Exhibit 10.2
STOCK OPTION AGREEMENT
AGREEMENT, made as of June 13, 2003, by and between INTERCOM SYSTEMS, INC.,
a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxx (the "Employee" or
"Holder").
WHEREAS, by written consent dated June 13, 2003 (the "Grant Date"), the
Board of Directors of the Company authorized the grant to Employee of an option
(the "Option") to purchase an aggregate of 400,000 shares of the authorized but
unissued common stock of the Company, $.0005 par value (the "Common Stock"),
conditioned upon Employee's acceptance thereof upon the terms and conditions set
forth in this Agreement; and
WHEREAS, Employee desires to acquire the Option on the terms and conditions
set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants Employee the Option to
purchase all or any part of an aggregate of 400,000 shares of Common Stock
(the "Option Shares") on the terms and conditions set forth herein.
2. Non-Incentive Stock Option. The Option represented hereby is not intended
to be an Option that qualifies as an "Incentive Stock Option" under Section
422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $.01 per share,
subject to adjustment as hereinafter provided.
4. Exercisability. This Option shall become exercisable on June 13, 2003,
subject to the terms and conditions of this Agreement, and shall remain
exercisable until the close of business on June 12, 2008 (the "Exercise
Period").
5. Termination Due to Death. Upon the death of the Employee, the portion of
the Option, if any, that was exercisable as of the date of death may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Employee under the will of the Employee, for a period of one
year from the date of such death or until the expiration of the Exercise
Period, whichever period is shorter. The portion of the Option, if any,
that was not exercisable as of the date of death shall immediately
terminate upon death.
6. Withholding Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Employee for Federal income
tax purposes with respect to the Option, the Employee shall pay to the
Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state and local taxes of any kind required by law
to be withheld or paid with respect to such amount. The obligations of the
Company pursuant to this Agreement shall be conditional upon such payment
or arrangements with the Company and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
of any kind otherwise due to the Employee from the Company.
7. Adjustments.
(a) In the event of a stock split, stock dividend, combination of shares,
or any other similar change in the Common Stock of the Company as a
whole, the Board of Directors of the Company shall make equitable,
proportionate adjustments in the number and kind of shares covered by
the Option and in the option price hereunder.
(b) In the event of any reclassification or reorganization of the
outstanding shares of Common Stock other than a change covered by
subsection (a) hereof or that solely affects the par value
of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation
and that does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), the Holder shall have the right
thereafter (until the expiration of the right of exercise of this Option)
to receive upon the exercise hereof after such event, for the same
aggregate Exercise Price payable hereunder immediately prior to such
reclassification, reorganization, merger or consolidation, the amount and
kind of consideration receivable by a holder of the number of shares of
Common Stock of the Company obtainable upon exercise of this Option
immediately prior to such event. The provisions of this subsection (b)
shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.
8. Method of Exercise.
8.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in substantially the form attached hereto as
Exhibit A directed to the Company at its principal place of business
accompanied by full payment as hereinafter provided of the exercise
price for the number of Option Shares specified in the notice.
8.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment
therefor.
8.3 Payment of Purchase Price.
8.3.1Cash Payment. The Employee shall make cash payments by wire
transfer, certified or bank check or personal check, in each case
payable to the order of the Company. The Company shall not be
required to deliver certificates for Option Shares until the
Company has confirmed the receipt of good and available funds in
payment of the purchase price thereof.
8.3.2Cashless Payment. The Company, in its sole discretion, may allow
the Employee to use Common Stock of the Company owned by him or
her to pay the purchase price for the Option Shares by delivery
of stock certificates in negotiable form that are effective to
transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this
purpose shall be valued at the Fair Market Value of the Company's
Common Stock on the last trading day preceding the date of
exercise. "Fair Market Value", unless otherwise required by any
applicable provision of the Internal Revenue Code of 1986, as
amended, and any successor thereto and the regulations
thereunder, means, as of any given date: (i) if the Common Stock
is listed on a national securities exchange or quoted on the
Nasdaq National Market or Nasdaq SmallCap Market, the last sale
price of the Common Stock in the principal trading market for the
Common Stock on such date, as reported by the exchange or Nasdaq,
as the case may be; (ii) if the Common Stock is not listed on a
national securities exchange or quoted on the Nasdaq National
Market or Nasdaq SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common
Stock on such date, as reported by the OTC Bulletin Board or the
National Quotation Bureau, Incorporated or similar publisher of
such quotations; and (iii) if the fair market value of the Common
Stock cannot be determined pursuant to clause (i) or (ii) above,
such price as the Board of Directors shall determine, in good
faith.
8.3.3Payment of Withholding Tax. Any required withholding tax may be
paid in cash or with Common Stock in accordance with Sections
8.3.1. and 8.3.2.
