ALTERNATIVE ENERGY SOURCES, INC. Non-Qualified Stock Option Agreement
Exhibit
10.3
ALTERNATIVE
ENERGY SOURCES, INC.
January
5, 2007
Dear
Xxxx:
I
am
pleased to inform you that Alternative Energy Sources, Inc. (the “Company”) has
granted you a non-qualified stock option to purchase shares of the Company’s
Common Stock, par value $0.0001 per share (the “Common Stock”), on the terms and
conditions set forth below.
The
grant
of this stock option is made pursuant to the Alternative Energy Sources, Inc.
Equity Incentive Plan (the “Plan”). This stock option is not intended to qualify
as an "incentive stock option" under Section 422 of the Internal Revenue Code
of
1986, as amended. The terms of the Plan are incorporated into this letter and
in
the case of any conflict between the Plan and this letter, the terms of the
Plan
shall control.
Now,
therefore, in consideration of the foregoing and the mutual covenants
hereinafter set forth:
1. Stock
Option.
The
Company hereby grants you a non-qualified stock option (the “Stock Option”) to
purchase from the Company 75,000
shares
of
Common Stock at a price of $1.15
per
share. The Date of Grant is January
5, 2007.
Unless
earlier exercised or terminated in accordance with the terms hereunder and
in
the Plan, this Stock Option will expire on the date that is the tenth
(10th)
anniversary of the Date of Grant.
2. Entitlement
to Exercise the Stock Option.
The
grant of the Stock Option is subject to the following terms and
conditions:
(a) The
Stock
Option shall be exercisable in accordance with the following
schedule:
| · |
33.33%
on January 5, 2008, or 25,000
shares
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66.66%
on January 5, 2009, or 50,000
shares
|
| · |
100.0%
on January 5, 2010, or 75,000
shares
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The
Stock
Option shall cease to vest as of the date of the termination, for any reason,
of
your
employment or other relationship underlying the issuance of this Stock Option.
(b) If
you
die when any portion of the Stock Option is exercisable, then the person to
whom
your rights under the Stock Option shall have passed by will or by the laws
of
descent and distribution may exercise any of the exercisable portion of the
Stock Option within one (1) year after your death, provided
that no Stock Option may be exercised in any event more than ten (10) years
after the Date of Grant.
4. Method
of Exercise & Payment.
You may
exercise the vested portion of the Stock Option in whole or in part, by giving
written notice to the Company. The written notice shall clearly state your
intent to elect to exercise the Stock Option and the number of shares of Common
Stock with respect to which the Stock Option is being exercised. Further, the
written notice shall be signed by you (or, in the case of your death, the person
exercising the Stock Option) and shall be delivered to the Corporate Secretary
of the Company at the Company’s principal executive office. Except as otherwise
provided in the Plan, payment of the exercise price for the number of shares
of
Stock being purchased pursuant to any Option shall be made (i) by cash or
check payable to the order of the Company; (ii) by
delivery or attestation of shares of Common Stock (valued at their Fair Market
Value) in satisfaction of all or any part of the exercise price; (iii) by
delivery of a properly executed exercise notice with irrevocable instructions
to
a broker to deliver to the Company the amount necessary to pay the exercise
price from the sale or proceeds of a loan from the broker with respect to the
sale of Company Stock or a broker loan secured by the Company Stock;
(iv) by such other consideration as may be approved by the Committee from
time to time to the extent permitted by applicable law; or (v) by any
combination of (i) through (iv) hereof.
5. Tax
Withholding.
As a
condition of exercise, you agree that at the time of exercise that you will
pay
to the Company any applicable withholding taxes, if any, that the Company is
required to withhold in connection with the exercise of the Stock Option. To
satisfy the applicable withholding taxes, you may elect to (a) make cash
payment or authorize additional withholding from your cash compensation;
(b) deliver freely tradable shares of Common Stock (which will be valued at
their Fair Market Value as of the date of delivery); or (c) request that
the Company retain that number of shares of Common Stock that would satisfy
all
or a portion of the applicable withholding taxes.
6. Transferability
of Stock Option.
Other
than upon your death by will or by the laws of descent and distribution, the
Stock Option is not transferable by you and may be exercised during your
lifetime only by you.
7. Termination
of Stock Option.
In the
event that your employment or other relationship underlying the issuance of
this
Stock Option is terminated for Cause (as defined in the Plan), your vested
and
non-vested Stock Option rights shall be forfeited and terminated immediately
and
may not thereafter be exercised to any extent.
In
the
event that your employment or other relationship underlying the issuance of
this
Stock Option is terminated by you or the Company for any reason other than
Cause
or your death, you shall have the right to exercise the portion of the Stock
Option that has vested as of the date of such termination at any time during
the
three (3) month period following the date of such termination, and not
thereafter, provided that no Stock Option may be exercised in any event more
than ten (10) years after the Date of Grant.
8. Adjustments.
If the
number of outstanding shares of Common Stock is increased or decreased as a
result of one or more stock splits, reverse stock splits, stock dividends,
recapitalizations, mergers, share exchange acquisitions, combinations or
reclassifications, the number of shares with respect to which you have an
unexercised Stock Option and the Stock Option price shall be appropriately
adjusted as provided in the Plan.
9. Delivery
of Certificate.
The
Company may delay delivery of the certificate for shares of Common Stock
purchased pursuant to the exercise of an Stock Option until (i) it receives
any required representation by you or completion of any registration or other
qualification of such shares under any state or federal law regulation that
the
Company’s counsel shall determine as necessary or advisable, or (ii) it
receives advice of counsel that all applicable legal requirements have been
complied with. As a condition of exercising the Stock Option, you may be
required to execute a customary written indication of your investment intent
and
such other agreements the Company deems necessary or appropriate to comply
with
applicable securities laws.
10. No
Guaranteed Right of Employment.
If you
are employed by the Company, nothing contained herein shall confer upon you
any
right to be continued in the employment of the Company or interfere in any
way
with the right of the Company to terminate your employment at any time for
any
cause.
11. Notice
of Certain Dispositions.
You
agree to notify the Company in writing immediately after you make a disposition
of any shares acquired upon exercise of this Stock Option if you are required
to
report information related to your ownership of Common Stock pursuant to any
applicable securities laws,
or if such disposition occurs before the later of (a) the date that is two
years
after the Date of Grant, or (b) the date that is one year after the date that
you acquired such shares upon exercise of this Stock Option.
12. Notices.
Notices
hereunder shall be mailed or delivered to the Company at its principal place
of
business, and shall be delivered to you in person or mailed or delivered to
you
at the address set forth below, or in either case at such other address as
one
party may subsequently furnish to the other party in writing.
13. Choice
of Law.
This
Agreement shall be governed by Delaware law, without giving effect to the
conflicts or choice of laws principles thereof.
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Alternative
Energy Sources, Inc.
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| By: | /s/ Xxxx X. Xxxxxx | |
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Name: Xxxx X. Xxxxxx |
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Title: President
& CEO
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ACKNOWLEDGEMENT
BY OPTIONEE
The
foregoing Stock Option is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned as of the Date of Grant specified
above.
| /s/ Xxxxxxx X. Xxxxxx | ||
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Optionee's
Signature
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Xxxxxxx
X. Xxxxxx
Printed Name |
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