Exhibit 4(ah)
NCT GROUP, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of January 25, 2002, between NCT Group,
Inc., a Delaware corporation (the "Company"), and Leben Care, Inc., a New Jersey
corporation ("Optionee").
The Company hereby grants to Optionee options to acquire Common Stock of
the Company upon the following terms and conditions:
1. Grant of Options. The Company grants to Optionee options (the "Options")
to purchase up to Eight Million Three Hundred Fifty Thousand (8,350,000) fully
paid and nonassessable shares of the Common Stock, par value $.01 per share, of
the Company (the "Shares"), to be issued upon the exercise of the Options, as
set forth below. Such Options are granted pursuant to agreements between the
Company and Optionee as follows:
o Options to acquire 600,000 Shares (the "First Set of Options") are granted,
as of the date hereof, pursuant to the January 20, 1999 Consulting
Agreement between the Company and Optionee, as amended (as so amended, the
"First Agreement");
o Options to acquire 300,000 Shares (the "Second Set of Options") are
granted, as of the date hereof, pursuant to the (undated) Amendment and
Extension of Consulting Agreement dated January 20, 1999 between the
Company and Optionee, as amended (as so amended, the "Second Agreement");
o Options to acquire 450,000 Shares (the "Third Set of Options") are granted,
as of the date hereof, pursuant to the February 1, 2001 Second Amendment
and Extension of Consulting Agreement dated January 20, 1999 between the
Company and Optionee, as amended (as so amended, the "Third Agreement");
o Options to acquire 500,000 Shares (the "Fourth Set of Options") are
granted, as of the date hereof, pursuant to the May 22, 2001 Third
Amendment and Extension of Consulting Agreement dated January 20, 1999
between the Company and Optionee (the "Fourth Agreement");
o Options to acquire 1,500,000 Shares (the "Fifth Set of Options") are
granted, effective as of January 8, 2002, pursuant to the January 8, 2002
Consulting Agreement between the Company and Optionee, as amended (as so
amended, the "Fifth Agreement"); and
o Options to acquire 5,000,000 Shares (the "Sixth Set of Options") are
granted, as of the date hereof, pursuant to the January 25, 2002 First
Amendment of Consulting Agreement dated January 8, 2002 between the Company
and Optionee (the "Sixth Agreement" and, collectively with the First
Agreement, the Second Agreement, the Third Agreement, the Fourth Agreement
and the Fifth Agreement, the "Agreements").
2. Exercise Prices. The respective exercise prices of the Options shall
be as follows:
o As to the First Set of Options: $.13 per Share;
o As to the Second Set of Options: $.13 per Share;
o As to the Third Set of Options: $.13 per Share;
o As to the Fourth Set of Options: $.13 per Share;
o As to the Fifth Set of Options: $.079 per Share; and
o As to the Sixth Set of Options: $.09 per Share.
The Company shall pay all original issue or transfer taxes on the exercise
of the Options.
3. Vesting of Options. The Options granted hereby shall vest immediately.
4. Expiration of Options. The Options shall expire and not be exercisable
after the following respective expiration dates:
o As to the First Set of Options: May 22, 2006;
o As to the Second Set of Options: May 22, 2006;
o As to the Third Set of Options: May 22, 2006;
o As to the Fourth Set of Options: May 22, 2006;
o As to the Fifth Set of Options: January 24, 2007; and
o As to the Sixth Set of Options: January 24, 2007.
5. Non-Assignability of Options. Except as set forth in Section 12
hereof, the Options shall not be given, granted, sold, exchanged,
transferred, pledged, assigned or otherwise encumbered or disposed of
by Optionee and shall be exercisable only by Optionee or its agent or
attorney-in-fact.
6. Method of Exercise of Options. Optionee shall notify the Company by
written notice sent by certified mail, return receipt requested,
addressed to the Company's principal office, or by hand delivery to
such office, as to the number of Shares which Optionee desires to
purchase under the options, which written notice shall be accompanied
by Optionee's check payable to the order of the Company for the full
option price of such Shares. As soon as practicable after the receipt
of such written notice, the Company shall, at its principal office,
tender to Optionee a certificate or certificates issued in Optionee's
name evidencing the Shares purchased by Optionee hereunder.
7. Shares of Common Stock as Investment. By accepting the Options,
Optionee agrees that any and all Shares purchased upon the exercise
thereof shall be acquired for investment and not for distribution, and
upon the issuance of any or all of the Shares subject to the Options,
Optionee shall deliver to the Company a representation in writing that
such Shares are being acquired in good faith for investment and not
with a view toward resale or distribution. The Company may place an
appropriate restrictive legend on the certificate or certificates
evidencing such Shares.
