Date of Grant: December 31, 1997
ELECTROSOURCE, INC.
STOCK OPTION AGREEMENT
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE OACTO), OR
UNDER THE SECURITIES LAWS OF ANY STATE (OBLUE SKY
LAWSO), AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR DELIVERY TO THE COMPANY OF EVIDENCE
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT AN
EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE.
Corning Incorporated Xx. X00-000X
Xxxxxxx, Xxx Xxxx 00000 70,000 Shares
The undersigned, Electrosource, Inc. (the
"Company"), a Delaware corporation, for good and valuable
consideration desires to grant to Corning Incorporated
("Corning" or "Holder") an option to acquire shares of
Common Stock in the Company. The option covered hereby is
granted pursuant to the terms of the Research and
Development Umbrella Agreement ("Umbrella Agreement")
dated as of July 1, 1997 between the Company and
Corning, and all provisions of that Umbrella Agreement
are incorporated herein by reference. Defined terms shall
have the same meaning as in the Umbrella Agreement.
1. Option. The Company does hereby grant to
Corning the exclusive option to purchase from the Company
all or any part of an aggregate of Seventy Thousand
(70,000) shares ("shares") of Common Stock of the Company.
The exercise price shall be Seven and .125/100 Dollars
($7.125) per share for Seventy Thousand (70,000) shares.
2. Term. The Option shall be exercisable at any
time or times until the option expires or terminates in
accordance with the provisions hereof. This Option shall
in any event terminate no later than 5:00 o'clock P.M.,
San Marcos, Texas time three years after its date of
grant.
3. Exercise. To exercise this option or any part
thereof, Corning shall give written notice of such election
to the Company at its Corporate Headquarters, Attention
Corporate Secretary, so as to be received by the Company
within the period this option is exercisable, which notice
shall specify the number of shares to be purchased and be
accompanied by payment in full. Payment for such shares
may be by check or wire transfer. Exercise of the option
may be made in multiple parts, but in amounts of at least
One Hundred Thousand and No/100 Dollars ($100,000.00)
per exercise.
4. Share Issue. Upon receipt by the Company of
proper notice of exercise of this Option, the Company as
promptly as practicable and subject to the other
provisions in this Option, shall deliver a certificate or
certificates representing shares so purchased, and shall
pay all original issuance or transfer taxes on the
exercise of this Option, and all other fees and expenses
necessarily incurred by the Company in connection
therewith. Certificates evidencing such shares may have
endorsed thereon such language as may be deemed necessary or
advisable by counsel for the Company in order to ensure
compliance with the applicable securities laws or
regulations. Registration rights shall be as set forth in
the Umbrella Agreement.
5. Subdivision or Combination of Common Stock. If
the Company at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) its
outstanding shares of Common Stock into a greater number
of shares, the exercise price in effect immediately
prior to such subdivision will be proportionately reduced,
and if the Company at any time combines (by reverse stock
split or otherwise) its outstanding shares of Common Stock
into a smaller number of shares, the exercise price in
effect immediately prior to such combination will be
proportionately increased.
6. Reorganization, Reclassification, Consolidation,
Merger or Sale. Any reorganization, reclassification,
consolidation, merger or sale of all or substantially all
of the Company's assets to another entity which is
effected in such a way that holders of Common Stock are
entitled to receive (either directly or upon subsequent
liquidation), stock, securities or amounts with respect
to or in exchange for Common Stock is referred to herein
as an "Organic Change." Prior to the consummation of any
Organic Change, the Company will make appropriate provisions
(in form and substance satisfactory to the holder of the
outstanding principal amount of the Option then
outstanding) to insure that the holder of the Option will
thereafter (for so long as such holder has the right to
exercise the Option) have the right to receive, in lieu of
or in addition to the shares of Common Stock immediately
theretofore issuable upon the exercise of the Option, such
shares of stock, securities or assets as such holder would
have received in connection with such Organic Change if
such holder had exercised the Option immediately prior to
such Organic Change. In any such case, the Company will
make appropriate provisions (in form and substance
satisfactory to the holder of the Option) to insure that
the provisions of this part 6 will thereafter (for so long
as such holder has the right to exercise the Option) be
applicable to the Option.
IN WITNESS WHEREOF, the Parties have executed
this Agreement on the date first written above.
ELECTROSOURCE, INC. CORNING INCORPORATED
By: /s/XXXXX X. XXXXX By: /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxx
Vice President Finance Printed Name: Xxxxx X. Xxxxxx
and General Counsel
Its: Division Vice President and
Director
