NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the 15th day of December (the "Date of Grant") between
Commodore Applied Technologies, Inc., a Delaware corporation (hereinafter
referred to as the "Company"), and Bentley X. Xxxx, residing at 000 X. 00xx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX, 00000 (hereinafter referred to as the
"Director").
W I T N E S S E T H:
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WHEREAS, the Company desires, in accordance with its 1998 Stock Option Plan
(the "Plan"), to provide the Director with an opportunity to acquire Common
Stock, $0.001 par value (hereinafter referred to as "Common Stock"), of the
Company on favorable terms and thereby increase his proprietary interest in the
continued progress and success of the business of the Company;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Director hereby agree as follows:
1. Confirmation of Grant of Option. Pursuant to a determination by the
Board of Directors of the Company, the Company, subject to the terms of the Plan
and this Agreement, hereby grants to the Director as a matter of separate
inducement and agreement, and in addition to and not in lieu of salary or other
compensation for services, the right to purchase (hereinafter referred to as the
"Option") an aggregate of 70,000 shares of Common Stock, subject to adjustment
as provided in the Plan (such shares, as adjusted, hereinafter being referred to
as the "Shares"). The Option is not intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Purchase Price. The purchase price of shares of Common Stock covered by
the Option will be $0.4375 per share, subject to adjustment as provided in the
Plan.
3. Exercise of Option. (a) In accordance with the provisions of Section 21
hereof, by his execution and delivery hereof, the Director agrees to cancel all
prior options to acquire shares of Common Stock ("Prior Options"). The Option
shall be exercisable on the terms and conditions set forth and in accordance
with the vesting schedule applicable to the Prior Options, as though the Option
had been granted at the time of the grant of the Prior Options.
(b) The Option may be exercised pursuant to the provisions of this Section
3, by notice and payment to the Company as provided in Sections 9 and 14 hereof.
4. Term of Option. The term of the Option shall be a period of ten (10)
years from the Date of Grant, subject to earlier termination or cancellation as
provided in this Agreement.
This Option, to the extent unexercised, shall expire on the day immediately
prior to the tenth (10th) anniversary of the Date of Grant. The holder of the
Option shall not have any rights to dividends or any other rights of a
stockholder with respect to any shares of Common Stock subject to the Option
until such shares shall have been issued to him (as evidenced by the appropriate
entry on the books of the Company or a duly authorized transfer agent of the
Company) provided that the date of issuance shall not be earlier than the date
this Option is exercised and payment of the full purchase price of the shares of
Common Stock (with respect to which this Option is exercised) is made to the
Company.
5. Non-transferability of Option. The Option shall not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way, and
shall not be subject to execution, attachment or other process, except as may be
provided in the Plan. Any assignment, transfer, pledge, hypothecation or other
disposition of the Option attempted contrary to the provisions of the Plan, or
any levy of execution, attachment or other process attempted upon the Option,
will be null and void and without effect. Any attempt to make any such
assignment, transfer, pledge, hypothecation or other disposition of the Option
will cause the Option to terminate immediately upon the happening of any such
event; provided, however, that any such termination of the Option under the
foregoing provisions of this Section 5 will not prejudice any rights or remedies
which the Company or any Parent or Subsidiary may have under this Agreement or
otherwise.
6. Exercise Upon Termination of Service as a Director. If the Director at
any time ceases to be a Director of the Company by reason of his removal as a
Director, the Option shall, at the time of such removal, terminate and the
Director shall forfeit all rights hereunder. If, however, the Director for any
other reason (other than Disability or death) ceases to be such an Director, the
Option may, subject to the provisions of Section 5 hereof, be exercised by the
Director to the same extent the Director would have been entitled under Section
3 hereof to exercise the Option immediately prior to such the termination of his
services as a Director, at any time within 30 days after such termination, at
the end of which period the Option, to the extent not then exercised, shall
terminate and the Director shall forfeit all rights hereunder, even if the
Director subsequently serves as a Director of the Company. In no event, however,
may the Option be exercised after the expiration of the term provided in Section
4 hereof.
7. Exercise Upon Death or Disability. (a) If the Director dies while he is
a Director of the Company, the Option may, subject to the provisions of Section
5 hereof, be exercised with respect to all or any part of the shares of Common
Stock as to which the deceased Director had not exercised the Option at the time
of his death (regardless of whether the option was fully exercisable at such
time) by the estate of the Director (or by the person or persons who acquire the
right to exercise the Option by written designation of the Director) at any time
within 90 days after the death of the Director, at the end of which period the
Option, to the extent not then exercised, shall terminate and the estate or
other beneficiaries shall forfeit all rights hereunder. In no event, however,
may the Option be exercised after the expiration of the term provided in Section
4 hereof.
8. Registration. At the time of issuance, the shares of Common Stock
subject hereto and issuable upon the exercise hereof may not be registered under
the Securities Act of 1933, as amended, and, if required upon the request of
counsel to the Company, the Director will give a representation as to his
investment intent with respect to such shares prior to their issuance as set
forth in Section 8 hereof. The Company may register or qualify the shares
covered by the Option for sale pursuant to the Securities Act of 1933, as
amended, at any time prior to or after the exercise in whole or in part of the
Option.
