AGREEMENT, made as of this 1st day of July 1996, by and between Leak-X
Environmental Corporation, a corporation having its principal executive
offices at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
("Grantor"), and Xxxxxxx X. Xxxxxx, Xx. residing at 00 Xxxxxxxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 ("Optionee").
W I T N E S S E T H:
WHEREAS, Optionee is presently employed by Grantor; and
WHEREAS, Grantor is desirous of increasing the incentive of Optionee to
exert his utmost efforts to improve the business and increase the assets of
the Grantor.
NOW, THEREFORE, in consideration of the promises of the Optionee to
remain in the continuous service of the Grantor or any of its subsidiaries,
and for other good and valuable consideration, the Grantor hereby grants the
Optionee options to purchase Common Stock of the Grantor upon the following
terms and conditions:
1. OPTIONS. Pursuant to its 1995 Stock Option Plan, the Grantor
hereby grants to the Optionee incentive stock options ("Incentive Stock
Options"), as provided in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), to purchase, at any time commencing as of the date
hereof, and terminating as of 5:00 P.M. New York City time, on December 31,
1998 ("Termination Date"), up to 200,000 fully paid and non-assessable shares
of the Common Stock of the Grantor, par value $.001 per share.
2. PURCHASE PRICE. The purchase price ("Purchase Price") shall be
$.265 per share. The Grantor shall pay all original issue or transfer taxes
on the exercise of the Incentive Stock Options and all other fees and expenses
necessarily incurred by the Grantor in connection therewith.
3. EXERCISE OF OPTION. (a) The Optionee shall notify the Grantor by
registered or certified mail, return receipt requested, addressed to its
principal office (Attn: Chief Executive Officer), as to the number of shares
of Common Stock which Optionee desires to purchase pursuant to the options
herein granted, which notice shall be accompanied by payment (by bank check,
certified check or by delivery of shares of the Grantor's Common Stock having
a fair market value equal to the purchase price) of the option price therefor
as specified in Paragraph 2 above. As soon as practicable thereafter, the
Grantor shall cause to be delivered to the Optionee certificates issued in the
Optionee's name evidencing the shares of Common Stock purchased by the
Optionee.
(b) If the aggregate fair market value of all the stock with respect
to which Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year and all Incentive Stock Option plans of the
Grantor, any predecessor of the Grantor, its parent or subsidiaries, exceeds
$100,000.00, the grant of the Incentive Stock Options hereunder shall not, to
the extent of such excess, be deemed a grant of Incentive Stock Options but
will instead be deemed the grant of Non-Qualified Stock Options under the
Plan. For purposes of this paragraph, the fair market value of the stock with
respect to which an Incentive Stock Option is exercisable shall be the value
of such stock at the time that specific option is granted as provided for in
Section 422(c)(7) of the Code.
(c) Subject to Paragraph 4 below, the Incentive Stock Options granted
hereunder may be exercised by the Optionee at any time after date hereof and
through the Termination Date.
4. OPTION CONDITIONED ON CONTINUED EMPLOYMENT.
(a) If the employment of the Optionee shall be terminated voluntarily
by the Optionee or for cause, the Incentive Stock Options granted to the
Optionee hereunder shall immediately expire. If such employment shall
terminate otherwise than by reason of death, disability, voluntarily by the
Optionee or for cause, such options may be exercised at any time within three
(3) months after such termination, subject to the provisions of subparagraph
(d) of this Paragraph 4.
(b) If the Optionee dies (i) while employed by the Grantor or a
subsidiary or parent corporation, or (ii) within three (3) months after the
termination of Optionee's employment other than voluntarily by the Optionee or
for cause, such Incentive Stock Options may be exercised by a legatee or
legatees of such Incentive Stock Options under such individual's last will or
by his personal representatives or distributees at any time within one year
after his death, subject to the provisions of subparagraph (d) of this
Paragraph 4.
(c) If the Optionee becomes disabled within the definition of Section
22(e) of the Code while employed by the Grantor or a subsidiary or parent
corporation, such Incentive Stock Options may, subject to the provisions of
subparagraph (d) of this Paragraph 4, be exercised at any time within one year
after Optionee's termination of employment due to the disability.
(d) Incentive Stock Options may not be exercised pursuant to this
Paragraph 4 except to the extent that the Optionee was entitled to exercise
the options at the time of termination of employment or death pursuant to
Paragraph 3, and in any event may not be exercised after the original
expiration date of the options.
5. DIVISIBILITY AND NON-ASSIGNABILITY OF THE OPTIONS.
(a) The Optionee may exercise the Incentive Stock Options herein
granted from time to time during the period of their effectiveness with
respect to any whole number of shares included therein.
