certificate(s), pay
to the
Purchaser the purchase price determined according to Subsection (d)
above. Payment shall be made in cash or cash equivalents or by canceling
indebtedness to the Company incurred by the Purchaser in the purchase
of
the Restricted Shares. The Right of Repurchase shall terminate with
respect to any Restricted Shares for which it has not been timely
exercised pursuant to this
Subsection (e).
|
| (f) |
Additional
Shares or Substituted Securities. In the event of the declaration of a
stock dividend, the declaration of an extraordinary dividend payable
in a
form other than stock, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting
the Company’s outstanding securities without receipt of consideration, any
new, substituted or additional securities or other property (including
money paid other than as an ordinary cash dividend) which are by
reason of
such transaction distributed with respect to any Restricted Shares
or into
which such Restricted Shares thereby become convertible shall immediately
be subject to the Right of Repurchase. Appropriate adjustments to
reflect
the distribution of such securities or property shall be made to
the
number and/or class of the Restricted Shares. Appropriate adjustments
shall also, after each such transaction, be made to the price per
share to
be paid upon the exercise of the Right of Repurchase in order to
reflect
any change in the Company’s outstanding securities effected without
receipt of consideration therefor; provided, however, that the aggregate
purchase price payable for the Restricted Shares shall remain the
same.
|
| (g) |
Termination
of Rights as Stockholder. If the Company makes available, at the time
and place and in the amount and form provided in this Agreement,
the
consideration for the Restricted Shares to be repurchased in accordance
with this Section 2, then after such time the person from whom such
Restricted Shares are to be repurchased shall no longer have any
rights as
a holder of such Restricted Shares (other than the right to receive
payment of such consideration in accordance with this Agreement).
Such
Restricted Shares shall be deemed to have been repurchased in accordance
with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement.
|
| (h) |
Escrow.
Upon issuance, the certificates for Restricted Shares shall be deposited
in escrow with the Company to be held in accordance with the provisions
of
this Agreement. Any new, substituted or additional securities or
other
property described in Subsection (f) above shall immediately be
delivered to the Company to be held in escrow, but only to the extent
the
Purchased Shares are at the time Restricted Shares. All regular cash
dividends on Restricted Shares (or other securities at the time held
in
escrow) shall be paid directly to the Purchaser and shall not be
held in
escrow. Restricted Shares, together with any other assets or securities
held in escrow hereunder, shall be (i) surrendered to the Company for
repurchase and cancellation upon the Company’s exercise of its Right of
Repurchase or Right of First Refusal or (ii) released to the
Purchaser upon the Purchaser’s request to the extent the Purchased Shares
are no longer Restricted Shares (but not more frequently than once
every
six months). In any event, all Purchased Shares which have vested
(and any
other vested assets and securities attributable thereto) shall be
released
within 60 days after the earlier of (i) the Purchaser's cessation of
Service or (ii) the lapse of the Right of First
Refusal.
|
| (3) |
Right
Of First Refusal.
|
| (a) |
Right
of First Refusal. In the event that the Purchaser proposes to sell,
pledge or otherwise transfer to a third party any Purchased Shares,
or any
interest in such Purchased Shares, the Company shall have the Right
of
First Refusal with respect to all (and not less than all) of such
Purchased Shares. If the Purchaser desires to transfer Purchased
Shares,
the Purchaser shall give a written Transfer Notice to the Company
describing fully the proposed transfer, including the number of Purchased
Shares proposed to be transferred, the proposed transfer price, the
name
and address of the proposed Transferee and proof satisfactory to
the
Company that the proposed sale or transfer will not violate any applicable
federal or state securities laws. The Transfer Notice shall be signed
both
by the Purchaser and by the proposed Transferee and must constitute
a
binding commitment of both parties to the transfer of the Purchased
Shares. The Company shall have the right to purchase all, and not
less
than all, of the Purchased Shares on the terms of the proposal described
in the Transfer Notice (subject, however, to any change in such terms
permitted under Subsection (b) below) by delivery of a notice of
exercise of the Right of First Refusal within 30 days after the date
when the Transfer Notice was received by the Company. The Company’s rights
under this Subsection (a) shall be freely assignable, in whole or in
part.
