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Exhibit 10.1
EMPLOYEE NON-QUALIFIED STOCK OPTION
To:
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ADDRESS
Date of Grant:
WHEREAS, ______________ (the "Optionee") is an employee of U.S. Plastic
Lumber Corp., a Nevada Corporation or any of it subsidiary companies (the
"Company");
WHEREAS, the execution of a Non-Qualified Stock Option Agreement in the
form hereof has been duly authorized by a resolution of the Board of Directors
(the "Board") of the Company duly adopted on March 10, 1999; and
WHEREAS, the granting of this Option is subject to shareholder approval
on or about May 5, 1999 at the Annual Meeting of the Company; and
NOW, THEREFORE, pursuant to the terms hereof, the Company hereby grants
to the Optionee an Option (the "Option") to purchase ____________ shares of the
Company's non-registered Common Stock, par value $0.0001 per share ("Common
Shares"), at the price of __________($ ) per share (the "Exercise Price"),
and agrees to cause certificates for any Common Shares purchased hereunder to be
delivered to the Optionee upon full payment of the Exercise Price, subject to
the applicable terms and conditions hereinafter set forth.
1. VESTING OF OPTIONS.
(a) Unless and until terminated as hereinafter provided, the Option shall
vest, 33 1/3% on a date one year from the date of grant of this Option ("Vesting
Date") and with respect to an additional 33 1/3% of the number of total shares
granted on each of the next two succeeding anniversaries of the Vesting Date;
provided however, that in the event the Optionee dies or becomes permanently
disabled while in the employ of the Company, the Options shall automatically
fully vest. To the extent that the Option shall have so become exercisable, it
may be exercised in whole or in part from time to time.
(b) Upon the occurrence of a change in control of U.S. Plastic Lumber
Corporation (as defined in the Plan) outstanding options will be, immediately
exercisable in full. Following a change in control, unless waived in advance of
such change in control by the Committee, and optionee may require it U.S.
Plastic Lumber Corporation or its successor to pay a cash amount in cancellation
of the option equal to the fair market of the shares of Common Stock covered by
the option reduced by the aggregate exercise price. Under the Plan, a change in
control is deemed to occur (i) if any person, other than Xxxxx Partnership,
shall acquire direct or indirect beneficial ownership of more than 40% of the
total combined voting power with respect to the election of directors of the
issued and
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outstanding stock of USPL (except that no Change in Control shall be deemed to
have occurred if the persons who are stockholders of USPL immediately before
such acquisition own all or substantially all of the voting stock or other
interests of such person immediately after such transaction), or (ii) have the
power (whether as result of stock ownership, revocable or irrevocable proxies,
contract or otherwise) or ability to elect or cause the election of directors
consisting at the time of such election of the majority of the Board. A "person"
for this purpose shall mean any person, corporation, partnership, joint venture
or other entity or any group (as such term is defined for purposes of Section
13(d) of the Exchange Act) and a person shall be deemed to be a beneficial owner
as that term is used in Rule 13d-3 under the Exchange Act. The amount payable
under this Section 10(d) shall be remitted by USPL in cash or by certified or
bank check, reduced by applicable tax withholding.
2. PAYMENT OF EXERCISE PRICE. An Option that is exercisable hereunder
may be exercised by delivery to USPL on any business day, at its principal
office, addressed to the attention of the Vice President and General Counsel, of
written notice of exercise, which notice shall specify the number of shares with
respect to which the Option is being exercised, and shall be accompanied by
payment in full of the Option Price of the shares for which the Option is being
exercised, except as provided below. The minimum number of shares of Stock with
respect to which an Option may be exercised, in whole or in part, at any time
shall be the lesser of 100 shares or the maximum number of shares available for
purchase under the Option the time of exercise.
