NON-QUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of this 10th day of December, 1996, by and
between DAEDALUS ENTERPRISES, INC., a Delaware corporation (the "Company"),
and XXXXXXX X. XXXXXXX (the "Optionee").
WHEREAS, the Optionee presently serves as an employee of the
Company, and the Company desires to compensate further the Optionee for the
services performed as an employee and to encourage the Optionee to remain as
an employee of the Company; and as an inducement thereto the Company has
determined to grant to the Optionee an option to acquire shares of voting
stock in the Company;
NOW, THEREFORE, it is agreed between the parties as follows:
1. Grant of Option. Subject to the terms and conditions
hereof, the Company hereby grants to the Optionee the right and option to
purchase from the Company up to 20,000 shares of the Company's common stock,
par value $.01 per share (the "Common Stock"), at $2.25 per share (the
"Exercise Price").
2. Exercise of Option. During the period commencing on
December 10, 1996 and ending on December 9, 1997 ("Option Period I"), the
Optionee shall have the right to purchase, at the Exercise Price, up to
10,000 shares of Common Stock. During the period commencing on December 10,
1997 and ending on December 10, 2006 ("Option Period II"), the Optionee
shall have the right to purchase, at the Exercise Price, up to 20,000 shares
of Common Stock less any shares of Common Stock purchased during Option
Period I pursuant to the terms of this Agreement. The Optionee shall
exercise the option by delivering to the Company: (a) a written notice in
the form of Exhibit A attached hereto signed by the Optionee and (b) payment
of the total option price, which shall be the Exercise Price multiplied by
the number of shares to be purchased (the "Total Option Price"), in the form
of cash, certified check, bank draft, or money order in an amount equal to
the Total Option Price of the shares then to be purchased pursuant to this
Agreement. Within five (5) days after receipt of the foregoing, the Company
shall issue the shares in the name of the Optionee and deliver the
certificates therefor to the Optionee. If the Optionee fails to pay for all
or any part of the number of shares specified in the written notice or fails
to accept delivery of same upon tender of delivery thereof, the Optionee's
right to exercise his option with respect to such undelivered shares may be
terminated by the Company.
Anything to the contrary herein notwithstanding, the Company's
obligation to sell and deliver stock under this Agreement is subject to
compliance with federal and state laws, rules and regulations applying to
the authorization, issuance or sale of securities, and applicable stock
exchange and automated quotation system requirements as the Company deems
necessary or advisable. The Company shall not be required to sell and
deliver stock pursuant hereto unless and until it receives proof
satisfactory to it that the issuance or transfer of such shares will not
violate any of the provisions of the Securities Act of 1933 or the
Securities Exchange Act of 1934 or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, or the rules and
regulations of any stock exchange or automated quotation system on which the
Company's securities are traded or quoted, or the provisions of any state
law governing the sale of securities, or that there has been compliance with
the provisions of such acts, rules, regulations and state laws.
3. Effect of Termination of Employment or Death. If, prior
to the date that this option shall first become exercisable, the Optionee's
employment with the Company and its subsidiaries shall be terminated, with
or without cause, or by the act, death, permanent disability, or retirement
of the Optionee, the Optionee's right to exercise this option shall
terminate and all rights hereunder shall cease.
If, on or after the date that this option shall first become
exercisable, the Optionee's employment with the Company and its subsidiaries
shall be terminated by reason of the Optionee's retirement at or after the
normal retirement date, the Optionee shall have the right, within two years
after such termination of employment, to exercise this option to the extent
that it shall have been exercisable and unexercised on the date of such
termination of employment, subject to any other limitation on the exercise
of this option in effect at the date of exercise.
If termination of employment is for any reason other than death,
disability or retirement, the Optionee shall have the right, for one year
after such termination of employment, to exercise this option to the extent
that it shall have been exercisable and unexercised on the date of such
termination of employment, subject to any other limitation on the exercise
in effect at the date of exercise.