|
| (b) |
Transfer
of Shares. If the Company fails to exercise its Right of First Refusal
within 30 days after the date when it received the Transfer Notice,
the Purchaser may, not later than 90 days following receipt of the
Transfer Notice by the Company, conclude a transfer of the Purchased
Shares subject to the Transfer Notice on the terms and conditions
described in the Transfer Notice, provided that any such sale is
made in
compliance with applicable federal and state securities laws and
not in
violation of any other contractual restrictions to which the Purchaser
is
bound. Any proposed transfer on terms and conditions different from
those
described in the Transfer Notice, as well as any subsequent proposed
transfer by the Purchaser, shall again be subject to the Right of
First
Refusal and shall require compliance with the procedure described
in
Subsection (a) above. If the Company exercises its Right of First
Refusal, the parties shall consummate the sale of the Purchased Shares
on
the terms set forth in the Transfer Notice within 60 days after the
date
when the Company received the Transfer Notice (or within such longer
period as may have been specified in the Transfer Notice); provided,
however, that in the event the Transfer Notice provided that payment
for
the Purchased Shares was to be made in a form other than cash or
cash
equivalents paid at the time of transfer, the Company shall have
the
option of paying for the Purchased Shares with cash or cash equivalents
equal to the present value of the consideration described in the
Transfer
Notice.
|
| (c) |
Additional
Shares or Substituted Securities. In the event of the declaration of a
stock dividend, the declaration of an extraordinary dividend payable
in a
form other than stock, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting
the Company’s outstanding securities without receipt of consideration, any
new, substituted or additional securities or other property (including
money paid other than as an ordinary cash dividend) which are by
reason of
such transaction distributed with respect to any Purchased Shares
subject
to this Section 3 or into which such Purchased Shares thereby become
convertible shall immediately be subject to this Section 3.
Appropriate adjustments to reflect the distribution of such securities
or
property shall be made to the number and/or class of Purchased Shares
subject to this Section 3.
|
| (d) |
Termination
of Right of First Refusal. Any other provision of this Section 3
notwithstanding, in the event that the Stock is readily tradable
on an
established securities market when the Purchaser desires to transfer
Purchased Shares, the Company shall have no Right of First Refusal,
and
the Purchaser shall have no obligation to comply with the procedures
prescribed by Subsections (a) and (b)
above.
|
| (e) |
Permitted
Transfers. This Section 3 shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer
to the Purchaser’s spouse, children or grandchildren or to a trust
established by the Purchaser for the benefit of the Purchaser or
the
Purchaser’s spouse, children or grandchildren, provided in either case
that the Transferee agrees in writing on a form prescribed by the
Company
to be bound by all provisions of this Agreement. If the Purchaser
transfers any Purchased Shares, either under this Subsection (e) or
after the Company has failed to exercise the Right of First Refusal,
then
this Section 3 shall apply to the Transferee to the same extent as to
the Purchaser.
|
| (f) |
Termination
of Rights as Stockholder. If the Company makes available, at the time
and place and in the amount and form provided in this Agreement,
the
consideration for the Purchased Shares to be purchased in accordance
with
this Section 3, then after such time the person from whom such
Purchased Shares are to be purchased shall no longer have any rights
as a
holder of such Purchased Shares (other than the right to receive
payment
of such consideration in accordance with this Agreement). Such Purchased
Shares shall be deemed to have been purchased in accordance with
the
applicable provisions hereof, whether or not the certificate(s) therefor
have been delivered as required by this
Agreement.
|
| (4) |
Other
Restrictions On Transfer.