Payment of the Option Price for the shares of Stock purchased pursuant
to the exercise of an Option shall be made (i) in cash or in cash equivalents;
(ii) through the tender to USPL of shares of Stock, which shares shall be
valued, for purposes of determining the extent to which the Option Price has
been paid thereby, at their fair market value (determined in the manner
described in the Plan) on the date of exercise; (iii) by delivering a written
direction to USPL that the Option be exercised pursuant to a "cashless"
exercise/sale procedure (pursuant to which funds to pay for exercise of the
Option are delivered to USPL by a broker upon receipt of stock certificates from
USPL) or a cashless exercise/loan procedure (pursuant to which the Optionees
would obtain a margin loan from a broker to fund the exercise) through a
licensed broker acceptable to USPL whereby the stock certificate or certificates
for the shares of Stock for which the Option is exercised will be delivered to
such broker as the agent for the individual exercising the Option and the broker
will deliver to USPL cash (or cash equivalent acceptable to USPL) equal to the
Option Price for the shares of Stock purchased pursuant to the exercise of the
Option plus the amount (if any) of federal and other taxes that USPL, may, in
its sole judgment, be required to withhold with respect to the exercise of the
Option; (iv) to the extent permitted by applicable law and under the terms of
the Option Agreement with respect to such Option, by the delivery of a
promissory note of the Optionee to USPL on such terms as shall be set out in
such Option Agreement and as shall be acceptable to the Company in its sole
discretion; or (v) by combination of methods described in (i), (ii), (iii) and
(iv). Payment in full of the Option Price need not accompany the written notice
of exercise if the Option is exercised pursuant to the cashless exercise/sale
procedure described above. An attempt to exercise any Option
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granted hereunder other than as set forth above shall be invalid and of no force
and effect. Promptly after the exercise of an Option, the individual exercising
the Option shall be entitled to the issuance of the Stock certificate or
certificates evidencing his ownership of such shares. A separate Stock
certificate or certificates shall be issued for any shares purchased pursuant to
the exercise of an Option that is intended to be an Incentive Stock Option,
which certificate or certificates shall not include any shares purchased
pursuant to the exercise of an Option that is not an Incentive Stock Option. An
individual holding or exercising an Option shall have none of the rights of a
shareholder until the shares of Stock covered thereby are fully paid and issued
to him and, except as provided in Section 18 below, no adjustment shall be made
for dividends or other rights for which the record date is prior to the date of
such issuance.
Nonforfeitable, nonrestricted shares of Common Stock that are
transferred by the Optionee in payment of all or any part of the Exercise Price
shall be valued on the basis of their fair market value of Common Stock of the
Company on the date of delivery of such certificates to the Company, accompanied
by an assignment of stock to the Company. Any assignment of stock shall be in a
form and substance satisfactory to the Secretary of the Company, including
guarantees of signature(s) and payment of all transfer taxes if he deems such
necessary or desirable. The requirement of payment in cash shall be deemed
satisfied if the Optionee shall have made arrangements satisfactory to the
Company with a broker that is a member of the National Association of Securities
Dealers, Inc. to sell a sufficient number of the Common Shares, which are being
purchased pursuant to the exercise, so that the net proceeds of the sale
transaction will at least equal the aggregate Exercise Price, plus interest at
the Applicable Federal Rate (as that term is defined in Section 1274 of the
Code) for the period from the date of exercise to the date of payment, and
pursuant to which the broker undertakes to deliver the aggregate Exercise Price,
plus such interest, to the Company not later than the date on which the sale
transaction will settle in the ordinary course of business.
3. TERMINATION OF OPTION. The Option shall terminate on the earliest of
the following dates:
(a) Thirty (30) days after the Optionee ceases to be an employee of the
Company for any reason other than death or permanent disability;
(b) Twelve months after the death, or termination of Optionee's
employment by reason of his becoming permanent disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, if the Optionee dies or
becomes permanently disabled while an employee of the Company. Your executor,
administrator, guardian or custodian must present proof of his authority
satisfactory to the Company prior to being allowed to exercise this option; or
(c) Ten years from the Date of Xxxxx.
In the event that the Optionee commits an act that the Compensation
Committee of the Board of Directors of the Company ("Committee") acting in good
faith determines
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to have been intentionally committed and materially adverse to the interests of
the Company, the Option shall terminate as of the time of the commission of that
act, notwithstanding any other provision of this Agreement.
After the date your employment status terminates for any reason, this
option may be exercised only for the number of shares which you had a right to
purchase on the date your employment ceased.
4. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Option shall not be
exercisable if the exercise thereof would result in a violation of any such law.
5. TRANSFERABILITY AND EXERCISABILITY. Neither the Option nor any
interest therein may be transferred by the Optionee, except by will or the laws
of descent and distribution, or as otherwise set forth herein. The Option may
not be exercised during the lifetime of the Optionee except by the Optionee or,
in the event of his legal incapacity, by his guardian or legal representative
acting on behalf of the Optionee in a fiduciary capacity under state law and
court supervision. Non-Qualified Stock Options granted under the Plan may be
transferred only by gift or qualified domestic relations order to a family
member (as defined below) of a director of the Company. The term "family member"
includes any child, stepchild, grandchild, parent, step parent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the employee's household (other than
a tenant or employee), a trust which these persons have more than 50 percent of
the beneficial interest, a foundation which these persons (or the employee)
control management of assets, and any other entity in which these persons (or
the employee) own more than 50 percent of the voting interest.
Until the option price has been paid in full pursuant to due exercise
of this option and the purchase shares are delivered to you, you do not have any
rights as a stockholder of the Company. The Company reserves the right not to
deliver to you the shares purchased by virtue of exercise of this option during
any period of time in which the Company deems, in its sole discretion, that such
delivery would violate a federal, state, local or securities exchange rule,
regulation or law.
