NOVUME SOLUTIONS, INC. NON-QUALIFIED STOCK OPTION GRANT AGREEMENT
Exhibit 10.6
THIS
AGREEMENT (“Agreement”), is dated
this 27th
day of September, 2017, and effective as of August 28, 2017,
between Novume Solutions, Inc., a Delaware corporation (the
“Company”), and
Xxxxx Xxxxx (the
“Grantee”).
WITNESSETH:
WHEREAS, the
Grantee is a former non-employee director of Brekford Traffic
Safety, Inc., a Delaware corporation (“Brekford”), which became
a wholly-owned subsidiary of the Company pursuant to the
consummation of a merger transaction (the “Merger”) that closed on
August 28, 2017;
WHEREAS, on
August 11, 2016 (the
“Original Grant
Date”), Grantee received a grant of options (the
“Brekford
Options”) to purchase up to 75,000 shares of the common stock, par
value $0.0001 per share, of Brekford, under Brekford’s 2008
Stock Incentive Plan (“Brekford Plan”), pursuant
to the terms of the agreement attached as Exhibit A hereto (the
“Original Grant
Agreement”) and the terms of the Brekford
Plan;
WHEREAS, upon
consummation of the Merger, the Brekford Options were fully vested
and they were automatically converted into options to purchase up
to 5,000 shares of the
common stock, par value $0.0001 per share, of the Company
(“Common
Stock”), upon the closing of the Merger in accordance
with the terms of the merger agreement;
WHEREAS, upon
consummation of the Merger, Grantee ceased to provide services to
Brekford;
NOW,
THEREFORE, in consideration of the various covenants and agreements
contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1.
Grant of Option.
The Company hereby grants to the Grantee fully-vested options (the
“Options”) to purchase all
or part of an aggregate of 5,000 shares of Common Stock (the
“Shares”), subject to the
requirements set forth in this Agreement. The Option is a
Non-Qualified Stock Option and is not intended to qualify as an
“incentive stock option” as that term is used in
Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).
2.
Exercise Price. The
per share purchase price of the Shares issuable upon exercise of
the Options shall be $1.80
(the “Exercise
Price”), being the product of the original exercise
price of $0.12 under the Brekford Option and fifteen, as required
by the terms of the merger agreement.
3.
Term. The date on
which the term of the Options would have expired in accordance with
the Original Grant Agreement and the Brekford Plan is September 27,
2017, being 30 days after the date on which the Grantee ceased to
provide services to Brekford; however, for no additional
consideration, the parties hereto have agreed to extend the term
until December 31,
2017.
4.
Exercise.
(a) Subject
to the terms and conditions of this Agreement, the Options may be
exercised by written notice delivered to the Company or its
designated representative in the manner and at the address for
notices set forth in Section 9 hereof. Such
notice shall state that the Options are being exercised thereby and
shall specify the number of Shares for which the Options are being
exercised. The notice shall be signed by the person or persons
exercising the Options and shall be accompanied by payment in full
of the Exercise Price for such Shares being acquired upon the
exercise of the Options. Payment of such Exercise Price may be
made by one of the following methods:
(i) in cash
(in the form of a certified or bank check or such other instrument
as the Administrator may accept);
(ii) in any
combination of (a) and (b) above;
(iii)
by delivery of a properly executed exercise notice together with
such other documentation as the Company’s Board of Directors
(the “Board”) and a qualified
broker, if applicable, shall require to effect an exercise of the
Options, and delivery to the Company of the proceeds required to
pay the Exercise Price; or
(iv) by
requesting that the Company withhold such number of Shares then
issuable upon exercise of the Options as will have a Fair Market
Value equal to the Exercise Price of the Shares being acquired upon
the exercise of the Options. “Fair Market Value” means,
as of any date, the value of Common Stock determined as follows:
(a) if the Common Stock is listed on a U.S. national securities
exchange, its Fair Market Value shall be either the mean of the
highest and lowest reported sale prices of the stock (or, if no
sales were reported, the average of the closing bid and asked
price) or the last reported sale price of the stock, as determined
by the Administrator in its discretion, on a U.S. national
securities exchange for any given day or, if not listed on such
exchange, on any other national securities exchange on which the
Common Stock is listed as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; (b) If the
Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a
Share of Common Stock shall be either the mean between the high bid
and low asked prices or the last asked price, as determined by the
Board for the Common Stock on any given day, as reported in The
Wall Street Journal or such other source as the Board deems
reliable; or (c) in the absence of an established regular public
market for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board pursuant to the reasonable
application of a reasonable valuation method in accordance with the
provisions of Section 409A of the Code and the regulations
thereunder and, with respect to an Incentive Stock Option, in
accordance with such regulations as may be issued under the
Code.
If the
tender of shares of Common Stock as payment of the Exercise Price
would result in the issuance of fractional shares of Common Stock,
the Company shall instead return the balance in cash or by check to
the Grantee. If the Options are exercised by any person or
persons other than the Grantee, the notice described in this shall
be accompanied by appropriate proof (as determined by the Board) of
the right of such person or persons to exercise the Options under
the terms of this Agreement. The Company shall issue and
deliver, in the name of the person or persons exercising the
Options, a certificate or certificates representing such Shares as
soon as practicable after notice and payment are received and the
exercise is approved.