|
| (a) |
Purchaser
Representations. In connection with the issuance and acquisition of
Shares under this Agreement, the Purchaser hereby represents and
warrants
to the Company as follows:
|
| (i) |
The
Purchaser is acquiring and will hold the Purchased Shares for investment
for his or her account only and not with a view to, or for resale
in
connection with, any “distribution” thereof within the meaning of the
Securities Act.
|
| (ii) |
The
Purchaser understands that the Purchased Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom
and
that the Purchased Shares must be held indefinitely, unless they
are
subsequently registered under the Securities Act or the Purchaser
obtains
an opinion of counsel, in form and substance satisfactory to the
Company
and its counsel, that such registration is not required. The Purchaser
further acknowledges and understands that the Company is under no
obligation to register the Purchased
Shares.
|
| (iii) |
The
Purchaser is aware of the adoption of Rule 144 by the Securities and
Exchange Commission under the Securities Act, which permits limited
public
resales of securities acquired in a non-public offering, subject
to the
satisfaction of certain conditions, including (without limitation)
the
availability of certain current public information about the issuer,
the
resale occurring only after the holding period required by Rule 144
has
been satisfied, the sale occurring through an unsolicited “broker’s
transaction,” and the amount of securities being sold during any
three-month period not exceeding specified limitations. The Purchaser
acknowledges and understands that the conditions for resale set forth
in
Rule 144 have not been satisfied and that the Company has no plans to
satisfy these conditions in the foreseeable
future.
|
| (iv) |
The
Purchaser will not sell, transfer or otherwise dispose of the Purchased
Shares in violation of the Securities Act, the Securities Exchange
Act of
1934, or the rules promulgated thereunder, including Rule 144 under
the Securities Act. The Purchaser agrees that he or she will not
dispose
of the Purchased Shares unless and until he or she has complied with
all
requirements of this Agreement applicable to the disposition of Purchased
Shares and he or she has provided the Company with written assurances,
in
substance and form satisfactory to the Company, that (A) the proposed
disposition does not require registration of the Purchased Shares
under
the Securities Act or all appropriate action necessary for compliance
with
the registration requirements of the Securities Act or with any exemption
from registration available under the Securities Act (including Rule
144)
has been taken and (B) the proposed disposition will not result in
the contravention of any transfer restrictions applicable to the
Purchased
Shares under the Rules of the California Corporations
Commissioner.
|
| (v) |
The
Purchaser has been furnished with, and has had access to, such information
as he or she considers necessary or appropriate for deciding whether
to
invest in the Purchased Shares, and the Purchaser has had an opportunity
to ask questions and receive answers from the Company regarding the
terms
and conditions of the issuance of the Purchased
Shares.
|
| (vi) |
The
Purchaser is aware that his or her investment in the Company is a
speculative investment which has limited liquidity and is subject
to the
risk of complete loss. The Purchaser is able, without impairing his
or her
financial condition, to hold the Purchased Shares for an indefinite
period
and to suffer a complete loss of his or her investment in the Purchased
Shares.
|
| (b) |
Securities
Law Restrictions. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act
or
have been registered or qualified under the securities laws of any
state,
the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of the Purchased Shares (including the placement
of appropriate legends on stock certificates or the imposition of
stop-transfer instructions) if, in the judgment of the Company, such
restrictions are necessary or desirable in order to achieve compliance
with the Securities Act, the securities laws of any state or any
other
law.
|
| (c) |
Market
Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, including the Company’s initial
public offering, the Purchaser shall not directly or indirectly sell,
make
any short sale of, loan, hypothecate, pledge, offer, grant or sell
any
option or other contract for the purchase of, purchase any option
or other
contract for the sale of, or otherwise dispose of or transfer, or
agree to
engage in any of the foregoing transactions with respect to, any
Purchased
Shares without the prior written consent of the Company or its
underwriters. Such restriction (the “Market Stand-Off”) shall be in effect
for such period of time following the date of the final prospectus
for the
offering as may be requested by the Company or such underwriters.
