TITAN ENERGY WORLD WIDE, INC. STOCK OPTION AGREEMENT
Exhibit
4.1
Grant
No. 2009- ______
TITAN
ENERGY WORLD WIDE, INC.
2009
OMNIBUS STOCK INCENTIVE PLAN
This
Stock Option Agreement (the "Option Agreement") is made and
entered into as of the date of grant set forth below (the "Date of Grant") by and between
Titan Energy Worldwide, Inc., a Nevada corporation (the "Company"), and the Optionee
named below (the "Optionee"). Capitalized
terms not defined herein shall have the meaning ascribed to them in the
Company's 2009 Omnibus Stock Incentive Plan (the "Plan").
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Name
of Optionee:
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_________________________________
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Social
Security No.:
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_________________________________
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Address:
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_________________________________
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_________________________________
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_________________________________
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Shares
Subject to Option:
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_________________________________
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Exercise
Price Per Share:
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_________________________________
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Date
of Grant:
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_________________________________
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Vesting
Commencement
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1
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Date:
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_________________________________
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Expiration
Date:
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_________________________________
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Type
of Stock Option
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(Check
one):
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¨
Incentive Stock Option
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x
Non-Qualified Stock Option
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(a) Subject
to Section 5 below, the Option shall vest as to twenty-five (25%) of the Option
Shares on the anniversary of the Vesting Commencement Date, and as to an
additional 1/48 of the Option Shares on the last day of each of the next
thirty-six (36) months following such anniversary; provided, however, that in
the event Optionee's employment is terminated by the Company without Cause (as
defined in Section 5 hereof) or by Optionee for Good Reason (as defined below)
within twelve (12) months following a Change in Control of the Company, 100% of
the Option Shares shall immediately vest and become fully
exercisable.
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For
purposes of this Option Agreement, "Good Reason" shall mean the
occurrence of any of the following events without Optionee's prior written
consent: (i) a termination without Cause by the Company or any Parent or
Subsidiary or successor thereof, as appropriate; (ii) a material reduction in
Optionee's job responsibilities, provided that neither a mere change in title
alone nor reassignment following a Change of Control to a position that is
substantially similar to the position held prior to the Change in Control shall
constitute a material reduction in job responsibilities; (iii) a reduction in
Optionee's then-current base salary, provided that an across-the-board reduction
in the salary level of all other employees or consultants in positions similar
to Optionee's by the same percentage amount as part of a general salary level
reduction shall not constitute such a salary reduction; (iv) requiring Optionee
to relocate to a facility or location more than 50 miles from the Company's
location at the time of the Change in Control, provided that required travel on
corporate business to an extent consistent with the Optionee's job
responsibilities shall not constitute a forced relocation.
For purposes of this
Option Agreement, a "Change in Control" of the Company shall be deemed to occur
as of such time of "Change in Control"
means the first to occur of any one of the events set forth in the following
paragraphs, provided
that a Public Offering shall not constitute a Change in Control:
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(i)
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any
Person is or becomes the "Beneficial Owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such Person
any securities acquired directly from the Company) representing 50% or
more of the Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction
described in clause (A) of paragraph (iii) hereof;
or
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(ii)
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the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the effective date
of a Public Offering, constitute the Board of Directors of the Company and
any new director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board of
Directors or nomination for election by the Company's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the Effective
Date or whose appointment, election or nomination for election was
previously so approved or recommended;
or
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(iii)
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there
is consummated a merger or consolidation of the Company with any other
corporation other than (A) merger or consolidation which results in the
directors of the Company immediately prior to such merger or consolidation
continuing to constitute at least a majority of the board of directors of
the Company, the surviving entity or any parent thereof, or (B) a merger
or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including
in the securities Beneficially Owned by such Person any securities
acquired directly from the Company) representing 50% or more of the
combined voting power of the Company's then outstanding securities;
or
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(iv)
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the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the
sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all
or substantially all of the Company's assets to an entity at least a
majority of the board of directors of which comprises individuals who were
directors of the Company immediately prior to such sale or
disposition.
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For the purposes of this
Option Agreement, the term "Person" shall have the meaning given in
Section 3(a)(9) of the Securities Exchange Act of 1934 (as amended), as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
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(b) Notwithstanding
anything to the contrary herein, this Option may not be exercised for vested
Option Shares until the earlier of (i) January 1, 2011 or (ii) the date the
Company consummates an initial underwritten public offering of its equity
securities pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended (the "Securities Act") (either,
hereinafter referred to as the "First Exercise Date"), at
which time the right of the Optionee to purchase Option Shares with respect to
which this Option has become vested may be exercised in whole or in part at any
time or from time to time prior to expiration of the Option Term; provided, however, that the
Option may not be exercised for a fraction of a Share.