If this option shall have become exercisable during the Optionee's
term of employment and the Optionee shall die while in the employ of the
Company or terminate his employment due to disability (within the meaning of
Section 22(e) of the Internal Revenue Code of 1986), the Optionee or the
executor or administrator of the estate of the Optionee (as the case may be)
or the person or persons to whom the option shall have been transferred by
will or the laws of descent and distribution, shall have the right, for one
year after the date of the Optionee's death, or the date of his termination
of employment due to disability, to exercise the option to the extent that
it was exercisable and unexercised on the date of death or termination of
employment (as the case may be), subject to any other limitation on the
exercise in effect at the date of exercise.
The transfer of Optionee from one corporation to another among the
Company and any of its subsidiaries, or a leave of absence with the written
consent of the Company, shall not be a termination of employment for
purposes of this Agreement.
4. Change of Control. Every other provision hereof
notwithstanding, if a "change of control" of the Company occurs prior to the
termination of Option Period II, then the Optionee shall have the right to
purchase, at the Exercise Price and through one transaction to occur on a
date fixed by the Company, up to 20,000 shares of Common Stock less any
shares of Common Stock previously purchased pursuant to the terms of this
Agreement.
As used herein, a "change of control" shall mean (i) receipt by the
Company of a Schedule 13(d) Report as filed with the Securities and Exchange
Commission confirming that a person or group other than the Company or a
wholly-owned subsidiary of the Company, owns beneficially more than 35% of
the outstanding Common Stock, (ii) any purchase under a tender or exchange
offer for the Common Stock other than by the Company or a wholly-owned
subsidiary of the Company following which the offeror owns beneficially more
than 35% of the outstanding Common Stock (iii) shareholder approval of any
merger, consolidation or sale of all or substantially all of the Company's
assets to or into any person or entity other than a wholly-owned subsidiary
of the Company formed for the purpose of changing the Company's corporate
domicile, and/or (iv) a change in the identity of a majority of the members
of the Board of Directors within any twelve-month period, which change or
changes are not recommended by the incumbent directors immediately prior to
any such change or changes.
Notwithstanding the foregoing, no portion of an option held by the
Optionee shall be entitled to acceleration if the exercise or surrender
thereof by the Optionee upon acceleration will result (taking into account
all other payments made or to be made to the Optionee by the Company in the
nature of compensation) in an "excess parachute payment" under Section 280G
of the Internal Revenue Code. The Company's good faith determination as to
the existence of an excess parachute payment shall be final and binding on
the Optionee.
5. Investment Representation. The Optionee represents that,
unless a registration statement under the Securities Act of 1933 is in
effect with respect to the shares of Common Stock acquired upon exercise of
this option, all of such shares will be acquired solely for his own account,
for investment purposes and not with a view to any further sale or
distribution thereof. All certificates representing any option shares
subject to the provisions of this Agreement shall have endorsed thereon the
following legends:
(a) "THE SHARES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAW AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH SUCH LAWS."
(b) Any legend required to be placed thereon under
any applicable state or Federal securities law or any other agreement to which
the Optionee and the Company may be a party.
6. Non-Assignability. Neither this option nor any part
hereof may be transferred by the Optionee other than by will or the laws of
descent and distribution. The option may be exercised during the Optionee's
lifetime only by the Optionee. Any transferee of this option shall take the
option subject to the terms and conditions hereof. No such transfer of this
option shall be effective to bind the Company unless the Company shall have
been furnished with (i) written notice thereof and (ii) a copy of the will
and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of this Agreement. No assignment or
transfer of this Agreement, or of the right represented thereby, whether
voluntary or involuntary, by operation of law or otherwise, except a
transfer by the Optionee by will or by the laws of descent and distribution,
shall vest in the purported assignee or transferee any interest or right
whatsoever.
7. Disputes. As a condition of the granting of the option
granted hereby, the Optionee and the Optionee's successors and assigns agree
that any dispute or disagreement which shall arise under or as a result of
this Agreement shall be determined by the Board of Directors of the Company
in their sole discretion and judgment and that any such determination and
any interpretation by the Board of Directors of the Company of the terms of
this Agreement shall be final and shall be binding and conclusive for all
purposes.
