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EXHIBIT 10.24
TRIPLICATE ORIGINAL
September 30, 1999
NONQUALIFIED STOCK OPTION AGREEMENT
A STOCK OPTION for a total of 150,000 shares of common stock
(hereinafter the "Option"), of N(2)H(2), Inc., a Washington corporation (the
"Company"), is hereby granted to Xxxxxxx X. Xxxxxxx (the "Optionee"), at the
price and subject to the terms and provisions set forth below. For purposes of
this Agreement the term "shares" shall be deemed to apply to shares of common
stock of the Company as of the date hereof.
1. OPTION PRICE. The option price is $10.3125 for each share, being one
hundred percent (100%) of the fair market value, as determined by the Board of
Directors, of the Company's Common Stock on September 30, 1999, the date of
grant.
2. VESTING AND EXERCISE OF OPTION. The Option shall vest and be
exercisable in accordance with the following provisions:
a. Schedule of Vesting and Rights to Exercise. The Option shall
be vested and exercisable as follows:
Years Percent of Number of
Following Grant Option Vested Shares Exercisable
--------------- ------------- ------------------
After One Year 25% 37,500
After Two Years 50% 75,000
After Three Years 75% 112,500
After Four Years 100% 150,000
b. Method of Exercise. The Option shall be exercisable by a
written notice which shall:
i. state the election to exercise the Option, the number of
shares in respect of which it is being exercised;
ii. contain such representations and agreements as to the
holder's investment intent with respect to such shares of common stock,
acquired by exercise of the Option, as may be satisfactory to the
Company;
iii. be signed by the person entitled to the Option; and
iv. be in writing and delivered in person or by certified mail
to the President or Secretary of the Company.
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Payment of the purchase price of any shares with respect to which an
Option is being exercised shall be by check. The certificate or certificates for
shares of common stock as to which the Option shall be exercised shall be
registered in the name of the person exercising the Option. Options hereunder
may not at any time be exercised for a fractional number of shares.
c. Restrictions on Exercise. No Option may be exercised if the
issuance of the shares upon exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to the exercise of this Option the Company may require the person
exercising the Option to make any representation and warranty to the Company as
the Company's counsel believes may be required by any applicable law or
regulations.
The following legend will appear on all certificates for option
shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE ACQUIRED BY THE
REGISTERED HOLDER PURSUANT TO REPRESENTATION THAT THE HOLDER IS
ACQUIRING THESE SHARES FOR THE HOLDER'S OWN ACCOUNT, FOR INVESTMENT.
THESE SHARES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN
EXEMPTION FROM SUCH REGISTRATION STATEMENT.
3. Non-Transferability of Option. Except as otherwise provided herein,
no Option may be sold, pledged, assigned or transferred in any manner, other
than by will or the laws of descent and distribution, and may be exercised
during the lifetime of the Optionee only by the Optionee or by the guardian or
legal representative of the Optionee. The terms of the Option shall be binding
upon the executors, administrators, heirs, successors, and assigns of the
Optionee.
4. Termination of Service to Company. An Option may only be exercised,
to the extent vested on the employee's last day of service to the Company as an
employee, for a period of one hundred (100) days after such last day of service,
but in no event later than ten (10) years after its grant.
5. Term of Option. No Option may be exercised more than ten (10) years
from the date of original grant, and may be exercised during such term only in
accordance with the terms of this agreement.
6. Adjustments Upon Changes in Capitalization. The number and kind of
shares of common stock subject to this Option shall be appropriately adjusted
along with a corresponding adjustment in the Option price to reflect any stock
dividend, stock split, split-up or any combination, exchange or change of
shares, however accomplished.
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7. Accelerated Vesting. Notwithstanding any provision to the contrary,
in the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or Shares by
means of a sale, reorganization, liquidation, or otherwise, this Option shall
become immediately exercisable with respect to the full number of Shares subject
to this Option. If this Stock Option is not exercised prior to consummation of
any such agreement, it shall terminate. In addition, this Option shall vest and
become exercisable upon certain terminations of employment as set forth in that
certain Executive Employment Agreement of even date herein between the Optionee
and the Company
DATED: September 30, 1999 N(2)H(2), Inc.
By /s/ XXXXX XXXXXXXXX
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Xxxxx Xxxxxxxxx
President
Optionee acknowledges and represents that he is familiar with the terms
and provisions of this Nonqualified Stock Option Agreement as set forth above
and hereby accepts this Option subject to all the terms and provisions hereof.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
of the Compensation Committee of the Company's Board of Directors with respect
to the interpretation of any provision under this Nonqualified Stock Option
Agreement.
DATED: September 30, 1999
/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, Optionee
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