(b) The Optionee may not give, grant, sell, exchange, transfer legal
title, pledge, assign or otherwise encumber or dispose of the Incentive Stock
Options herein granted or any interest therein, otherwise than by will or the
laws of descent and distribution, and the Incentive Stock Options herein
granted, or any of them, shall be exercisable during the Optionee's lifetime
only by the Optionee.
6. STOCK AS INVESTMENT. By accepting the Incentive Stock Options
herein granted, the Optionee agrees for himself, his heirs and legatees that
any and all shares of Common Stock purchased hereunder shall be acquired for
investment purposes only and not for sale or distribution, and upon the
issuance of any or all of the shares of Common Stock issuable under the
options granted hereunder, the Optionee, or his heirs or legatees receiving
such shares of Common Stock, shall deliver to the Grantor a representation in
writing, that such shares of Common Stock are being acquired in good faith for
investment purposes only and not for sale or distribution. Grantor may place
a "stop transfer" order with respect to such shares of Common Stock with its
transfer agent and place an appropriate restrictive legend on the stock
certificate evidencing such shares of Common Stock.
7. RESTRICTION ON ISSUANCE OF SHARES. The Grantor shall not be
required to issue or deliver any certificate for shares of Common Stock
purchased upon the exercise of any Incentive Stock Options granted hereunder
unless (a) the issuance of such shares of Common Stock has been registered
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, or counsel to the Grantor shall have given an opinion that such
registration is not required; (b) approval, to the extent required, shall have
been obtained from any state regulatory body having jurisdiction thereof; and
(c) permission for the listing of such shares of Common Stock, if required,
shall have been given by any national securities exchange on which the shares
of Common Stock of the Grantor are at the time of issuance listed.
8. NOTIFICATION OF TRANSFER FOR TAX PURPOSES. In the event that the
Optionee disposes (whether by sale, exchange, gift or any other transfer) of
any shares of Common Stock acquired pursuant to the exercise of the Incentive
Stock Options granted hereunder, either within two years after the effective
date of the grant of the Incentive Stock Options to the Optionee hereunder or
within one year of the purchase of the shares of Common Stock by the Optionee
upon the exercise of the Incentive Stock Options, the Optionee will notify the
Grantor in writing, within thirty days after such disposition.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Common Stock of the
Grantor by reason of stock dividends, stock splits, recapitalizations,
mergers, consolidations, combinations, exchanges of shares, reorganizations or
liquidations, the number of shares of Common Stock as to which the options may
be exercised shall be correspondingly adjusted by the Grantor, and the
Purchase Price shall be adjusted so that the product of the Purchase Price
immediately after such event multiplied by the number of options subject to
this Agreement immediately after such event shall be equal to the product of
the Purchase Price multiplied by the number of shares subject to this
Agreement immediately prior to the occurrence of such event. No adjustment
shall be made with respect to stock dividends or splits which do not exceed 5%
in any fiscal year, cash dividends or the issuance to shareholders of the
Grantor of rights to subscribe for additional shares of Common Stock or other
securities. Anything to the contrary contained herein notwithstanding, the
Board of Directors of the Grantor shall have the discretionary power to take
any action necessary or appropriate to prevent these options from being
disqualified as "Incentive Stock Options" under the United States Income Tax
laws then in effect.
(b) Any adjustment in the number of shares of Common Stock shall
apply proportionately to only the unexercised portion of the Incentive Stock
Options granted hereunder. If fractions of a share of Common Stock would
result from any such adjustment, the adjustment shall be revised to the next
higher whole number of shares of Common Stock so long as such increase does
not result in the holder of the options being deemed to own more than 5% of
the total combined voting power or value of all classes of shares of capital
stock of the Grantor or subsidiaries.
10. NO RIGHTS IN OPTION STOCK. Optionee shall have no rights as a
shareholder in respect of shares of Common Stock as to which the options
granted hereunder shall not have been exercised and payment made as herein
provided.
11. EFFECT UPON EMPLOYMENT. This Agreement does not give the
Optionee any right to continued employment by the Grantor.
12. BINDING EFFECT. Except as herein otherwise expressly provided,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their legal representatives and assigns.
13. AGREEMENT SUBJECT TO PLAN. Notwithstanding anything contained
herein to the contrary, this Agreement is subject to, and shall be construed
in accordance with, the terms of the Grantor's 1995 Stock Option Plan, and in
the event of any inconsistency between the terms hereof and the terms of such
Plan, the terms of the Plan shall govern.
14. MISCELLANEOUS. This Agreement shall be construed under the laws
of the State of Delaware, without application to the principles of conflicts
of law. Headings have been included herein for convenience of reference only,
and shall not be deemed a part of this Agreement.
LEAK-X ENVIRONMENTAL CORPORATION
By:/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
ACCEPTED AND AGREED TO:
/s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx.
