ZOOM TECHNOLOGIES, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
ZOOM
TECHNOLOGIES, INC.
Non-qualified
Stock Option Agreement (the “Option”) made effective as of the __
day of
_______
between
Zoom Technologies, Inc., (the “Company”), and ________
(the
“Recipient”), an employee of the Company, pursuant to the Company’s 1990 Stock
Option Plan, as it may be amended from time to time (the “1990 Plan”).
WHEREAS,
the Company and the Recipient desire to enter into an agreement whereby the
Company will grant the Recipient a non-qualified stock option to purchase shares
of the Common Stock, $.01 par value, of the Company (the “Common Stock”),
pursuant to the 1990 Plan.
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the Company and the Recipient agree as
follows:
1. Grant
of Option.
Pursuant
to the terms and conditions of the 1990 Plan and this Option, the Company hereby
grants to the Recipient an Option to purchase, as provided in Section 3 hereof,
all or any part of a total of ______
shares
of Common Stock (the “Option Shares”).
2. Purchase
Price.
The
price
at which the Option Shares may be purchased shall be ______
per
share (the “Option Exercise Price”).
3. Exercise
of Option.
(a) Subject
to the provisions of Section 3(b) and Section 4, the purchase rights with
respect to the Option Shares shall exercisable as follows: _____
on _____, ____ on ______;
provided, however, that the Company, in its sole discretion, may elect to
accelerate the dates on which all or a portion of the Option Shares shall become
exercisable.
(b) Notwithstanding
anything in Section 3(a) to the contrary, the purchase rights with respect
to
the Option Shares shall become exercisable in full and the Option Shares subject
to this Option shall become fully vested upon the earlier to occur of (i)
immediately prior to a Change of Control of the Company (as hereinafter
defined), (ii) upon the adoption of a plan of liquidation, and (iii) on the
date
on which Recipient’s employment is terminated by the Company for any reason
other than for “cause” (as hereinafter defined). For purposes hereof, “Change of
Control shall mean: (A) any merger, consolidation, share exchange, business
combination or other similar transaction in which the shareholders of the
Company would own less than 50% of the surviving entity following the
consummation thereof; (B) any sale, lease, exchange, transfer or other
disposition of 50% or more of the assets of the Company and its subsidiaries,
taken as a whole, in a single transaction or series of transactions; or (C)
the
acquisition by a person or entity, or any “group” (as such term is defined under
Section 13(d) of the Securities Exchange Act of 1934) of beneficial ownership
of
50% or more of the Stock whether by tender offer, exchange offer or otherwise.
For purposes hereof, “Cause” shall mean (i) deliberate dishonesty, illegal or
unethical behavior or other willful behavior detrimental to the best interest
of
the Company; (ii) conduct by the Recipient constituting an act of moral
turpitude; (iii) willful disloyalty to the Company or refusal or failure of
the
Recipient to obey the directions of the President or Board of Directors;
(iv) incompetent performance or substantial or continuing inattention to or
neglect of duties and responsibilities, provided that the Recipient will be
notified in writing of such deficiencies and given a period of 60 days to
correct them.
(c) Notwithstanding
any provision of this Option to the contrary, in no event may this Option be
exercised after the earlier to occur of (i) 30 days after the consummation
of a
Change of Control or (ii) 10 years from the date of this Option (the “Expiration
Date”).
4. Termination
of Relationship.
If
the
Recipient's relationship with the Company is terminated, as determined by the
Company (a “Termination”), then this Option may be exercised as to all shares
with respect to which Recipient could exercise this Option on the date of
Termination, and which shares have not been previously purchased, until the
earlier of the Expiration Date, or:
(i) in
the
case of Termination by reason of death or Permanent and Total Disability, one
year after termination of the relationship, or
(ii) in
the
case of any other Termination, one month after the termination of the
relationship.
5. Nontransferability;
Persons Able to Exercise.
The
Option may not be transferred other than by will or the laws of descent and
distribution. During the life of the Recipient, only the Recipient may exercise
this Option. If the Recipient dies while still employed by the Company, or
during the periods specified in Section 4, this Option may be exercised by
his
executors, administrators, legatees or distributees, provided that such person
or persons comply with the provisions of this Option applicable to the
Recipient.
6. Method
of Exercising Option.
The
Option may be exercised, in whole or in part, by written notice to the Company,
containing an executed Notice of Exercise in the form of Attachment
A,
provided that the Company, in its discretion, may modify or augment these
requirements as provided in Section 9 of this Option, or where appropriate
because a person other than the Recipient is exercising the Option pursuant
to
Section 5. The written notice specified in this Section must be accompanied
by
payment of the Option Exercise Price for the shares being purchased. Payment
shall be made in cash, unless the Company, in its sole discretion, authorizes
payment to be made in shares of the Company, other property, or a combination
of
such shares, other property and cash. As soon as practical after receipt of
this
notice and payment, the Company shall deliver a certificate or certificates
representing the purchased shares registered in the name of the person or
persons exercising this Option. In the event this Option is exercised by any
person other than the Recipient, the notice shall be accompanied by appropriate
proof of the right of such person to exercise this Option. All shares purchased
upon the exercise of this Option and payment of the full Option Exercise Price
will be fully paid and nonassessable.