9. Method of Exercise of Option. (a) Subject to the terms and conditions of
this Agreement, the Option shall be exercisable by notice in the manner set
forth in Exhibit A hereto (the "Notice") and provision for payment to the
Company in accordance with the procedure prescribed herein. Each such Notice
shall:
(i) state the election to exercise the Option and the number of Shares
with respect to which it is being exercised;
(ii) contain a representation and agreement as to investment intent,
if required by counsel to the Company with respect to such Shares, in a
form satisfactory to counsel to the Company;
(iii) be signed by the Director or the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person or
persons other than the Director, be accompanied by proof, satisfactory to
counsel to the Company, of the right of such other person or persons to
exercise the Option;
(iv) include payment of the full purchase price for the shares of
Common Stock to be purchased pursuant to such exercise of the Option; and
(v) be received by the Company on or before the date of the expiration
of this Option. In the event the date of expiration of this Option falls on
a day which is not a regular business day at the Company's executive office
in New York, New York then such written Notice must be received at such
office on or before the last regular business day prior to such date of
expiration.
(b) Payment of the purchase price of any shares of Common Stock, in respect
of which the Option shall be exercised, shall be made by the Director or such
person or persons at the place specified by the Company on the date the Notice
is received by the Company (i) by delivering to the Company a certified or bank
cashier's check payable to the order of the Company, (ii) if consented to by the
Company in writing, by delivering to the Company properly endorsed certificates
of shares of Common Stock (or certificates accompanied by an appropriate stock
power) with signature guaranties by a bank or trust company, (iii) by having
withheld from the total number of shares of Common Stock to be acquired upon the
exercise of this Option a specified number of such shares of Common Stock, (iv)
by any form of "cashless" exercise or (v) by any combination of the foregoing.
For purposes of the immediately preceding sentence, an
exercise effected by the tender of the Common Stock (or deemed to be effected by
the tender of Common Stock) may be consummated only with Common Stock (i) held
by the Director for six (6) months or (ii) acquired by the Director other than
under the Plan (or a similar plan maintained by the Company).
(c) The Option shall be deemed to have been exercised with respect to any
particular shares of Common Stock if, and only if, the preceding provisions of
this Section 9 and the provisions of Section 10 hereof shall have been complied
with, in which event the Option shall be deemed to have been exercised on the
date the Notice and related payment were received by the Company. Anything in
this Agreement to the contrary notwithstanding, any Notice given pursuant to the
provisions of this Section 9 shall be void and of no effect if all of the
preceding provisions of this Section 9 and the provisions of Section 10 shall
not have been complied with.
(d) The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised will be registered in the name of the Director (or
in the name of the Director's estate or other beneficiary if the Option is
exercised after the Director's death), or if the Option is exercised by the
Director and if the Director so requests in the notice exercising the Option,
will be registered in the name of the Director and another person jointly, with
right of survivorship and will be delivered as soon as practical after the date
the Notice is received by the Company (accompanied by full payment of the
exercise price), but only upon compliance with all of the provisions of this
Agreement.
(e) If the Director fails to accept delivery of and pay for all or any part
of the number of Shares specified in such Notice, his right to exercise the
Option with respect to such undelivered Shares may be terminated in the sole
discretion of the Committee. The Option may be exercised only with respect to
full Shares.
(f) The Company shall not be required to issue or deliver any certificate
or certificates for shares of its Common Stock purchased upon the exercise of
any part of the Option prior to the payment to the Company, upon its demand, of
any amount requested by the Company for the purpose of satisfying its liability,
if any, to withhold federal, state or local income or earnings tax or any other
applicable tax or assessment (plus interest or penalties thereon, if any, caused
by a delay in making such payment) incurred by reason of the exercise of this
Option or the transfer of shares thereupon. Such payment shall be made by the
Director in cash or, with the written consent of the Company, by tendering to
the Company shares of Common Stock equal in value to the amount of the required
withholding. In the alternative, the Company may, at its option, satisfy such
withholding requirements by withholding from the shares of Common Stock to be
delivered to the Director pursuant to an exercise of the Option a number of
shares of Common Stock equal in value to the amount of the required withholding.
10. Approval of Counsel. The exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to approval
by the Company's counsel of all legal matters in connection therewith,
including, but not limited to, compliance with the requirements of the
Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, and
the requirements of any stock exchange or automated trading medium upon which
the Common Stock may then be listed or traded.
11. Resale of Common Stock. (a) If so requested by the Company, upon any
sale or transfer of the Common Stock purchased upon exercise of the Option the
Director shall deliver to the Company an opinion of counsel satisfactory to the
Company to the effect that either (i) the Common Stock to be sold or transferred
has been registered under the Securities Act of 1933, as amended, and that there
is in effect a current prospectus meeting the requirements of Section 10(a) of
said Act which is being or will be delivered to the purchaser or transferee at
or prior to the time of delivery of the certificates evidencing the Common Stock
to be sold or transferred, or (ii) such Common Stock may then be sold without
violating Section 5 of said Act.
(b) The Common Stock issued upon exercise of the Option shall bear the
following (or similar) legend if required by counsel for the Company:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNLESS, IN THE OPINION OF COUNSEL FOR THE
COMPANY, SUCH REGISTRATION IS NOT REQUIRED.
12. Reservation of Shares. The Company shall at all times during the term
of the Option reserve and keep available such number of shares of the Common
Stock as will be sufficient to satisfy the requirements of this Agreement.
13. Limitation of Action. The Director and the Company each acknowledges
that every right of action accruing to him or it, as the case may be, and
arising out of or in connection with this Agreement against the Company, on the
one hand, or against the Director, on the other hand, shall, irrespective of the
place where an action may be brought, cease and be barred by the expiration of
three years from the date of the act or omission in respect of which such right
of action arises.
14. Notices. Each notice relating to this Agreement shall be in writing and
delivered in person, by recognized overnight carrier or by certified mail to the
proper address. All notices to the Company or the Committee shall be addressed
to them at 000 X. 00xx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attn: President. All
notices to the Director shall be addressed to the Director or such other person
or persons at the Director's address above specified. Anyone to whom a notice
may be given under this Agreement may designate a new address by notice to that
effect.
15. Benefits of Agreement. This Agreement shall inure to the benefit of the
Company, the Director and their respective heirs, executors, administrators,
personal representatives, successors and assigns.
16. Severability. In the event that any one or more provisions of this
Agreement shall be deemed to be illegal or unenforceable, such illegality or
unenforceability shall not affect the validity and enforceability of the
remaining legal and enforceable provisions hereof, which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.
17. Governing Law. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
18. Service as a Director. Nothing contained in this Agreement shall be
construed as (a) a contract of employment between the Director and the Company,
(b) as a right of the Director to continue as a Director of the Company beyond
the term for which he has been elected, or (c) as a limitation of the right of
the Company to remove the Director at any time, in accordance with applicable
law and the Company's by-laws.
19. Definitions. Unless otherwise defined herein, all capitalized terms
used in this Agreement shall have the same definitions as set forth in the Plan.
20. Incorporation of Terms of Plan. This Agreement shall be interpreted
under, and subject to, all of the terms and provisions of the Plan, which are
incorporated herein by reference.
21. Cancellation of Prior Option. By executing this Agreement the Director
hereby agrees that effective as of December 15, 1998, of all of his rights under
the Option(s) granted to him pursuant to the Amended and Restated Commodore
Applied Technologies, Inc. 1996 Stock Option Plan are hereby cancelled.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Date
of Grant set forth above.
Commodore Applied Technologies, Inc.
By: /s/ XXXX X. XXXXXXXXX
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Name: Xxxx X. Xxxxxxxxx
Title: Chairman of the Board
Name: Bentley X. Xxxx
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Social Security Number
ATTEST:
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EXHIBIT A
NON-QUALIFIED STOCK OPTION EXERCISE FORM
[DATE]
Commodore Applied Technologies, Inc.
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Attention: President
Dear Sirs:
Pursuant to the provisions of the Non-Qualified Stock Option Agreement
dated [ ] (the "Agreement"), whereby you have granted to me a Non-Qualified
Option (the "Option") to purchase up to [ ] shares of the Common Stock of [ ]
(the "Company") subject to the terms of the Agreement, I hereby notify you that
I elect to exercise my option to purchase [ ] of the shares of Common Stock
covered by such Option at the $0.4375 per share price specified therein. In full
payment of the price for the shares being purchased hereby, I am delivering to
you herewith (i) certified or bank cashier's check payable to the order of the
Company in the amount of $____________,(1) or (ii) a certificate or certificates
for [ ] shares of Common Stock of the Company, and which have a fair market
value as of the date hereof of $___________, [and a certified or bank cashier's
check, payable to the order of the Company, in the amount of
$________________].(2) Any such stock certificate or certificates are endorsed,
or accompanied by an appropriate stock power, to the order of the Company, with
my signature guaranteed by a bank or trust company or by a member firm of the
New York Stock Exchange. I hereby acknowledge that I am purchasing these shares
for investment purposes only and not for resale in violation of any federal or
state securities laws.
Very truly yours,
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[Address]
(For notices, reports, dividend
checks and other communications
to stockholders.)
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1 $_____________ of this amount is the purchase price of the shares, and the
balance represents payment of withholding taxes as follows: Federal
$_____________, State $_________ and Local $_______.
2 $_____________ of this amount is at least equal to the current market value
of one share of Common Stock of the Company, and the balance represents
payment of withholding taxes as follows: Federal $________, State $_______
and Local $______.
OPTION NO. _______________
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Commodore Applied Technologies, Inc.
1998 Stock Option Plan
NON-QUALIFIED STOCK OPTION
Granted To
Bentley X. Xxxx
Optionee
70,000 $0.4375
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Number of Shares Price per Share
DATE GRANTED: December 15, 1998 EXPIRATION DATE: December 14, 2008
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