8.3.4Exchange Act Compliance. Notwithstanding the foregoing, the
Company shall have the right to reject payment in the form of
Common Stock if in the opinion of counsel for the Company, (i) it
could result in an event of "recapture" under Section 16(b) of
the Securities Exchange Act of 1934; (ii) such shares of Common
Stock may not be sold or transferred to the Company; or (iii)
such transfer could create legal difficulties for the Company.
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9. Nonassignability. The Option shall not be assignable or transferable except
by will or by the laws of descent and distribution in the event of the
death of the Employee. No transfer of the Option by the Employee by will or
by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice
thereof and a copy of the will and such other evidence as the Company may
deem necessary to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and warrants to the
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to the
Employee in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and warrants to
the Company that:
(i) he or she is acquiring the Option and shall acquire the Option Shares
for his or her own account and not with a view towards the
distribution thereof;
(ii) he or she has received a copy of all reports and documents required to
be filed by the Company with the Securities and Exchange Commission
pursuant to the Exchange Act within the last 24 months and all reports
issued by the Company to its stockholders;
(iii)he or she understands that he or she must bear the economic risk of
the investment in the Option Shares, which cannot be sold by him or
her unless they are registered under the Securities Act of 1933 (the
"Securities Act") or an exemption therefrom is available thereunder
and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
(iv) in his or her position with the Company, he or she has had both the
opportunity to ask questions and receive answers from the officers and
directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses
or may possess such infor mation or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(v) he or she is aware that the Company shall place stop transfer orders
with its transfer agent against the transfer of the Option Shares in
the absence of registration under the 1933 Act or an exemption
therefrom as provided herein; and
(vi) The certificates evidencing the Option Shares shall bear the following
legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933.
The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
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12. Restriction on Transfer of Option Shares.
(a) Anything in this Agreement to the contrary notwithstanding, the
Employee hereby agrees that he or she shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him or her
without registration under the Securities Act, or in the event that
they are not so registered, unless (i) an exemption from the
Securities Act registration requirements is available thereunder, and
(ii) the Employee has furnished the Company with notice of such
proposed transfer and the Company's legal counsel, in its reasonable
opinion, shall deem such proposed transfer to be so exempt.
(b) Anything in this Agreement to the contrary notwithstanding, the
Employee hereby agrees that he or she shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him except
in accordance with the Company's policy, if any, regarding the
regarding the sale and disposition of securities owned by employees
and/or directors of the Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications that are required or permitted to be given under
this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private
courier, return receipt requested, postage prepaid to the Company at
its principal executive office and to the Employee at his address set
forth below, or to such other address as either party shall have
specified by notice in writing to the other. Notice shall be deemed
duly given hereunder when delivered or mailed as provided herein.
13.2 Stockholder Rights. The Employee shall not have any of the rights of a
stockholder with respect to the Option Shares until such shares have
been issued after the due exercise of the Option.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This
Agreement may not be amended except by writing executed by the
Employee and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto and as
provided above, their respective heirs, successors, assigns and
representatives, any rights, remedies, obligations or liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to
choice of law provisions); provided, however, that all matters
relating to or involving corporate law shall be governed by the
Delaware General Corporation Law.
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
INTERCOM SYSTEMS, INC. Address: Intercom Systems, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxx #0
Xxxxxxxx, Xxxxxxx 00000
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title:
EMPLOYEE: Address: c/o Donehew Capital LLC
000 Xxxxxxx Xxxxxxxx
Xxxxxxxx #0
Xxxxxxxx, Xxxxxxx 00000
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
-----------------------
DATE
Intercom Systems, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxx #0
Xxxxxxxx, Xxxxxxx 00000
Attention: Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of June 13, 2003
("Agreement") with Intercom Systems, Inc. (the "Company"), I hereby irrevocably
elect to exercise the right to purchase _____ shares of the Company's common
stock, par value $.0005 per share ("Common Stock"), which are being purchased
for investment and not for resale.
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of the Company in the sum of $ ; --------------------
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| With the consent of the Company, a certificate for ____ shares of the
Company's Common Stock, free and clear of any encumbrances, duly
endorsed, having a Fair Market Value (as such term is defined in my
Stock Option Agreement) of $_________.
I hereby represent, warrant to, and agree with, the Company that:
(i) I am acquiring the Option Shares for my own account, for investment,
and not with a view towards the distribution thereof;
(ii) I have received a copy of all reports and documents required to be
filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934 within the last 24 months and all reports issued
by the Company to its stockholders;
(iii)I understand that I must bear the economic risk of the investment in
the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "Securities Act") or
an exemption therefrom is available thereunder and that the Company is
under no obligation to register the Option Shares for sale under the
Securities Act;
(iv) I agree that I will not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by me hereby except in
accordance with Company's policy, if any, regarding the sale and
disposition of securities owned by employees and/or directors of the
Company;
(v) in my position with the Company, I have had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons acting on its behalf concerning
the terms and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (ii) above;
(vi) I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the Securities Act or an exemption
therefrom as provided herein; and
(vii)the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature) (Address)
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(Print Name) (Social Security Number)
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