6. ADJUSTMENTS. The Committee may make such adjustments in the Exercise
Price and the number and kind of shares of stock or other securities covered by
the Option as the Committee may in good faith determine to be equitably required
in order to prevent any dilution or expansion of the Optionee's rights under
this Agreement that otherwise would result from any (a) stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company, (b) merger, consolidation, spin-off, reorganization or
partial or effect similar to any of the foregoing.
7. WITHHOLDING TAXES. If the Company shall be required to withhold any
federal, state, local or foreign tax in connection with an exercise of the
Option, the Optionee shall
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pay the tax or make provisions that are satisfactory to the Company for the
payment thereof.
8. RIGHT TO TERMINATE EMPLOYMENT AND ADJUST COMPENSATION. No provision
of this Agreement shall limit in any way whatsoever any right that the Company
may otherwise have to terminate the employment or adjust compensation of the
Optionee at any time.
9. CONDITIONS PRECEDENT TO EXERCISABILITY OF OPTION. Notwithstanding
anything to the contrary contained herein, this option is not exercisable until
all the following events occur and during the following periods of time:
(a) Until the Plan is approved by the stockholders of the Company in
the manner prescribed by the Code and the regulations thereunder;
or
(b) Until this option and the optioned shares are approved and/or
registered with such federal, state and local regulatory bodies
or agencies and securities exchanges as the Company may deem
necessary or desirable; or
(c) During any period of time in which the Company deems that the
exercisability of this option, the offer to sell the shares
optioned hereunder, or the sale thereof, may violate a federal,
state, local or securities exchange rule, regulation or law, or
may cause the Company to be legally obligated to issue or sell
more shares than the Company is legally entitled to issue or
sell.
The following two paragraphs shall be applicable if, on the date of
exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as amended,
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
(a) The Optionee hereby agrees, warrants and represents that he will
acquire the Common Stock to be issued hereunder for his own
account for investment purposes only, and not with a view to, or
in connection with, any resale or other distribution of any of
such shares, except as hereafter permitted. The Optionee further
agrees that he will not at any time make any offer, sale,
transfer pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement
under the Securities Act of 1933, as amended, and under any
applicable state securities laws or an opinion of counsel
acceptable to the Company to the effect that the proposed
transaction will be exempt from such registration. The Optionee
shall execute such instruments, representations, acknowledgements
and agreements as the Company may, in its sole discretion, deem
advisable to avoid any violation of federal, state, local, or
securities exchange rule, regulation or law.
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(b) The certificates for Common Stock to be issued to the Optionee
hereunder shall bear the following legend:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or under applicable state securities
laws. The shares have been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended
shares under the Securities Act of 1933, as amended, and under any applicable
state laws or upon receipt of an opinion of counsel acceptable to the Company
that said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
10. ARBITRATION. Any dispute or disagreement between you and the
Company with respect to any portion of this option or its validity,
construction, meaning, performance or your rights hereunder shall be settled by
arbitration you will attempt to resolve any disputes or disagreements with the
Company over this option amicably and informally, in good faith, for a period
not to exceed two weeks. Thereafter, the dispute or disagreement will be
submitted to arbitration. At any time prior to a decision from the arbitrator(s)
being rendered, you and the Company may resolve the dispute by settlement. You
and the Company shall share equally the costs charged by the American
Arbitration Association or its successor, but you and the Company shall
otherwise be solely responsible for your own respective counsel fees and
expenses. The decision of the arbitrator(s) shall be made in writing, setting
forth the award, the reasons for the decision and award and shall be binding and
conclusive on you and the Company. Further, neither you nor the Company shall
appeal any such award. Judgment of a court of competent jurisdiction may be
entered upon the award and may be enforced as such pursuant to the provisions of
the award.
11. MISCELLANEOUS.
This option shall not be an "incentive stock option" as that term is
used in Section 422 of the Code and the regulations thereunder.
This option shall be subject to the terms set forth herein and in any
resolution approving the grant, which resolution is hereby incorporated herein
by referenced and made a part hereof.
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This option constitutes the entire understanding between the Company
and you with respect to the subject matter hereof and no amendment, modification
or waiver of this option, in whole or in part, shall be binding upon the Company
unless in writing and signed by the President of the Company.
In the event that one or more provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision
so invalidated shall be deemed to be separable from the other provisions hereof,
and the remaining provisions hereof, continue to be valid and fully enforceable.
This option and the performance of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of Nevada.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
U.S. Plastic Lumber Corporation
By:___________________________
Xxxxx X. Xxxxxxx
Vice President and General Counsel
I hereby acknowledge receipt of a copy of the foregoing stock option and, having
read it hereby signify my understanding of, and my agreement with, its terms and
conditions.
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