(a) The
Option may be exercised by delivering to the Company an executed stock option
exercise agreement in the form attached hereto as Exhibit A, or in such
other form as may be approved by the Administrator from time to time (the "Exercise Agreement"), which
shall set forth, inter alia, (i) Optionee's
election to exercise the Option, (ii) the number of shares of Common Stock being
purchased and (iii) any representations, warranties and agreements regarding
Optionee's investment intent and access to information as may be required by the
Company to comply with applicable securities laws, and payment in full of the
aggregate Exercise Price of the shares being purchased. If someone
other than the Optionee exercises the Option, then such person must submit
documentation reasonably acceptable to the Company verifying that such person
has the legal right to exercise the Option.
(b) The
Option may not be exercised unless the stockholders of the Company have approved
the Plan and such exercise is in compliance with all applicable federal and
state securities law, as they are in effect on the date of
exercise.
(c) Payment
of the aggregate Exercise Price for Option Shares being purchased and any
applicable withholding taxes may be made (i) in cash or by check, (ii) by means
of a cashless exercise procedure either through a broker or, at the discretion
of the Administrator, through withholding of shares of Common Stock otherwise
issuable upon exercise of the Option in an amount sufficient to pay the
aggregate Option Exercise Price and/or any applicable withholding taxes, (iii)
in the form of unrestricted Shares already owned by the Optionee which, (x) in
the case of unrestricted Shares acquired upon exercise of an option, have been
owned by the Optionee for more than six months on the date of surrender, and (y)
have an aggregate Fair Market Value on the date of surrender equal to the
aggregate Exercise Price of the Shares as to which such Option shall be
exercised, or (iv) by any other means of exercise authorized from time to time
in the Plan and/or by the Board.
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(a) In
the event of Optionee's termination of employment or service with the Company or
any Parent or Subsidiary for "Cause" (as defined below), the
Option shall immediately terminate in full as of the Termination
Date. For purposes of this Agreement, Cause shall mean the occurrence
of any of the following events, as determined by the Committee in its sole and
absolute discretion and which determination shall be final: (i)
Optionee's conviction of or plea of guilty or nolo contendere to the commission
of an act or acts constituting a felony under the laws of the United States or
any state thereof, (ii) action by Optionee toward the Company or any Parent or
Subsidiary involving personal dishonesty, theft or fraud in connection with
Optionee's duties as an employee of or consultant to the Company or any Parent
or Subsidiary, (iii) Optionee's willful failure to abide by or follow
lawful directions of the Company or any Parent or Subsidiary or (iv) breach by
Optionee of Section 6 of this Option Agreement.
(b) In
the event of Optionee's termination of employment or service with the Company or
any Parent or Subsidiary for any reason other for Cause or as a result of
Optionee's death or Disability, any portion of the Option that has vested as of
the Termination Date shall be exercisable in whole or in part until the later of
(i) ninety (90) days following the Termination Date or (ii) ninety (90) days
following the First Exercise Date; provided, however, that in no
event may the Option be exercised after the Expiration Date. Upon
expiration of such 90-day period, any unexercised portion of the Option shall
terminate in full.
(c) In
the event of Optionee's termination of employment or service with the Company or
any Parent or Subsidiary as a result of Optionee's death or Disability, any
portion of the Option that has vested as of the Termination Date shall be
exercisable in whole or in part any portion until the later of (i) one (1) year
following the Termination Date or (ii) one (1) year following the First Exercise
Date; provided,
however, that
in no event may the Option be exercised after the Expiration
Date. Upon expiration of such one-year period, any unexercised
portion of the Option shall terminate in full.
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(a) competes
with, or engages in any business that is competitive with the Company or any
Parent or Subsidiary, as applicable, within 250 miles of any location at which
Optionee was employed by or provided services to the Company or any Parent or
Subsidiary;
(b) solicits
or accepts any business or employment from any person or entity that is, or any
time within the preceding two years was solicited to become, a customer of the
Company or any Parent or Subsidiary, as applicable;
(c) recruits,
solicits, discusses employment with, or assists any person or entity in
recruiting any person who is, or at any time within the preceding one year was,
an employee of the Company or any Parent or Subsidiary; or
(d) discloses
to any unauthorized person or entity, or uses, licenses, sells, conveys or
otherwise exploits in competition with the Company or any Parent or Subsidiary
or otherwise for the benefit of any person or entity other than the Company or
any Parent or Subsidiary, any information proprietary to, used by, or in the
possession of the Company or any Parent or Subsidiary or any of their customers
and not generally known in the industry which is disclosed to or learned by
Optionee while employed by the Company or any Parent or Subsidiary or
thereafter, whether or not reduced to writing and whether or not conceived,
originated, discovered, or developed in whole or in part by
Optionee.
