FIRST SCIENTIFIC, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
OPTION GRANT
1. Name of Optionee: XXXXXX X. XXXXXX
2. Maximum Number of Shares Granted Hereunder: One million (1,000,000)
3. Exercise Price: Seventy-five cents ($0.75) per share
4. Terms of Grant:
Options Exercisable covering
Exercise Dates Number of Shares
-------------- -----------------------------
* On or after October 1, 1998 - 100,000
* On or after January 1, 1999 - an additional 300,000
* On or after January 1, 2000 - an additional 300,000
* On or after January 1, 2001 - an additional 100,000
* On or after the earlier of
January 1, 2001 - an additional 200,000
or the date when the Company
has achievedbacklog of valid
purchase orders
aggregating $50,000,000 or more
5. Expiration of Options: Each option shall expire on the fifth
anniversary of its respective exercise date set forth above; provided,
however, that the Board of Directors shall have authority to extend
any of such expiration dates at the request of the Optionee, which
request shall not be unreasonably denied.
6. Service Requirement: Optionee shall continue to serve as Chairman of
the Board of Directors and shall continue to provide consulting
services to the Company of not less than forty percent of his
business time (two business days per week, on average), in exchange
for payment by the Company of $10,000 per month, to the extent that
the Company elects to maintain such relationship. Unless the Company
terminates Optionee's appointment as Chairman or consulting
arrangement for cause, the vesting rights remain valid for the
amounts, dates and conditions specified in the Terms of Grant in
Section 4 above.
7. Adjustments. Upon the occurrence of any of the following events, the
Optionee's rights with respect to Options shall be adjusted as
hereinafter provided:
(a) Stock Dividends and Stock Splits. If the shares of the
Company's Common Stock shall be subdivided or combined into a greater or
smaller number of shares or if the Company shall issue any shares of Common
Stock as a stock dividend on its outstanding Common Stock, the number of
shares of Common Stock deliverable upon the exercise of Options shall be
appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or stock dividend.
(b) Acceleration of Exercise Dates or Assumption of Options by
Successors. In the event of a dissolution or liquidation of the Company, a
merger in which the Company is not the surviving entity, or the sale of all
or substantially all of the Company's assets, this Option shall be
exercisable in full and all vesting shall accelerate to full vesting of the
unexercised number of shares prior to the consummation of such dissolution,
liquidation, merger or asset sale.
(c) Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in Section 6(b) above) pursuant to which securities of the Company
or of another entity are issued with respect to the outstanding shares of
Common Stock, the Optionee, upon exercising an Option, shall be entitled to
receive for the purchase price paid upon such exercise at least the
equivalent of the securities the Optionee would have received if the
Optionee had exe4cised the Option prior to such recapitalization or
reorganization.
(e) Issuances of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or of
securities convertible into shares of stock of my class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.
(f) Fractional Shares. No fractional shares shall be issued
under this Option. The Optionee shall receive cash from the Company in lieu
of such fractional shares.
IN WITNESS WHEREOF, the Company has caused this Option to be granted and
executed. The Optionee whose signature appears below acknowledges receipt of
a copy of the Option Plan related to this Option and related Terms and
Conditions this 30th day of September, 1998.
The Company:
First Scientific, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President
Accepted and acknowledged:
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Optionee