In no
event, however, shall such period exceed 180 days. The Market Stand-Off
shall in any event terminate two years after the date of the Company’s
initial public offering. In the event of the declaration of a stock
dividend, a spin-off, a stock split, an adjustment in conversion
ratio, a
recapitalization or a similar transaction affecting the Company’s
outstanding securities without receipt of consideration, any new,
substituted or additional securities which are by reason of such
transaction distributed with respect to any Shares subject to the
Market
Stand-Off, or into which such Shares thereby become convertible,
shall
immediately be subject to the Market Stand-Off. In order to enforce
the
Market Stand-Off, the Company may impose stop-transfer instructions
with
respect to the Purchased Shares until the end of the applicable stand-off
period. The Company’s underwriters shall be beneficiaries of the agreement
set forth in this Subsection (c). This Subsection (c) shall not apply
to Shares registered in the public offering under the Securities
Act, and
the Purchaser shall be subject to this Subsection (c) only if the
directors and officers of the Company are subject to similar
arrangements.
|
| (d) |
Rights
of the Company. The Company shall not be required to (i) transfer on
its books any Purchased Shares that have been sold or transferred
in
contravention of this Agreement or (ii) treat as the owner of Purchased
Shares, or otherwise to accord voting, dividend or liquidation rights
to,
any transferee to whom Purchased Shares have been transferred in
contravention of this Agreement.
|
| (5) |
Successors
And Assigns.
|
Except
as
otherwise expressly provided to the contrary, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Company and its
successors and assigns and be binding upon the Purchaser and the Purchaser’s
legal representatives, heirs, legatees, distributees, assigns and transferees
by
operation of law, whether or not any such person has become a party to this
Agreement or has agreed in writing to join herein and to be bound by the terms,
conditions and restrictions hereof.
| (6) |
No
Retention Rights.
|
Nothing
in this Agreement or in the Plan shall confer upon the Purchaser any right
to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company (or any Parent or
Subsidiary employing or retaining the Purchaser) or of the Purchaser, which
rights are hereby expressly reserved by each, to terminate his or her Service
at
any time and for any reason, with or without cause.
| (7) |
Tax
Election.
|
The
acquisition of the Purchased Shares may result in adverse tax consequences
that
may be avoided or mitigated by filing an election under Code Section 83(b).
Such election may be filed only within 30 days after the date of purchase set
forth in the Summary of Stock Purchase. The form for making the Code Section
83(b) election is attached to this Agreement as an Exhibit. The Purchaser should
consult with his or her tax advisor to determine the tax consequences of
acquiring the Purchased Shares and the advantages and disadvantages of filing
the Code Section 83(b) election. The Purchaser acknowledges that it is his
or her sole responsibility, and not the Company’s, to file a timely election
under Code Section 83(b), even if the Purchaser requests the Company or its
representatives to make this filing on his or her behalf.
| (8) |
Legends.
|
All
certificates evidencing Purchased Shares shall bear the following
legends:
“THE
SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED
OR
IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND
CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE
SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”
If
required by the authorities of any state in connection with the issuance of
the
Purchased Shares, the legend or legends required by such state authorities
shall
also be endorsed on all such certificates.
reason,
with or without cause.
| (9) |
Notice.
|
Any
notice required by the terms of this Agreement shall be given in writing and
shall be deemed effective upon personal delivery or upon deposit with the United
States Postal Service, by registered or certified mail, with postage and fees
prepaid. Notice shall be addressed to the Company at its principal executive
office and to the Purchaser at the address that he or she most recently provided
to the Company.
(10)
Entire
Agreement.
The
Summary of Stock Purchase, this Agreement and the Plan constitute the entire
contract between the parties hereto with regard to the subject matter hereof.
They supersede any other agreements, representations or understandings (whether
oral or written and whether express or implied) which relate to the subject
matter hereof.