(b) The
Options may be exercised in accordance with the terms of this
Agreement with respect to any whole number of Shares, but in no
event may an Options be exercised as to fewer than one hundred
(100) Shares at any one time, or the remaining Shares covered
by the Options if less than two hundred (200).
(c) The
Grantee shall have no rights of a stockholder with respect to
Shares to be acquired by the exercise of the Options until the date
of issuance of a certificate or certificates representing such
Shares. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock
certificate is issued. All Shares purchased upon the exercise
of the Options as provided herein shall be fully paid and
non-assessable.
(d) The
Grantee agrees that no later than the date as of which an amount
first becomes includible in his gross income for federal income tax
purposes with respect to the Options, the Grantee shall pay to the
Company, or make arrangements satisfactory to the Company regarding
the payment of, any federal, state, local or foreign taxes of any
kind required by law to be withheld with respect to such
amount. Withholding obligations may be settled with shares of
Common Stock, including Shares that are acquired upon exercise of
the Options. The obligations of the Company under this
Agreement shall be conditional on such payment or
arrangements.
6.
Non-Transferability. These
Options may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than (i) by
will or the laws of descent or distribution or (ii) pursuant
to a qualified domestic relations order (as defined in the Code or
Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder). These Options may be
exercised, during the lifetime of the Grantee, only by the Grantee,
his guardian or his legal representative, or by an alternate payee
pursuant to a qualified domestic relations order. Any attempt
to assign, pledge or otherwise transfer the Options or of any right
or privilege conferred thereby, or the sale or levy or similar
process upon the rights and privileges conferred hereby, shall be
void.
7.
Adjustment upon Changes in
Capitalization. If, during the term of this Agreement, there
shall be any merger, reorganization, consolidation,
recapitalization, stock dividend, special cash dividend, stock
split, reverse stock split, rights offering or extraordinary
distribution with respect to the Common Stock, or other change in
corporate structure affecting the Common Stock shall make or cause
to be made an appropriate and equitable substitution, adjustment or
treatment in the aggregate number, kind and Exercise Price of
Shares subject to these Options; provided, however, that in no event
shall the Exercise Price be adjusted below the par value of a share
of Common Stock, nor shall any fraction of a Share be issued upon
the exercise of the Option. Any securities, awards or rights issued
pursuant to this Section 7 shall be subject
to the same restrictions as the underlying Shares to which they
relate.
8.
Conditions upon Issuance
of Option. As a condition to the exercise of the Option, the
Company may require the Grantee to represent and warrant at the
time of any such exercise that the Shares are being purchased only
for investment and without any present intention to sell or
distribute such Shares if, in the opinion of legal counsel for the
Company, such a representation is required by any relevant
provision of law.
9.
Miscellaneous.
(a)
Successors. This
Agreement and all the terms and provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs and successors, except as
expressly herein otherwise provided.
(b)
Entire Agreement;
Modification. This Agreement contains the entire
understanding between the parties with respect to the matters
referred to herein.
(c)
Capitalized Terms;
Headings; Pronouns; Governing Law. The descriptive headings
of the respective sections and subsections of this Agreement are
inserted for convenience of reference only and shall not be deemed
to modify or construe the provisions which follow them. Any use of
any masculine pronoun shall include the feminine and vice-versa and
any use of a singular, the plural and vice-versa, as the context
and facts may require. The construction and interpretation of this
Agreement shall be governed in all respects by the laws of the
State of Delaware.
(d)
Notices. Each
notice relating to this Agreement shall be in writing and shall be
sufficiently given if delivered by registered or certified mail, or
by a nationally recognized overnight delivery service, with postage
or charges prepaid, to the address hereinafter provided in this
Section 9. Any
such notice or communication given by first-class mail shall be
deemed to have been given two business days after the date so
mailed, and such notice or communication given by overnight
delivery service shall be deemed to have been given one business
day after the date so sent, provided such notice or communication
arrives at its destination. Each notice to the Company shall be
addressed to it at its offices at 00000 Xxxxxxxxx Xxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxx, XX, 00000 (attention: Chief Financial
Officer), with a copy to the Secretary of the Company or to such
other designee of the Company. Each notice to the Grantee shall be
addressed to the Grantee at the Grantee’s address shown on
the signature page hereof.
(e)
Severability.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the
application thereof to any party or circumstance shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the minimal extent of such provision or the
remaining provisions of this Agreement or the application of such
provision to other parties or circumstances.
(f)
Counterpart
Execution. This Agreement may be executed in counterparts,
each of which shall constitute an original and all of which, when
taken together, shall constitute the entire document.
* *
*
IN WITNESS WHEREOF, the Company has
caused this Agreement to be duly executed by its officer thereunto
duly authorized, and the Grantee has executed this Agreement all as
of the day and year first above written.
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By: /s/ Xxxxxx X.
Xxxxxx
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Its: Chief
Executive Officer
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/s/ Xxxxx
Xxxxx
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Xxxxx
Xxxxx
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Address:
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EXHIBIT A
Original Grant Agreement