8. Adjustments upon Changes in Capitalization. In the event of changes in
the outstanding Common Stock of the Company by reason of stock
dividends, stock splits, recapitalizations, mergers, consolidations,
combinations, exchanges of shares, separations, reorganization or
liquidations, the number of Shares issuable upon the exercise of the
Options, the exercise price thereof and any limitation on exercise set
forth in Section 3 hereof shall be correspondingly adjusted by the
Company. Any such adjustment in the number of Shares shall apply
proportionately to only the then unexercised portion of the Options.
If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
9. No Rights as Stockholders. Optionee shall have no rights as a
stockholder in respect to the shares as to which the Options shall not
have been exercised and payment made as herein provided.
10. Board Approval. The Option grants described in Section 1 hereof have
been approved by the Board of Directors of the Company.
11. Notices. Notices, demands and other communications given under this
Stock Option Agreement shall be in writing and shall be deemed to have
been given when delivered (if personally delivered), on the scheduled
date of delivery (if delivered via commercial courier), three days
after mailed (if mailed by certified or registered mail, return
receipt requested) or when sent by facsimile (if sent by facsimile
with evidence of successful transmission retained by the sender);
provided, however, that failure to give proper and timely notice as
set forth in the "with a copy to" provisions below shall not
invalidate a notice properly and timely given to the associated party.
Unless another address or facsimile number is specified by notice
hereunder, all notices shall be sent as follows:
If to Optionee: with a copy to:
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Leben Care, Inc. Xxxxx Xxxxx, Esq.
000 Xxxxx 00 Xxxxx & Xxxxxxxxx
Xxxxxxxx, XX 00000 000 Xxxxx 00
Attention: Xxxxxx Xxxxxxx Xxxxxxxx, XX 00000
Facsimile: 000-000-0000 Facsimile: 973-361-1644
If to the Company: with a copy to:
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NCT Group, Inc. NCT Group, Inc.
00 Xxxxxxx Xxxxxx 00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attention: Chief Financial Officer Attention: General Counsel
Facsimile: 000-000-0000 Facsimile: 000-000-0000
12. Miscellaneous. This Stock Option Agreement may be amended, and any
provision of this Stock Option Agreement may be waived, only via a written
instrument executed by both parties hereto. No course of dealing between or
among any persons having any interest in this Stock Option Agreement will be
deemed effective to modify or amend any part of this Stock Option Agreement or
any rights or obligations of any person under or by reason of this Stock Option
Agreement. This Stock Option Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that (a) the Company may not assign
this Stock Option Agreement or any of the Company's rights, interests or
obligations hereunder except with the prior written consent of Optionee; and (b)
Optionee may not assign this Stock Option Agreement or any of Optionee's rights,
interests or obligations hereunder except (i) with the prior written consent of
the Company, or (ii) to an individual that controls Optionee (or a family member
thereof) or (iii) to an entity that controls, is controlled by or is under
common control with Optionee. Whenever possible, each provision of this Stock
Option Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Stock Option Agreement is
held to be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Stock Option Agreement. This Stock Option Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations by or between
the parties, written or oral, with respect to such subject matter. To the extent
of any inconsistency between the Agreements and this Stock Option Agreement,
this Stock Option Agreement shall prevail. This Stock Option Agreement may be
executed in one or more counterparts, any one of which need not contain the
signatures of more than one party, and all such counterparts taken together
shall constitute one and the same instrument. This Stock Option Agreement shall
be governed by the internal laws of the State of Delaware, without regard to
conflicts of laws principles. The parties hereto hereby submit to the exclusive
jurisdiction of the United States Federal Courts located in the state of New
Jersey with respect to any dispute arising under this Stock Option Agreement.
IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement
as of the day and year first above written.
NCT GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Chairman
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LEBEN CARE, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Vice President
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OPTION EXERCISE FORM
(To be executed by the Optionee in order to exercise the Option)
TO: NCT Group, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
The undersigned hereby irrevocably elects to exercise the within Option to
the extent of purchasing __________ shares of Common Stock, par value $.01 per
share, of NCT Group, Inc. (the "Shares") and hereby makes payment at the rate of
$___.____ per share, or an aggregate of $_________, in payment therefor.
The undersigned represents, warrants and certifies as follows:
(a) Optionee is acquiring the Shares in good faith for purposes of
investment and not with a view to the resale or distribution thereof.
(b) All offers and sales of the Shares shall be made pursuant to an
effective registration statement under the Securities Act of 1933, as
amended (the "1933 Act"), or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the 1933
Act.
Dated: ___________________, 20____
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(print name of Optionee)
By:
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Name:
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Title:
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