10.5 Incentive Stock Option Agreement with Xxx Xx (covering 675,000 shares)
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made and entered
into in duplicate this 5th day of November, 2004 between DataLogic
International, Inc., a Delaware corporation having a principal place of
business at 00000 Xxx Xxxxxx Xxx., Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000
("Corporation"), and Xxx Xx of Los Angeles, CA ("Holder"), with respect to the
following facts:
Pursuant and subject to the Corporation's Stock Option Plan, a copy of
which is furnished to the Holder with a copy of this Agreement and the
provisions of which, by this reference, are made a part of this Agreement as
though specified completely and specifically verbatim in this Agreement (the
"Plan"), the Corporation's Board of Directors has determined that it is in the
best interests of the Corporation and its stockholders to grant the option
provided for herein to the Holder. The parties agree as follows:
1. OPTION GRANTED. Corporation grants to Holder an option to
purchase the number of shares of $.001 par value common stock of Corporation
at a purchase price as described in Appendix "A" (the "Option").
2. TIME OF EXERCISE OF OPTION. Holder may exercise the Option at
any time as described in Appendix "A", and from time to time until termination
of the Option as provided in Paragraph 11 of this Agreement. For purposes of
this Agreement, the Holder is deemed to be in "Service" to the Corporation as
long as such individual renders continuous services on a periodic basis to the
Corporation, a parent or subsidiary corporation of Corporation, or a
corporation, or a subsidiary corporation of such a corporation issuing or
assuming stock options in a transaction to which Internal Revenue Code Section
424(a) applies, in the capacity of an employee, director or an independent
consultant or advisor.
3. METHOD OF EXERCISE. The Holder shall exercise the Option by
delivery to the Corporation at its principal place of business, of (i) a
written notice of exercise signed by the person or persons exercising the
Option specifying the number of Options being exercised; and (ii) a certified
or cashier's check in payment of the Option purchase price; or (iii) full
payment in shares of Corporation's $.001 par value common stock held for the
requisite period necessary to avoid a change to Corporation's reported
earnings and valued at fair market value as determined pursuant to Section 3.5
of the Corporation's Stock Option Plan; or (iv) if a cashless exercise program
has been implemented by the Corporation's Board of Directors, full payment may
be made through a sale and remittance procedure pursuant to which the Holder
(A) shall provide irrevocable written instructions to a designated brokerage
firm to effect the immediate sale of the optioned shares to be purchased and
remit to the Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable for the
optioned shares to be purchased and (B) shall concurrently provide written
directives to the Corporation to deliver the certificates for the optioned
shares to be purchased directly to such brokerage firm in order to complete
the sales transaction. The Corporation shall have the right to demand from
the person or persons exercising the Option appropriate documentation
evidencing such person or persons right to exercise such Option. Promptly
upon receipt of such notice of exercise and the appropriate consideration, the
Corporation will deliver or cause to be delivered to Holder stock
certificate(s) representing the number of shares of the Corporation's $.001
par value common stock purchased in accordance with the provisions of this
Agreement and during Holder's lifetime, duly registered in the name of the
Holder and, at the Holder's election, his or her spouse.
4. CAPITAL ADJUSTMENTS.
(a) The existence of the Option shall not affect in any way the
right or power of Corporation or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations, or other changes in
Corporation's capital structure or its business, or any merger or
consolidation of Corporation or any issue of bonds, debentures, preferred
stock having a preference to or affecting Corporation's common stock or of any
rights thereof, or the issuance of any securities convertible into any such
common stock or of any rights, options, or warrants to purchase any common
stock, or the dissolution or liquidation of Corporation, any sale or transfer
of all or any part of its assets or business, or any other act or proceeding
of Corporation, whether of a similar character or otherwise.
(b) The securities with respect to which the Option is granted are
shares of the $.001 par value common stock of Corporation as presently
constituted, but if and whenever, prior to the delivery by Corporation of all
the shares of the common stock with respect to which the Option is granted,
Corporation shall effect a subdivision or consolidation of shares or other
capital readjustment, the payment of a stock dividend, or other increase or
reduction of the number of shares of such common stock outstanding without
receiving compensation therefore in money, services, or property, the number
of shares of such common stock then remaining subject to the Option shall (a)
in the event of an increase in the number of outstanding shares of such common
stock, be proportionately increased, and the cash consideration payable per
share of such common stock shall be proportionately reduced; and (b) in the
event of a reduction in the number of outstanding shares of such common stock,
be proportionately reduced, and the cash consideration payable per share of
such common stock shall be proportionately increased.
5. MERGER AND CONSOLIDATION. In the event of a merger of one or more
corporations with and into Corporation or any consolidation of Corporation and
one or more corporations, the Option may be assumed or an equivalent option
may be substituted by such surviving corporation or a parent or subsidiary of
such surviving corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger or consolidation.
6. INVESTMENT UNDERTAKING. The Holder will hold the Option and the
rights constituent thereto for investment and not with an intention of
distribution, and upon exercise will deliver a letter confirming the Holder's
nondistributive intent with respect to the shares of Corporation's $.001 par
value common stock received as a result of the exercise of the Option.
