Exhibit 4.8
ENVIRONMENTAL POWER CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement is entered into between Environmental Power
Corporation (the "Company") and Xxxxxx X. Xxxxxxxx ("Optionee").
I. NOTICE OF STOCK OPTION GRANT
Pursuant to a July 20, 2001 resolution of the Board of Directors of the Company,
the undersigned Optionee has been granted an Option to purchase Common Stock of
the Company, subject to the terms and conditions of this Option Agreement, as
follows:
Grant Number
_____________________________________________
Date of Grant 9/14/01
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Vesting Commencement Date 9/14/01
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Exercise Price per Share $0.72
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Total Number of Shares Underlying
Grant 350,000
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Total Exercise Price $252,000
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Type of Option: ________ Incentive Stock Option
X Nonqualified Stock Option
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Term/Expiration Date: 9/14/06
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Vesting:
This Option shall be exercisable, in whole or in part, immediately upon the
grant of the Option as of September 14, 2001.
Termination Period:
Upon Optionee's death or disability, this Option may be exercised for one (1)
year after Optionee's death or disability, respectively.
II. AGREEMENT
1. Grant of Option. The Company hereby grants to the Optionee an Option
to purchase the number of Shares set forth in the Notice of Grant, at the
Exercise Price per Share set forth in the Notice of Grant. This Option shall be
treated as a Nonqualified Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable
during its term in accordance with the Vesting Schedule set out in the Notice of
Grant and with the applicable provisions of this Option Agreement.
(b) Method of Exercise and Payment. This Option shall be
exercisable by delivery of an Exercise Notice in the form attached as Exhibit A
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all exercised
Shares. Optionee may pay the Exercise Price by cash or check (bank check,
certified check, or personal check) or, with the approval of the Company, by
delivering to the Company the full Exercise Price in a combination of cash, not
less than the par value of one share of Common Stock multiplied by the number of
shares of Common Stock with respect to which the Option is being exercised, and
a full recourse promissory note with a term not to exceed five (5) years, which
promissory note shall provide for interest on the unpaid balance thereof which
at all times is not less than the minimum rate required to avoid the imputation
of income, original issue discount or a below-market rate loan pursuant to
Sections 483, 1274 or 7872 of the Internal Revenue Code of 1986, as amended.
This Option shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by the aggregate Exercise Price.
In addition, as an alternative to payment of the Exercise Price
in accordance with the preceding paragraph, the Optionee may elect to effect a
cashless exercise by so indicating on the exercise notice and including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, the Optionee shall surrender this Option for that
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock for which this Option is being exercised by the difference
between the "Closing Price", as herein defined minus the exercise price in
effect at such time, divided by the Closing Price. The "Closing Price" for each
day shall be
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the last reported sale price regular way or, in case no sale takes place on such
day, the average of the closing bid and asked prices regular way on such day, in
either case as reported on the primary exchange, automated quotation system or
reporting system on which the Common Stock is listed or trades or is reported,
or if no prices shall be so reported, the average of the bid and asked prices
for such day as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for such purpose, or if no such bid and asked
prices can be obtained from any such firm, the fair market value of one share of
the Common Stock on such day as determined in good faith by the Board of
Directors of the Company.
No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise complies with applicable federal, state
and local securities laws. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the
Option is exercised with respect to such Shares.
3. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
4. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Option.
5. Optionee's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
B.
6. Lock-Up Period. Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
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7. Tax Consequences. Set forth below is a brief summary as of the date
of this Agreement of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of NSO. There may be a regular federal income tax
liability, at ordinary income tax rates, upon the exercise of the Option. If
Optionee is an employee or a former employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(b) Disposition of Shares. The disposition of Shares is
generally a taxable event. The tax treatment will depend on the length of time
for which the Shares have been held by Optionee.
8. Entire Agreement; Governing Law. This Option Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes in its entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by the laws of
the State of New Hampshire.
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Optionee has reviewed this Option Agreement in its entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option and
fully understands all provisions of the Option. Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Company
upon any questions arising under this Option. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.
OPTIONEE ENVIRONMENTAL POWER
CORPORATION
By:
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Signature Name:
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Print Name Title:
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Residence Address
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EXHIBIT A
EXERCISE NOTICE
ENVIRONMENTAL POWER CORPORATION
000 Xxxxxx Xxxxxx, Xxxxx 0-X
Xxxxxxxxxx, XX 00000
Attention: __________________
1. Exercise of Option. Effective as of today, ___________, 20__, the
undersigned Optionee hereby elects to exercise Optionee's option to purchase
________ Shares of the Common Stock of ENVIRONMENTAL POWER CORPORATION (the
"Company") under and pursuant to the Stock Option Agreement dated September 14,
2001 (the "Option Agreement").
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement.
3. Representations of Optionee. Optionee acknowledges that Optionee
has received, read and understood the Option Agreement and agrees to abide by
and be bound by its terms and conditions.
4. Rights as Shareholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance.
5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED
FOR SALE OR OTHERWISE TRANSFERRED,
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PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION
OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
AND ANY STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST
REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH
IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
7. Successors and Assigns. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.
8. Governing Law; Severability. This Exercise Notice is governed by
the laws of the State of New Hampshire.
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9. Entire Agreement. The Option Agreement is incorporated herein by
reference. This Exercise Notice, the Option Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.
Submitted by: Accepted by:
OPTIONEE ENVIRONMENTAL POWER
CORPORATION
______________________________ By:_____________________________________
Signature Name: __________________________________
Xxxxxx X. Xxxxxxxx Title:__________________________________
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Print Name
Address: Address:
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______________________________ 000 Xxxxxx Xxxxxx, Xxxxx 0-X
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______________________________ Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
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________________________________________
Date Received
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE: Xxxxxx X. Xxxxxxxx
COMPANY: Environmental Power Corporation
SECURITY:
AMOUNT:
DATE:
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. Optionee is acquiring
these Securities for investment for Optionee's own account only and not with a
view to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
(b) Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.
(c) Optionee is familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly
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or indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 144 requires the resale to occur not
less than one year after the later of the date the Securities were sold by the
Company or the date the Securities were sold by an affiliate of the Company,
within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the following conditions:
(1) the resale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended); and, in the case
of an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three-month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.
(d) Optionee further understands that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
_______________________________________
Date: __________________________
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