EXHIBIT 10.3
NONINCENTIVE STOCK OPTION AGREEMENT
THIS NONINCENTIVE STOCK OPTION AGREEMENT ("Agreement") is entered into as
of June 29, 2005, by and between CompuPrint, Inc., a North Carolina corporation
(the "Company"), and Xxxxxx Xxxxxxx (the "Optionee").
R E C I T A L S
Whereas, Optionee is a valuable employee of the Company, and the Company
considers it desirable and in its best interest that the terms of options to
purchase shares of the Company's common stock (the "Common Stock");
A G R E E M E N T
It is hereby agreed as follows:
1. GRANT OF OPTION. Optionee has been granted the right, privilege, and
option to purchase up to 500,000 shares of Common Stock at the exercise price of
$1.00 per share (the "Options"), in the manner and subject to the conditions
hereinafter provided. The time the Options shall be deemed granted, sometimes
referred to herein as the "date of grant," shall be the date of execution of
this Agreement. These Options will vest, subject to continued employment of
Optionee by the Company, as follows: three-quarters of the Options shall vest on
the first anniversary date of this Agreement; an additional one-eight of the
Options shall vest on the second anniversary date of this Agreement; and the
remaining one-eight of the Options shall vest on the third anniversary date of
this Agreement. These Options are cumulative and are subject to anti-dilution
rights.
2. SERVICES TO THE COMPANY. The exercisability of the Options are subject
to certain conditions of service of the Optionee to the Company. In the event
the Optionee's employment with the Company is terminated, at any time, for
whatever reason: (i) all Options which have not vested, as of the date of
termination of employment of Optionee, in accordance with the vesting schedule
set forth herein shall be immediately forfeited upon such termination, and, (ii)
all vested but unexercised Options and rights to such Options shall be
exercisable for a period of one year from such termination date (but in no event
later than five years from the date of this Agreement) and shall be forfeited on
the one year anniversary date of termination of employment. Nothing contained in
this Agreement shall obligate the Company to employ or have another relationship
with the Optionee.
3. OPTION PERIOD. Provided such Options have vested in accordance with the
award schedule set forth in Section 2 above, Options shall be exercisable at any
time during the period commencing with the date of this Agreement and expiring
on the date five (5) years from the date of this Agreement, unless earlier
terminated pursuant to Section 2 or Section 14 of this Agreement, or if said day
is a day on which banking institutions are authorized by law to close, then on
the next succeeding day which shall not be such a day, by presentation and
surrender hereof to the Company or at the office of its stock transfer agent, if
any, together with all Federal and state taxes applicable upon such exercise, if
any.
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4. AMOUNT OF PURCHASE PRICE. The purchase price per Share for each share
which the Optionee is entitled to purchase under the Options shall be $1.00 per
Share.
5. METHOD OF EXERCISE. The Options shall be exercisable by the Optionee by
giving written notice to the Company of the election to purchase and of the
number of Shares the Optionee elects to purchase, such notice to be accompanied
by such other executed instruments or documents as may be required by the Board
of Directors pursuant to this Agreement, and unless otherwise directed by the
Board of Directors, the Optionee shall at the time of such exercise tender the
purchase price of the Shares he has elected to purchase. The Optionee may
purchase less than the total number of Shares for which the Option is
exercisable, provided that a partial exercise of an Option may not be for less
than One Hundred (100) Shares. If the Optionee shall not purchase all of the
Shares which he is entitled to purchase under the Options, his right to purchase
the remaining unpurchased Shares shall continue until expiration of the Options.
The Options shall be exercisable with respect of whole Shares only, and
fractional Share interests shall be disregarded.
6. PAYMENT OF PURCHASE PRICE. At the time of the Optionee's notice of
exercise of the Options, the Optionee shall tender in cash or by certified or
bank cashier's check payable to the Company, the purchase price for all Shares
then being purchased. If authorized by the Company's Board of Director,
alternative means of payment may be permitted, to the extent such means are
permissible under federal securities laws.
7. ISSUANCE OF STOCK CERTIFICATES. Upon receipt of the materials delivered
by the Optionee indicating exercise of the Options, the Company shall, as
promptly as practicable and in any event within five (5) business days
thereafter, execute and deliver, or cause to be executed and delivered, to the
Optionee a certificate or certificates representing the aggregate number of
Shares specified in such notice or form together with cash in lieu of any
fractional share as hereinafter provided. The certificate or certificates so
delivered shall be in such denomination or denominations as may be specified in
such notice or form and shall be registered in the name of the Optionee or such
other name as shall be designated (together with an address) in such notice or
form. Such certificate(s) shall be deemed to have been issued and the Optionee
or any other person so designated to be named therein shall be deemed to have
become a holder of record of such Shares as of the exercise date. The Company
shall pay all expenses and other charges payable in connection with the
preparation, issuance and delivery of share certificates under this Section
except that, in the case such share certificates shall be registered in a name
or names other than the name of the Optionee, funds sufficient to pay all share
transfer taxes which shall be payable upon issuance of such share certificate or
certificates shall be paid by the Optionee at the time the notice of exercise
hereinabove is delivered to the Company.