7. REPRESENTATIONS OF CORPORATION. During such time as the Option
remains outstanding and unexpired, Corporation will reserve for issuance, upon
the exercise of the Option, the number of shares of Corporation's $.001 par
value common stock that are subject to the Option. The shares of
Corporation's $.001 par value common stock subject to the Option, when issued,
shall be fully paid and nonasessable. Corporation will pay, when due and
payable, any and all taxes or fees that may be payable by Corporation with
respect to the grant of the Option or the issuance of any shares of
Corporation's $.001 par value of common stock or certificates therefore
subject to the Option. This does not include, however, any federal, state or
other personal income tax payable by Holder because of (i) the grant of the
Option; (ii) the issuance of any share of the Corporation's $.001 par common
stock upon exercise thereof; or (iii) any subsequent disposition of such
shares, which shall remain the obligation of Holder.
8. WITHOLDING TAXES. If Corporation determines that it is required to
withhold federal, state, or local tax as a result of the exercise of the
Option, Holder, as a condition to the exercise of the Option, shall make
arrangements satisfactory to the Corporation to enable it to satisfy such
withholding requirements.
9. COMMITTEE DETERMINATION FINAL. The interpretation of the Plan and
this Agreement, including any inconsistency between the two documents, shall
be reserved to and made by the Committee of the Board of Directors of
Corporation provided for in the Plan. The Committee's determinations shall be
final as between the parties hereto, unless otherwise determined by the Board
of Directors of Corporation.
10. TRANSFER OF OPTION. During Holder's lifetime, the Option shall be
exercisable only by Holder. The Option shall not be transferable by Holder,
other than by the laws of descent and distribution upon Holder's death. In
the event of Holder's death during Service or during the applicable period
after termination of Service specified in Paragraph 2 of this Agreement,
Holder's personal representatives may exercise any portion of the Option that
remains unexercised at the time of Holder's death; provided, however, that any
such exercise must be made, if at all, during the period within three (3)
months after Holder's death, and subject to the option termination date
specified in Paragraph 11 (c) of this Agreement.
11. TERMINATION OF OPTION. The Option shall terminate on the earliest to
occur of the following dates:
(a) The expiration of one (1) month from the date of Holder's
termination of Service except for termination because of death or permanent
and total disability;
(b) The expiration of three (3) months from the date of Holder's
termination of Service because of death;
(c) The expiration of twelve (12) months from the date on which
Holder's Service is terminated because of permanent and total disability, as
defined in Internal Revenue Code Section 22(e)(3);
(d) At 5:00 P.M. Pacific Time on the date which is described in
Appendix "A";
(e) The date upon which the Holder (i) is discharged for cause; (ii)
or comits an act detrimental to the Corporation's interests after the service
of the Holder has been terminated pursuant to Paragraph 11, subsection (a) of
this Agreement. "Cause" shall mean (i) Holder has committed a felony; (ii)
after written notice from Corporation, Holder has repeatedly failed or
refused, in a material respect, to follow reasonable policies or directives
established by Corporation; (iii) after written notice from Holder has
willfully and persistently failed to attend to material duties or obligations;
(iv) Holder has performed an act or failed to act, which, if he or she were
prosecuted and convicted, would constitute a theft of money or property of the
Corporation; or (v) Holder has misrepresented or concealed a material fact for
purposes of securing Service with the Corporation.
12. RIGHTS AS SHAREHOLDER. Holder will not be deemed to be a holder of
any shares of Corporation's $.001 par value common stock pursuant to the
exercise of the Option until Holder pays the purchase price therefore and a
stock certificate is delivered to Holder for those shares. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such exercise and full payment for the optioned shares.
13. GOVERNING LAW. This Agreement is granted and delivered in the
State of Delaware and is intended to be construed and enforced under the laws
thereof.
IN WITNESS THEREOF, the parties have made and entered into this Agreement in
duplicate on the date specified in its preamble.
CORPORATION
DATALOGIC International, Inc.,
a Delaware corporation
/s/ Xxxxx Xxxxxx
By: _____________________
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
By: _____________________
Xxxxx Xxxxxx
HOLDER
/s/ Xxx Xx
___________________________
Xxx Xx
APPENDIX "A"
Xxx Xx
Holder Name_________________________________________________________________
675,000
Number of Options Granted _________________________________________________
$.61 USD
Option Price ____________________________________________________________
November 5, 2004
Vesting Commencement Date __________________________________________________
Option Expiry Date Option will have an expiry that is 2 years from the
Vesting Schedule Date
Vesting Schedule 135,000 options vested immediately. The remaining
540,000 options will vest quarterly, over a period of 2
years, beginning on the date which is three months from
the Vesting Commencement Date.
/s/ Xxxxx Xxxxxx
By: _____________________
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
By: _____________________
Xxxxx Xxxxxx
HOLDER
/s/ Xxx Xx
___________________________
Xxx Xx