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If any
provision of this Section 6 should be found by any court of competent
jurisdiction to be unreasonable by reason of its being too broad as to the
period of time, territory, and/or scope, then, and in that event, such provision
shall nevertheless remain valid and fully effective, but shall be considered to
be amended so that the period of time, territory, and/or scope set forth shall
be changed to be the maximum period of time, the largest territory, and/or the
broadest scope, as the case may be, which would be found reasonable and
enforceable by such court.
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If
to Company:
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Titan
Energy Worldwide
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0000
Xxxx Xxxxxx Xx.
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Xxxxxxxxxx,
XX 00000
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Attn: Xxxx
Xxxxxx
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If
to the Optionee:
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Name:
_____________________
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Address:
___________________
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City/ST
____________________
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Either
party hereto may change such party's address for notices by notice duly given
pursuant hereto.
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If
the Shares are held for more than one (1) year after the date of the transfer of
the Shares pursuant to the exercise of an ISO and are disposed of more than two
(2) years from the Date of Grant, any gain realized on the disposition of such
Shares will be treated as long term capital gain for Federal income tax
purposes. If the Shares being purchased upon exercise of an ISO are
disposed of prior to the expiration of two years from the Date of Grant or
within one year from the date transfer of the Shares pursuant to the exercise of
an ISO (a "Disqualifying
Disposition"), Optionee will realize ordinary income at the time of the
disposition in an amount equal to the excess, if any, of the aggregate Fair
Market Value of the Shares at the time of exercise (or, if less, the amount
realized on such disqualifying disposition) over the aggregate Exercise price of
the Shares being purchased, and (ii) any additional gain will be subject to tax
as short-term or long-term capital gain. In such case, the Company
may claim a deduction for Federal income tax purposes at the time of such
Disqualifying Disposition for the amount taxable to Optionee as ordinary
income.
Optionee
will recognize a capital gain or capital loss upon the disposition of the Shares
acquired upon exercise of a Non-Qualified Stock Option ("NSO") in an amount equal to
the difference between the aggregate Fair Market Value of such Shares on the
date it was acquired and the amount realized in the disposition. Such
gain or loss will be long-term if the stock has been held for more than one
year.
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THE
SECURITIES EVIDENCED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES THEREUNDER, AND MAY NOT BE
SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION
OR AN EXEMPTION THEREFROM.
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS
ASSIGNEE(S). SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL
ARE BINDING ON TRANSFEREES OF THESE SHARES.
Further,
if the Company decides, in its sole discretion, that the listing or
qualification of the Option Shares under any securities or other applicable law
is necessary or desirable, the Option shall not be exercisable, in whole or in
part, unless and until such listing or qualification, or a consent or approval
with respect thereto, shall have been effected or obtained free of any
conditions not acceptable to the Company.
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20. Governing
Law. This Option Agreement shall be governed by and construed
according to the laws of the State of Minnesota without regard to its principles
of conflict of laws.
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By
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Name
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Title
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The
Optionee
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EXHIBIT
A
NOTICE
OF EXERCISE
______________,
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0000 Xxxx
Xxxxxx Xx.
Xxxxxxxxxx,
XX 00000
Attn: Secretary
On April
30, 2009, I was granted an option (an "Option") by Diverse Networks,
Inc. (the "Company") under the Company's 2007 Omnibus Stock Incentive Plan (the
"Plan") and a stock option agreement, between myself and the Company, dated as
of [____________] (the "Agreement"). This
letter is to notify you that I wish to purchase Option Shares under the
Agreement as set forth below.
1. I
wish to purchase Option Shares
at the current exercise price of $0.10 per share for a total cost of
$_________.
2. I
am paying for these Option Shares as follows:
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By
enclosing cash and/or a certified or cashier's check payable to the
Company in the amount of $______.
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3. I
am paying the local, state and federal withholding taxes and/or all other taxes
that the Company has advised me are due as follows:
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By
enclosing cash and/or a certified or cashier's check payable to the
Company in the amount of $______.
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By
authorizing the Company to withhold from the number of Option Shares I
would otherwise receive that number of Shares having a fair market value
equal to the minimum tax withholding
due.
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4. In
exercising my Option I hereby warrant and represent to the Company
that:
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A.
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I
have no contract, undertaking, agreement, or arrangement with any person
to sell or transfer to such person or to any third person any of the
Option Shares (other than any pledge or similar agreement entered into to
facilitate the exercise of the Option) and, I am acquiring such Option
Shares for investment only and not with a view toward
distribution.
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B.
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I
acknowledge that the Company has no obligation to issue a certificate
evidencing any Option Shares purchasable by me until the purchase price of
such Option Shares is fully paid as set forth in the Option
Agreement.
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| Very truly yours, | |
| Optionee | |
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Name
and Address (please print)
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Telephone
Number
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(
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Social
Security Number
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