STOCK OPTION AGREEMENT
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AGREEMENT made this day of , 1996, by and among Elcom Technologies
Corporation, a corporation organized under the laws of the Commonwealth of
Pennsylvania (hereinafter referred to as "ELCOM"), and , an individual
employee of ELCOM hereinafter referred to as "EMPLOYEE").
BACKGROUND
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WHEREAS; ELCOM's corporate charter currently permits ELCOM to issue up
to Twenty Million (20,000,000) shares of common stock; and
WHEREAS, as of the execution of this Agreement, ELCOM's total issued,
and outstanding shares of common stocks is approximately Thirteen Million five
hundred thousand (13,500,000) shares.
WHEREAS, ELCOM desires to grant to EMPLOYEE an option to purchase
shares of ELCOM Technologies Corporation's common stock.
NOW, THEREFORE, in consideration of the mutual promises herein and other
valuable considerations, ELCOM and EMPLOYEE agree as follows:
1. Prior Agreements. EMPLOYEE and ELCOM have previously entered into the
following Agreement:
EMPLOYEE agrees that any options to purchase Elcom Common Stock under any of the
above agreements listed in this Section 1 are hereby canceled and declared null
and void for all purposes whatsoever.
1. Grant of Options. Subject to all of the terms and conditions of this
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Agreement, ELCOM hereby grants to EMPLOYEE options to purchase a total of
Shares of ELCOM's common stock at the price of per share in accordance
with the following schedule:
Number of Shares Date Exercisable Expiration Date
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Any Options not exercised by the Expiration Date listed above shall be
terminated in full for all purposes whatsoever.
2.1 Sale of Company. In the event that a controlling interest (over 50%) of
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ELCOM is sold to a third party, other than the Public markets, EMPLOYEE may
exercise one hundred percent (100%) of all options granted under Section 2
herein. EMPLOYEE must exercise said options within sixty (60) days of
notification of the acquisition of a controlling interest by a third party. Any
Options not exercised by EMPLOYEE within this sixty (60) day period will
terminate in full upon expiration of said sixty (60) day period.
3. Termination of Employment. In the event that EMPLOYEE terminates
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employment with ELCOM for any reason whatsoever, including death or disability,
all Options to purchase ELCOM common stock granted under this Agreement shall
terminate in full and be declared null and void for all purposes whatsoever,
sixty (60) days subsequent to the date of EMPLOYEE's last day of active
employment with ELCOM. EMPLOYEE shall receive no further vesting of Options
under Section 2 herein, after EMPLOYEE's last day of active employment with
ELCOM.
4. Registration of Options. In the event that ELCOM makes an initial public
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offering (the"IPO") of its common stock pursuant to rules established by the
United States Securities and Exchange Commission and the NASDAQ stock exchange,
the options granted in Section 2 of this Agreement shall be registered with the
Securities and Exchange Commission pursuant to the following schedule:
Six (6) months after completion of the IPO..........25% (twenty five percent)
Eighteen (18) months after completion of the IPO....25% (twenty five percent)
Thirty (30) months after completion of the IPO......25% (twenty five percent)
Forty two (42) months after completion of the IPO...25% (twenty five percent)
5. Restrictions and Regulations. EMPLOYEE agrees that any Shares of
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ELCOM's common stock purchased under this Stock Option Agreement will be subject
to the restrictions and regulations outlined in this Agreement and that these
SHARES may be subject to further restrictions and regulations. Said
restrictions and regulations may be imposed at any time by ELCOM at the sole
discretion of ELCOM and without the approval of EMPLOYEE.
5.1 In addition to the aforementioned restrictions, EMPLOYEE agrees that any
Shares purchased by EMPLOYEE pursuant to this Agreement, shall be subject to all
of the restrictions, regulations and non-dilution provisions of the ELCOM
Private Placement Memorandum dated, July 12, 1996.
6. Exercise of Option EMPLOYEE may exercise any Options earned in
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accordance with Section 2, herein, in any number that EMPLOYEE elects.
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7. Adjustment of Option Shares. Prior to any public offering of ELCOM
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shares, if the outstanding common shares of Elcom Technologies Corporation, are
changed into or exchanged for a different number or kind of shares or other
securities of Elcom Technologies Corporation or of another corporation, whether
through reorganization, share split-up, combination of shares, merger or
consolidation, then these shares shall be substituted for each common share of
Elcom Technologies Corporation then subject to this Stock Option Agreement. The
number and kinds of shares or other securities into which each such ELCOM share
is so changed or for which each ELCOM share is exchanged shall be at the sole
discretion of ELCOM.
8. Time For Payment For Shares. The option price of the Shares to be
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purchased pursuant to the exercise of Options under this Agreement shall be paid
in full at the time of the exercise of the options.
9. Method of Exercising Option. EMPLOYEE shall provide ELCOM
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with at least five (5) business days prior written notice in order to exercise
any options under this Agreement. EMPLOYEE shall comply with all procedures
established by ELCOM from time to time concerning exercising any options under
this Agreement.
10. Modification. This Agreement shall be effective as of the date hereof
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and, unless sooner terminated under the provisions of this Agreement, shall
remain in effect until December 31, 2002. No modification or amendment of this
Agreement shall be effective unless in writing and signed by the parties hereto.
11. Notices. All notices or other communications required or
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permitted to be given under the terms of this Agreement shall be in writing,
delivered personally, or sent via certified mail, postage prepaid, return
receipt requested.
12. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto and supersedes all prior negotiations,
understandings and agreements of any nature with respect to the subject matter
hereto. No amendment, waiver or discharge of any of the provisions of this
Agreement shall be effective against any part, unless that party shall have
consented thereto in writing.
13. Binding Effect. This Agreement shall be binding upon execution
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by ELCOM and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors, and assigns.
14. Governing Law. This Agreement shall be construed, interpreted
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and enforced in accordance with the laws of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, ELCOM and EMPLOYEE have set their hands and seals
hereto the day and year first above written.
ATTEST: Elcom Technologies Corporation
BY:
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Xxxxxx X. Xxxxx, Secretary Xxxxxx X. Xxxx, President
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EMPLOYEE
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