(11)
Choice
Of Law.
This
Agreement, the entire relationship of the parties hereto related to the subject
matter hereof, and any litigation between the parties (whether grounded in
contract, tort, statute, law or equity) shall be governed by, construed in
accordance with, and interpreted pursuant to the laws of the State of Texas,
without giving effect to its choice of laws principles. Exclusive venue for
any
litigation between the parties hereto shall be in Xxxxxx County, Texas, and
shall be brought in the State District Courts of Xxxxxx County, Texas, or in
the
United States District Court for the Southern District of Texas, Houston
Division. The parties hereto waive any challenge to personal jurisdiction or
venue (including without limitation a challenge based on inconvenience) in
Xxxxxx County, Texas, and specifically consent to the jurisdiction of the State
District Courts of Xxxxxx County and the United States District Court for the
Southern District of Texas, Houston Division.
(12)
Definitions.
(a)
“Agreement” shall mean this Stock Option Agreement.
(b)
“Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time or, if a Committee has been appointed, such
Committee.
(c)
“Change in Control” shall mean:
(1)
The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if persons who were not
shareholders of the Company immediately prior to such merger, consolidation
or
other reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities
of
each of (A) the continuing or surviving entity and (B) any direct or
indirect parent corporation of such continuing or surviving entity;
or
(2)
The
sale, transfer or other disposition of all or substantially all of the Company’s
assets.
A
transaction shall not constitute a Change in Control if its sole purpose is
to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who
held
the Company’s securities immediately before such transaction.
(d)
“Code” shall mean the Internal Revenue Code of 1986, as amended.
(e)
“Committee” shall mean a committee of the Board of Directors, as described in
Section 2 of the Plan.
(f)
“Company” shall mean Trulite, Inc., a Delaware corporation.
(g)
“Consultant” shall mean a person who performs bona fide services for the
Company, a Parent or a Subsidiary as a consultant or advisor, excluding
Employees and Outside Directors.
(h)
“Employee” shall mean any individual who is a common-law employee of the
Company, a Parent or a Subsidiary.
(i)
“Fair
Market Value” shall mean the fair market value of a Share, as determined by the
Board of Directors in good faith. Such determination shall be conclusive and
binding on all persons.
(j)
“Outside Director” shall mean a member of the Board of Directors who is not an
Employee.
(k)
“Parent” shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations
other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
(l)
“Plan” shall mean the Trulite, Inc. 2006 Stock Option Plan, as
amended.
(m)
“Purchased Shares” shall mean the Shares purchased by the Purchaser pursuant to
this Agreement.
(n)
“Purchase Price” shall mean the amount for which one Share may be purchased
pursuant to this Agreement, as specified in the Summary of Stock
Purchase.
(o)
“Purchaser” shall mean the person named in the Summary of Stock Purchase.
(p)
“Restricted Share” shall mean a Purchased Share that is subject to the Right of
Repurchase.
(q)
“Right of First Refusal” shall mean the Company’s right of first refusal
described in Section 3.
(r)
“Right of Repurchase” shall mean the Company’s right of repurchase described in
Section 2.
(s)
“Securities Act” shall mean the Securities Act of 1933, as amended.
(t)
“Service” shall mean service as an Employee, Outside Director or
Consultant.
(u)
“Share” shall mean one share of Stock, as adjusted in accordance with
Section 8 of the Plan (if applicable).
(v)
“Stock” shall mean the Common Stock of the Company, with no par
value.
(w)
“Subsidiary” shall mean any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
50%
or more of the total combined voting power of all classes of stock in one of
the
other corporations in such chain.
(x)
“Summary of Stock Purchase” shall mean the document so entitled to which this
Agreement is attached.
(y)
“Transferee” shall mean any person to whom the Purchaser has directly or
indirectly transferred any Purchased Share.
(z)
“Transfer Notice” shall mean the notice of a proposed transfer of Purchased
Shares described in Section 3.