8. Adjustments. The number of shares of the Common Stock
subject to the option granted hereby and the Exercise Price, shall be
appropriately adjusted for any increase or decrease in the number of
outstanding shares of Common Stock resulting from payment of a stock
dividend on Common Stock, a subdivision or combination of shares of Common
Stock, or reclassification of Common Stock, and (in accordance with the
provisions contained in the next following paragraph) in the event of a
merger or consolidation in which the Company shall be the surviving
corporation.
After any merger of one or more corporations into the Company, or
after any consolidation of the Company and one or more corporations in which
the Company shall be the surviving corporation, the Optionee shall, at no
additional cost, be entitled upon any exercise of this option to receive
(subject to any required action by shareholders), in lieu of the number of
shares of Common Stock as to which this option shall then be so exercised,
the number and class of shares of stock or other securities to which the
Optionee would have been entitled pursuant to the terms of the agreement of
merger or consolidation if at the time of such merger or consolidation the
Optionee had been a holder of record of a number of shares of Common Stock
equal to the number of shares as to which this option shall then be so
exercised. Comparable rights shall accrue to the Optionee in the event of
successive mergers or consolidations of the character described above. Any
such adjustment shall eliminate any fractional share which might otherwise
become subject to an option.
The foregoing adjustments, and their application to particular
circumstances, shall be determined by the Company in its sole discretion.
9. Rights as Shareholder. The Optionee shall have no rights
as a shareholder of the Company with respect to any of the shares of Common
Stock covered by this Agreement until a stock certificate or stock
certificates are issued upon the proper exercise of this option, in full or
in part, and then the Optionee shall have shareholder rights only with
respect to the shares represented by such certificate or certificates. No
adjustment shall be made for dividends or other rights with respect to such
shares for which the record date is prior to the date such certificate or
certificates are issued.
10. Withholding Taxes. The Company shall have the right to
require a payment from the Optionee to cover applicable withholding for
income and employment taxes upon the exercise of all or a part of the option
granted hereunder.
11. Notices. Every notice relating to this Agreement shall
be in writing and if given by mail shall be given by registered or certified
mail with return receipt requested. All notices to the Company shall be
delivered to the President personally or addressed to the President of the
Company at its principal office at 000 Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx
00000. All notices by the Company to the Optionee shall be delivered to the
Optionee personally or addressed to the Optionee at the Optionee's last
residence address as then contained in the records of the Company or such
other address as the Optionee may in writing designate. Either party may be
written notice to the other party designate a different address to which
notices shall be addressed. Any notice given by the Company to the Optionee
at the Optionee's last designated address shall be effective to bind any
other person who shall acquire rights hereunder.
12. "Optionee" to Include Certain Transferees. Whenever the
word "Optionee" is used in any provision of this Agreement under
circumstances where the provision should logically apply to any other person
or persons to whom this Agreement, in accordance with the provision of
Section 6 hereof, may be transferred, the word "Optionee" shall be deemed to
include such person or persons.
13. Effect on Employment. Neither the execution of this
Agreement nor the granting of any option pursuant to it shall be deemed to
create any right in the Optionee to be retained or continued in the
employment of the Company or any of its subsidiaries.
14. Governing Law. This Agreement has been made in Michigan
and shall be construed in accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
DAEDALUS ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Its: President and Chief Executive
Officer
/s/ Xxxxxxx X. Xxxxxxx
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OPTIONEE - Xxxxxxx X. Xxxxxxx
EXHIBIT A
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
President
Daedalus Enterprises, Inc.
000 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000-0000
An Option was granted to me on December 10, 1996 to purchase 20,000
shares of Daedalus Enterprises, Inc. Common Stock at a price of $2.25 per
share (the "Option").
I hereby elect to exercise the Option with respect to shares.
A certified check (or cash, money order, or bank draft) in the amount of the
exercise price is enclosed herewith.
I authorize the Company to withhold from my compensation or agree to
tender the applicable amount to the Company to satisfy any requirements for
withholding of income and employment tax due to my exercise of this option.
I hereby represent that the shares of Common Stock that I am
purchasing upon this exercise of my option are being purchased for
investment purposes and not with a view to resale. This representation
shall not be binding upon me if the shares of Common Stock that I am
purchasing are subject to an effective registration statement under the
Securities Act of 1933.
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Optionee - Xxxxxxx X. Xxxxxxx
Dated:
