Exhibit 10.17
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Option No. 50 Option to Purchase 100,000 Shares
CATEGORY 5 TECHNOLOGIES, INC.
Non-Qualified Stock Option Agreement
This Agreement (the "Agreement") dated February 25, 2002 is made between
Category 5 Technologies, Inc. (the "Company") and Xxxx Xxxxx (the "Optionee").
This Agreement confirms an award of a nonqualified stock option (the "Option")
covering 100,000 shares of Common Stock ($0.001 par value) which has been
granted to the Optionee under the Company's 2001 Stock Option Plan (the "Plan"),
a copy of which has been delivered to the Optionee. This award entitles the
Optionee to purchase the shares covered by this Option at a price of $2.50 per
share.
This Option has been granted for the purposes of encouraging the Optionee to
acquire ownership in the Company as an incentive to advance the Company's
interests and to continue in the Company's employ.
This Option is subject to the terms and conditions of the Plan and to the
Optionee's agreement to the terms and conditions set forth below. The option is
not intended to satisfy the requirements of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). All capitalized terms not otherwise
defined herein shall have the same meanings as set forth in the Plan.
1. Option Period. This Option shall remain in effect until February
25, 2007, subject to earlier expiration in the event that the
Optionee's employment with the Company terminates prior to such
date as provided for in Paragraph 3 of this Agreement.
2. Exercise Rights. Subject to Paragraph 1 of this Agreement, this
Option cannot be exercised until February 25, 2002, and then only
to the extent permitted by the following schedule and the other
terms and conditions governing this Option:
Cumulative Maximum
Number of Option
Date Shares Purchasable
2/25/02 25,000
2/25/03 25,000
2/25/04 25,000
2/25/05 25,000
Purchase of any or all of the shares covered by this Option must
occur no later than the expiration date provided for in Paragraph
1 of this Agreement.
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3. Continued Employment. Except as may otherwise be provided by the
Plan, this Option shall not be exercisable after:
(a) The Optionee's termination of employment for cause by the
Company. The term "cause" for this purpose shall mean:
(i) The refusal of the Optionee to implement or adhere
to lawful policies or directives of the Board of
Directors of the Company;
(ii) The conviction of the Optionee for committing a
felony under federal law or the law of the state
in which such action occurred;
(iii) Conduct which is in violation of Optionee's common
law duty of loyalty to the Company; or
(iv) Fraudulent conduct in connection with the business
affairs of the Company, regardless of whether said
conduct is designed to defraud the Company or
others.
The existence of cause shall be conclusively determined by
the Board of Directors of the Company or its duly appointed
agent.
(b) The Optionee's willful termination of employment with the
Company other than as provided for in sub-paragraph (c)
which follows.
(c) The Option expiration date set forth in Paragraph 1, upon
the Optionee's retirement from the Company (as defined in
the Plan).
(d) The earlier of ninety days after the Company terminates the
Optionee's employment for a reason other than for cause or
the expiration date set forth in Paragraph 1, provided that
this Option shall only be exercisable to the extent of the
number of shares purchasable as of the date of the
Optionee's termination of employment as provided under
Paragraph 2 of this Agreement.
(e) The earlier of one year following the Optionee's
termination of employment from the Company as a result of
disability as defined in Section 22(e)(3) of the Code or
the expiration date set forth in Paragraph 1 of this
Agreement, provided that this Option shall only be
exercisable to the extent of the number of shares
purchasable as of the date of the Optionee's termination of
employment as provided under Paragraph 2 of this Agreement.
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(f) The earlier of one year following the Optionee's death
while this Option is outstanding or the expiration date set
forth in Paragraph 1 of this Agreement, provided that this
Option shall only be exercisable to the extent of the
number of shares purchasable as of the earlier of the
Optionee's death or termination of employment from the
Company.
For purposes of this Agreement, a change in status from employee
to a consultant or advisor will not constitute a termination of
employment. Nothing contained in this Agreement shall confer on
the Optionee any right to continue in the employ of the Company or
shall limit the Company's rights to terminate the Optionee at any
time, provided, however, that nothing in this Agreement shall
affect any other contractual rights existing between the Optionee
and the Company.
4. Purchase of Shares. From time to time, but only to the extent this
Option is then exercisable, the Optionee may purchase shares of
Common Stock covered by this Option by delivering to the Company a
signed notice of the Optionee's election to purchase a designated
number of shares. The aggregate purchase price of the shares shall
be paid in full at the time of exercise by delivery to the Company
of cash or check, or if permitted by the Committee, such other
means as provided for under the Plan.
5. Leave of Absence. If the Optionee is officially granted a leave of
absence for illness, military or governmental service or other
reasons by the Company, for purposes of this Option, such leave of
absence shall not be treated as termination of employment.
6. Transferability. This option shall not be transferable or
assignable by the Optionee other than by will or the laws of
descent and distribution.
7. Right of Repurchase. The Company reserves the right to require the
Optionee to sell to it the number of shares acquired through
exercise of this Option if, either one year before or after such
exercise, the Optionee has:
(a) Rendered services for any organization or engaged directly
or indirectly in any business or activity which, in the
judgment of the Committee, is in competition with the
Company or is otherwise prejudicial to or in conflict with
the best interests of the Company;
(b) Disclosed, without prior written authorization from the
Company, other than in an official capacity as a part of
the Optionee's responsibilities for the Company, any
confidential information or materials relating to the
Company business;
(c) Violated any agreement with the Company regarding rights,
title and interest in any idea, patentable or not, made or
conceived by the Optionee or by the Optionee and others, in
conjunction with Optionee's employment with the Company
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which relates to the actual or anticipated business,
research, or development work of the Company; or
(d) Acted in any other manner which is otherwise inimical to
the Company, as determined by the Committee.
The price per share to be paid by the Company for any such
repurchase shall be the lower of the exercise price or the Fair
Market Value on the date preceding such purchase.
8. Acceleration of Exercisability. Notwithstanding any other
provision of this Agreement establishing the earliest date upon
which the Optionee may exercise his or her rights under this
Option:
(a) This Option shall become immediately exercisable in full as
of the date upon which occurs any of the following:
(i) The Company executes a definitive agreement to
merge or consolidate with or into another
corporation in which the Company is not the
surviving corporation and the Common Stock is
converted into or exchanged for stock or
securities of any other corporation, cash, or any
other thing of value; or
(ii) The Company executes a definitive agreement to
sell or otherwise dispose of substantially all its
assets.
(b) This Option shall become immediately exercisable in full
upon the Optionee's termination of employment on account of
retirement (as defined in the Plan).
9. Purchase for Investment. As a condition to the exercise in whole
or in part of the Option hereby granted, each written note of
election shall include a representation and warrant in writing to
the Company that the shares purchased are being acquired for
investment and not with a view to the distribution or resale
thereof, unless, at the time the Option is exercised, in whole or
in part, there is in effect under the Securities Act of 1933 (the
"1933 Act") a registration Statement relating to the shares
issuable upon exercise of this Option and available for delivery
to the Optionee a prospectus meeting the requirements of Section
10(a)(3) of the 1933 Act. No shares shall be purchased upon the
exercise of this Option unless and until any then applicable
requirements of the United States Securities and Exchange
Commission, any state having jurisdiction (and any other
regulatory agencies having jurisdiction), and of any exchanges
upon which shares of the Common Stock may be listed or regulatory
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bodies governing trading of the Common Stock shall have been fully
complied with.
10. Tax Withholding. As condition to delivery by the Company of
certificates for shares purchased upon exercise of all or any part
of this Option, adequate provision, as determined by the Company,
shall be made for the payment required by law to satisfy any
federal, state or local tax withholding obligations. The Committee
may permit shares purchased under this Option to be used to
satisfy such tax withholding obligations, with such shares valued
using the Fair Market Value on the date of exercise; provided,
however, that such share withholding shall be mandated if the
Optionee is a person subject to Section 16 of the 1934 Act at the
time of exercise.
11. Transfer Taxes. The Company shall at all times during the term
when this Option is exercisable reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy
the requirements of this Agreement, and shall pay all original
issue and transfer taxes upon exercise with respect to the issue
and transfer of shares and all other fees and expenses necessarily
incurred by the Company in connection with such exercise.
12. Miscellaneous. The Agreement (a) shall be binding upon and inure
to the benefit of any successor of the Company; (b) shall be
governed by the laws of the State of Utah, and any applicable laws
of The United States of America; (c) may not be amended except in
writing; and (d) shall in no way affect the Optionee's
participation or benefits under any other plan or benefit program
maintained or provided by the Company. In the event of a conflict
between this Agreement and the Plan, the Plan shall govern.
This Agreement has been executed by the undersigned:
Category 5 Technologies, Inc. Optionee
By:____________________________ _______________________________
Xxxx Xxxxx
Its:___________________________
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