8. SHARES FULLY PAID. All Shares shall be, when issued, duly authorized,
validly issued and non-assessable.
9. NO IMPAIRMENT. The Company will not, by amendment of its charter or
though reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of the Options, but will
at all times in good faith assist in the carrying out of all such terms and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Optionee of the Options against impairment.
Notwitstanding the foregoing, in the event of a "change of control", the Options
shall vest immediately in their entirety.
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For purpurposes hereof, a "change of control" shall be deemed to
occur if and when:
(i) any person, including a "person" as such term is used in Section
14(d)(2) of the 1934 Act (a "Person"), is or becomes a beneficial owner
(as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25 percent (25%) or
more of the combined voting power of the Company's then outstanding
securities;
(ii) any plan or proposal for the dissolution or liquidation of the
Company is adopted by the stockholders of the Company;
(iii) individuals who, as of the effective date of this Agreement,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the effective date of this
Agreement whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
(iv) all or substantially all of the assets of the Company are sold,
transferred or distributed; or
(v) there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company (a "Transaction"), in each
case, with respect to which the stockholders of the Company immediately
prior to such Transaction do not, immediately after the Transaction, own
more than 50 percent (50%) of the combined voting power of the Company or
other corporation resulting from such Transaction in substantially the
same respective proportions as such stockholders' ownership of the voting
power of the Company immediately before such Transaction.
10. RESERVATION OF SHARES. The Company hereby agrees that, during the time
period the Options are exercisable, there shall be reserved for issuance and/or
delivery upon exercise of the Options such number of shares of its common stock
as shall be required for issuance or delivery upon exercise of the Options.
11. FRACTIONAL SHARES. With respect to any fraction of a Share called for
upon any exercise hereof, the Optionee agrees to waive the Optionee's right to
such fractional Shares. As such, no fractional Shares or scrip representing
fractional Shares shall be issued upon the exercise of the Options.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein, the term
"Adjustment Event" means an event pursuant to which the outstanding shares of
the Company are increased, decreased or changed into, or exchanged for a
different number or kind of shares or securities, without receipt of
consideration by the Company, through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split, stock dividend, stock
consolidation or otherwise. The term "Adjustment Event" shall also mean to
include: (i) any issuance by the Company of the Company's securities (excluding
securities issued to the Company's employees, directors, consultants and others
similarly situtated) below fair market value for such securities as determined
at the time of issuance; and
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(ii) any issuance at a price below the purchase price per Share for the common
stock underlying the Options, as adjusted. Upon the occurrence of an Adjustment
Event, (i) appropriate and proportionate adjustments shall be made to the number
and kind and exercise price for the shares subject to the Options, and (ii)
appropriate amendments to this Agreement shall be executed by the Company and
the Optionee if the Board of Directors in good faith determines that such an
amendment is necessary or desirable to reflect such adjustments. If determined
by the Board of Directors to be appropriate, in the event of an Adjustment Event
which involves the substitution of securities of a corporation other than the
Company, the Board of Directors shall make arrangements for the assumptions by
such other corporation of the Options. Notwithstanding the foregoing, any such
adjustment to the Options shall be made without change in the total exercise
price applicable to the unexercised portion of the Options, but with an
appropriate adjustment to the number of shares, kind of shares and exercise
price for each share subject to the Options. The good faith determination by the
Board of Directors as to what adjustments, amendments or arrangements shall be
made pursuant to this Section, and the extent thereof, shall be final and
conclusive, provided that the Options herein are adjusted in a manner that is no
less favorable than the manner of adjustment used as to any other options issued
by the Company to its employees, directors, consultants or in any transaction.
No fractional Shares shall be issued on account of any such adjustment or
arrangement.
13. RIGHTS OF THE OPTIONEE. The Optionee shall not be entitled to the
privileges of stock ownership as to any Shares not actually issued and delivered
to the Optionee. No Shares shall be purchased upon the exercise of any Options
unless and until, in the opinion of the Company's counsel, any then applicable
requirements of any laws, or governmental or regulatory agencies having
jurisdiction, and of any exchanges upon which the stock of the Company may be
listed shall have been fully complied with.
14. EFFECT OF DEATH OF THE OPTIONEE. If the Optionee dies, all Options
shall expire six (6) months thereafter. During such six (6) month period (or
such shorter period prior to the expiration of the Option by its own terms),
such Options may be exercised by the executor or administrator or the person or
persons to whom the Option is transferred by will or the applicable laws of
descent and distribution, as the case may be, but only to the extent such
Options were exercisable on the date the Optionee died.
15. NONTRANSFERABILITY OF OPTIONS. The Options shall not be transferable,
either voluntarily or by operation of law, otherwise than by will or the laws of
descent and distribution and shall be exercisable during the Optionee's lifetime
only by the Optionee.