7. Stock
Adjustments.
If
there
shall be any change in the Common Stock through merger, consolidation,
reorganization, recapitalization, or other change in the corporate structure
of
the Company, appropriate adjustments in the Option Exercise Price and total
number and kind of shares subject to this Option shall be made by the Company
as
provided in the 1990 Plan.
8. No
Rights Other Than Those Expressly Created.
Neither
this Option nor any action taken hereunder shall be construed as (i) giving
the
Recipient any right to be retained in the employ of, or continue to be
affiliated with, the Company, (ii) giving the Recipient any equity or interest
of any kind in any assets of the Company, or (iii) creating a trust of any
kind
or a fiduciary relationship of any kind between the Recipient and the Company.
As to any claim for any unpaid amounts under this Option, any person having
a
claim for payments shall be unsecured creditor. The Recipient shall not have
any
of the rights of a stockholder with respect to any Option Shares until such
time
as this Option has been exercised and Option Shares have been
issued.
9. Compliance
with Laws.
(a) Withholding
of Taxes.
Pursuant to applicable federal, state, local or foreign laws, the Company may
be
required to collect or withhold income or other taxes from Recipient upon the
grant of this Option, the exercise of this Option, or at some other time. The
Company may require, as a condition to the exercise of this Option, or demand,
at such other time as it may consider appropriate, that the Recipient pay the
Company the amount of any taxes which the Company may determine is required
to
be collected or withheld, and the Recipient shall comply with the requirement
or
demand of the Company.
(b) Securities
Law Compliance.
Upon
exercise (or partial exercise) of this Option, the Recipient shall make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company to issue or transfer
the
Option Shares in compliance with the provisions of applicable federal or state
securities laws. The Company, in its discretion, may postpone the issuance
and
delivery of Option Shares upon any exercise of this Option until completion
of
such registration or other qualification of such shares under any federal or
state laws, or stock exchange listing, as the Company may consider appropriate.
The Company may require that prior to the issuance or transfer of Option Shares
upon exercise of this Option, the Recipient enter into a written agreement
to
comply with any restrictions on subsequent disposition that the Company deems
necessary or advisable under any applicable federal and state securities laws.
Certificates of Common Stock issued hereunder shall be legended to reflect
such
restrictions.
(c) General.
No
Option Shares shall be issued upon exercise of this Option unless and until
the
Company is satisfied, in its sole discretion, that there has been compliance
with all legal requirements applicable to the issuance of such Option
Shares.
10. Miscellaneous.
(a)
Provisions
of the 1990 Plan.
The
Option hereby granted is expressly subject to all of the terms and conditions
contained in this Option and in the 1990 Plan, and the 1990 Plan is hereby
incorporated herein by reference. All capitalized terms not defined in this
Option have the meanings specified in the 1990 Plan. This stock option is not
intended to be an Incentive Stock Option, as that term is described in Section
422 of the Internal Revenue Code of 1986, as amended.
(b)
Discretion
of the Stock Option Committee.
Unless
otherwise explicitly provided, the Stock Option Committee, as defined in the
1990 Plan, shall make all determinations required to be made hereunder,
including determinations required to be made by the Company, and shall interpret
all provisions of this Option, as it deems necessary or desirable, in its sole
and unfettered discretion. Such determinations and interpretations shall be
binding and conclusive on the Company and the Recipient. The Stock Option
Committee, in its sole discretion, is authorized to accelerate the time at
which
this Option may be exercised.
(c)
Reservation
of Shares.
During
the term of this Option, the Company shall at all times reserve and keep
available shares of Common Stock sufficient to satisfy the requirements of
this
Option.
(d)
Amendment.
This
Option may only be modified or amended by a writing signed by both parties.
(e)
Notices.
Any
notices required to be given under this Option shall be sufficient if in writing
and if hand-delivered or if sent by first class mail and addressed as
follows:
if
to the
Company:
Zoom
Technologies, Inc.
000
Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxx, Chief Financial Officer
if
to the
Recipient:
Name
& Address
or
to
such other address as either party may designate under the provisions hereof.
(f)
Successors
and Assigns.
The
rights and obligations of the Company under this Option shall inure to the
benefit of and be binding upon the successors and assigns of the
Company.
(g) Paragraph
Headings.
The
paragraph headings used in this Option are for convenience or reference, and
are
not to be construed as part of this Option.
IN
WITNESS WHEREOF, the parties have executed this Option as an instrument under
seal effective as of the date written on the first page of this
Option.
ZOOM TECHNOLOGIES, INC. | ||
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By: | /s/ Xxxxx X Xxxxxxx | |
Xxxxx X. Xxxxxxx, Chief Executive Officer | ||