16. SECURITIES LAWS COMPLIANCE. The Company will diligently endeavor to
comply with all applicable securities laws before any stock is issued pursuant
to the Options. Without limiting the generality of the foregoing, the Company
may require from the Optionee such investment representation or such agreement,
if any, as counsel for the Company may consider necessary in order to comply
with the Securities Act of 1933 as then in effect, and may require that the
Optionee agree that any sale of the Shares will be made only in such manner as
is permitted by the Board of Directors. The Optionee shall take any action
reasonably requested by the Company in connection with registration or
qualification of the Shares under federal or state securities laws.
17. SECURITIES SUBJECT TO LEGEND. If deemed necessary by the Company's
counsel, all certificates issued to represent the Options and/or the Shares
purchased upon exercise of the Options shall bear such appropriate legend
conditions as counsel for the Company shall require in substantially the
following form:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY BE
TRANSFERRED ONLY (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT, OR (B) IN ACCORDANCE WITH THE ACT AND SUBJECT TO RECEIPT OF AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER THAT THE PROPOSED
TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT."
18. REPRESENTATIONS OF OPTIONEE.
(a) SOPHISTICATION OF OPTIONEE. The Optionee acquired the Options
for investment and not with a view to the sale or distribution thereof, and the
Optionee has no commitment or present intention to liquidate the Company or to
sell or otherwise dispose of the Options or the underlying Shares. The Optionee
represents and warrants that, by reason of financial, tax and business
sophistication, income, net assets, education, background and business acumen,
the Optionee has the experience and knowledge in business and financial matters
to evaluate the risks and merits attendant to an investment decision in the
Company, either singly or through the aid and assistance of a competent
professional, and is fully capable of bearing the economic risk of loss of the
total investment pursuant to this Agreement. The Optionee represents and
warrants to the Company that the Optionee has been an employee of the Company
and is fully familiar with its business and oeprations and has been provided
with, and has had access to, all material information about the Company.
(b) LOCK-UP RESTRICTIONS. The Optionee hereby agrees to any lockup
of the Shares which the Board of Directors of the Company requests when
requested by an investment banker or underwriter providing financing to the
Company.
19. MISCELLANEOUS.
(a) Binding Effect. This Agreement shall bind and inure to the
benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.
(b) Further Acts. Each party agrees to perform any further acts and
execute and deliver any documents which may be necessary to carry out the
provisions of this Agreement.
(c) Amendment. This Agreement may be amended at any time by the
written agreement of the Company and the Optionee.
(d) Syntax. Throughout this Agreement, whenever the context so
requires, the singular shall include the plural, and the masculine gender shall
include the feminine and neuter genders. The headings and captions of the
various Sections hereof are for convenience only and they shall not limit,
expand or otherwise affect the construction or interpretation of this Agreement.
(e) Choice of Law. The parties hereby agree that this Agreement has
been executed and delivered in the State of New York and shall be construed,
enforced and governed by the laws thereof. This Agreement is in all respects
intended by each party hereto to be deemed and construed to have been jointly
prepared by the parties and the parties hereby expressly agree that any
uncertainty or ambiguity existing herein shall not be interpreted against either
of them.
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(f) Severability. In the event that any provision of this agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this agreement.
(g) Notices. All notices and demands between the parties hereto
shall be in writing and shall be served either by registered or certified mail,
and such notices or demands shall be deemed given and made forty-eight (48)
hours after the deposit thereof in the United States mail, postage prepaid,
addressed to the party to whom such notice or demand is to be given or made, and
the issuance of the registered receipt therefor. If served by telegraph, such
notice or demand shall be deemed given and made at the time the telegraph agency
shall confirm to the sender, delivery thereof to the addressee. All notices and
demands to the Optionee or the Company may be given to them at the following
addresses:
If to the Optionee: Xxxxxx Xxxxxxx
If to Corporation: CompuPrint, Inc.
c/o Law Offices of Xxx Xxxxxxx
Xxx Xxxx, XX 00000
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Such parties may designate in writing from time to time such
other place or places that such notices and demands may be given.
(h) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof,
this Agreement supersedes all prior and contemporaneous agreements and
understandings of the parties, and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as set forth or referred to herein. No supplement, modification or
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall constitute a waiver of any other provision hereof (whether
or not similar) nor shall such waiver constitute a continuing waiver.
(i) Attorneys' Fees. In the event that any party to this Agreement
institutes any action or proceeding, including, but not limited to, litigation
or arbitration, to preserve, to protect or to enforce any right or benefit
created by or granted under this Agreement, the prevailing party in each
respective such action or proceeding shall be entitled, in addition to any and
all other relief granted by a court or other tribunal body, as may be
appropriate, to an award in such action or proceeding of that sum of money which
represents the attorneys' fees reasonably incurred by the prevailing party
therein in filing or otherwise instituting and in prosecuting or otherwise
pursuing or defending such action or proceeding, and, additionally, the
attorneys' fees reasonably incurred by such prevailing party in negotiating any
and all matters underlying such action or proceeding and in preparation for
instituting or defending such action or proceeding.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first set forth above.
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxx (the "Optionee")
COMPUPRINT, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxx, Chief Executive Officer
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